California hospital relies on bankrupt district to make payroll

Sonoma West Medical Center reopened last year after a duo of bankruptcy filings, and the Sebastopol, Calif.-based hospital is off to a bumpy second start.

Sonoma West Medical Center, formerly known as Palm Drive Hospital, closed in April 2014 after its second bankruptcy filing. The hospital reopened last October but recently had to ask already bankrupt Palm Drive Health Care District for funds to help cover the hospital's payroll and other immediate expenses, according to a Sonoma West Times & News report.

The hospital district was able to assist SWMC with its expenses using tax revenue collected in December. However, the hospital must make payroll again Feb. 18.

Patient volume at SWMC has been steady since it reopened, but the hospital is not pulling in enough revenue to cover its more than $2 million in expenses each month.

Although the hospital has faced struggles, Ray Hino, CEO of SWMC, is optimistic about its future. Forecasting continuing business levels, Mr. Hino said the hospital will have $1.7 million in cash built up by May.

The hospital will also get a financial boost from Medicare. SWMC was reaccredited by CMS in early December, and Mr. Hino received a new billing number last week. Once a review by a Medicare payment clearing house is completed, the hospital will receive as much as $4.5 million in net accounts receivable, retroactive to Dec. 7, according to the report.

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