The legislation, to be voted on May 4, is California AB 412 and would provide loans as a bridge to eventual improved financial health for health systems in the state.
“It is categorized as a loan but also a forgivable loan,” Mr. Herbst said on a May 3 call with investors. “I fully expect it will pass tomorrow.”
In addition, there are several other pieces of legislation being negotiated in Sacramento, including one allowing distressed hospitals to forgo a strict deadline on meeting new seismic regulations.
Kaweah Health would likely have to pay $700 million to meet such changes, something it cannot afford to do presently, Mr. Herbst said. The legislation would allow for five-year extensions on meeting the requirements.
Kaweah Health launched a “Back in Black” recovery program in the summer of 2022 and posted a net income of almost $1 million in the third quarter of fiscal 2023 ending March 31.
