The Southern Humboldt Community Healthcare District has received a $1.8 million loan while awaiting state and federal reimbursements for operating expenses. (Times-Standard file)

The Southern Humboldt Community Healthcare District received a $1.8 million loan from the Headwaters Community Investment Fund, the Humboldt Area Foundation and the Redwood Region Economic Development Commission, money the district will use to cover operating expenses until state and federal reimbursements for Medi-Cal and Medicare expenditures are paid.

“It’s a state government program and basically the state government does not pay us even close to what our costs for services are,” said District CEO Matt Rees from Washington, D.C., where he is lobbying for more health care support. “The state government pays us 25 percent of the cost. So hospitals got together and came up with a program where we would give the state money and they would use that to draw down federal matching funding and give us our money back plus the state matching funds.”

Rees said he’s been working on the reimbursement issue for about a year.

“If we didn’t have programs like this, we would be in financial trouble,” Rees said, adding there were organizations in the county it could turn to for help. “This loan makes it so we don’t have to go somewhere else for the loan. We’re partners with several community groups and it means we don’t have to find another way to get the funds.”

The Humboldt Area Foundation put up the largest percentage of the loan at $1 million and for executive director Patrick Cleary, it’s a project that falls squarely within the Foundation’s mission.

“The Jerold Phelps Community Hospital is a health care oasis in the vast territory between Fortuna and Willits,” Cleary said today. “Small rural hospitals face many challenges in today’s medical world. If the hospital were unable to get reimbursed for its Medicare services, its long-term survival would be in jeopardy.”

The loan will be administered by Redwood Region Economic Development Commission, and it’s an important step in keeping health care services available in the southern part of the county. In 2002, Jerold Phelps Community Hospital was designated as a critical access hospital through the Centers for Medicare and Medicaid Services. The hospital and clinic serve a population of more than 10,000 residents in Southern Humboldt County, western Trinity County and northern Mendocino County.

“Health care is an important piece of our community’s infrastructure that supports both our people and our economy,” said Gregg Foster, executive director of RREDC said in a statement. “As such, we are pleased to provide support to organizations like the Jerold Phelps (Community) Hospital.”

Jerold Phelps Community Hospital is eligible to participate in a program that districts like SHCHD contribute money to state Medicaid programs and are then eligible for federal matching funds.

Rees said the district has contributed $1.8 million from its operating fund and will receive $3.6 million in reimbursements. It’s the time it takes for the reimbursement to come through — about four months — that meant the district would have been left without the needed working capital to keep the doors open.

The loan guarantees there will be no interruption of service.

“We were going to to do this last November but the government put it off for five months,” Rees said. “There is nothing to be scared or nervous about, there will be no impact to health care and services and this loan will help us maintain services in the future.”

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