Saturday, Aug. 23, 2008

Health clinics forced to borrow

State budget crisis ends Medi-Cal payments to two local centers

By CAROL REITER
creiter@mercedsun-star.com

Two area safety-net health clinics trying to deal with the state's budget crisis got a shot in the arm from a health plan and a local bank.

HealthNet of California has extended no-interest loans to both Golden Valley Health Centers and the Livingston Medical Group. Both clinics see low-income, uninsured, and Medi-Cal patients.

Because the state has no budget yet, Medi-Cal payments to providers have been cut off since July 1, when the budget crisis started. HealthNet is one of the largest health plans in the state.

"We are getting into the area of $1 to $2 million that the state owes us already," said Mike Sullivan, chief executive officer of Golden Valley.

Livingston Medical Group got an interest-free loan of $350,000, while Golden Valley was given a $600,000 loan, both from HealthNet.

"This loan means we haven't had to cut staff or shut down temporarily," said Aurora Garcia, chief executive officer of Livingston Medical Group. "We're still open and providing full service to our patients."

Golden Valley is also being helped by County Bank, Sullivan said. The bank has extended the clinics' line of credit from $1 million to $4 million, he said.

"We've had to do these things to prepare ourselves for a long fall without a budget," Sullivan said. "About 50 to 60 percent of our patients are Medi-Cal patients. It's a huge drain and a tremendous risk for us. We got help from our friends."

Reporter Carol Reiter can be reached at (209) 385-2486 or creiter@mercedsun-star.com.