Montgomery’s Jackson Hospital has filed Chapter 11 bankruptcy protection as it tries to restructure its finances.
In a statement, it announced that Jackson Hospital & Clinic, Inc. and JHC Pharmacy, LLC, made the filing in the U.S. Bankruptcy Court for the Middle District of Alabama.
The statement says all Jackson Hospital & Clinic facilities remain open and operating as usual, and they are focused on the care and safety of their patients.
“This action will enable the Hospital to reorganize operations and implement a financial restructuring through a court-supervised proceeding while continuing to provide world-class patient care,” said Chief Restructuring Officer Allen Wilen.
“We have been serving the community for nearly 80 years and look forward to continuing to deliver excellence in personal healthcare far into the future. While we have taken important steps to strengthen leadership, enhance revenue, and better manage costs and liquidity, we are operating in what continues to be an extremely challenging environment. Bankruptcy is never an easy decision. However, it is the best path forward for the Hospital’s stakeholders as we focus resources on continuing to operate.”
Jackson says it has experienced significant financial pressures in recent years due to increased labor costs, stagnant reimbursement rates, a challenging payor mix and fallout from COVID-19, among other factors.
It says without Medicaid expansion in Alabama, it has suffered significant financial losses due to its care for uninsured people. In 2023 alone, the hospital says gross charges related to the care of uninsured patients exceeded $45 million.
Wilen said the Chapter 11 process gives the hospital the time and breathing room needed to explore strategic alternatives, resolve legacy debt, establish a single platform to settle claims and ensure the hospital’s future.
“For months leading up to this announcement, Jackson Hospital held meetings with various parties, including the bondholders and elected officials from Montgomery County and the City of Montgomery, to explore all strategic alternatives to return the Hospital to financial stability,” said Wilen.
