MONTGOMERY, Ala. – Financially troubled Jackson Hospital has reached an agreement with Blue Cross and Blue Shield of Alabama in a long-running dispute over medical reimbursement rates, the hospital announced Friday.
The development is a hopeful sign that the Capital City’s downtown hospital can remain open after filing for bankruptcy more than a year ago.
“Our Board of Directors has announced a path forward for the hospital to remain open following a verbal agreement with Blue Cross and Blue Shield of Alabama,” Jackson Hospital posted on Facebook. “More details will be shared soon. Today is about our employees and their unwavering commitment to this community.”
The hospital currently operates under a $25 million debtor-in-possession loan from Jackson Investment Group, the parent company of Georgia-based Jackson Healthcare. The board of directors previously threatened that the hospital would cease operations if a deal with the state’s largest insurer to raise reimbursement rates wasn’t reached.
U.S. Bankruptcy Judge Christopher Hawkins last month denied the hospital’s request to mandate higher payments from Blue Cross, decrying how the hospital has blamed Blue Cross for its financial woes and calling the hospital’s issues “self-harm” and its impending closure “unequivocally avoidable.”
In a statement, Blue Cross said it is pleased the hospital will remain open to serve Montgomery and Central Alabama.
“Blue Cross has worked with hospital leadership and other stakeholders to keep their doors open and provide patients access to the care they need,” the insurer said in a statement.
“Throughout this process, our focus has remained on supporting our members and the community. We appreciate the efforts of all parties involved in reaching this outcome and look forward to continuing our partnership in support of the health and well-being of our customers, the River Region and Alabamians.”
The state of Alabama has pledged $40 million to help the hospital once it emerges from bankruptcy.