MONTGOMERY, Ala. – Jackson Hospital is again threatening to close its doors in less than a month if it can’t reach an agreement on medical reimbursement rates with the state’s largest insurer.
In an email to employees Wednesday, Jackson CEO John Quinlivan said the hospital’s board “determined that we will announce the hospital’s closure on June 25 unless [Blue Cross and Blue Shield of Alabama] agrees before that date to reimburse us at a fair rate comparable to what it pays Baptist South.”
The financially struggling hospital filed for bankruptcy earlier this year and continues to operate through a $25 million debtor-in-possession loan from Jackson Investment Group, the parent company of Georgia-based Jackson Healthcare. Gov. Kay Ivey and a state bonding board pledged to borrow up to $40 million to help save the hospital, but only after it emerges from bankruptcy.
Jackson’s closure would be a major blow to the Capital City, as it is the only hospital near the downtown area and the Capitol Complex.
Jackson officials and investors have repeatedly blamed the hospital’s woes on Blue Cross and Blue Shield of Alabama and even sued the insurer, arguing it doesn’t offer the same reimbursement rates as it does for other hospitals, including Montgomery’s Baptist South. Blue Cross officials have rejected those claims, pointing out that Baptist South is a different category of hospital that offers a much wider range of medical care.
“Blue Cross and Blue Shield of Alabama has been transparent and more than fair in our increased reimbursements and other support provided to Jackson Hospital, both before and during its bankruptcy,” said spokesperson Sophie Martin. “We have tried to work with Jackson Hospital to help find a reasonable solution to its financial challenges, but we are less than 20% of its revenues.
“Unfortunately, what Jackson Hospital seeks is neither affordable nor fair to our customers. Our members must be our priority, as we are committed to managing healthcare costs and maintaining access to high-quality care.”
The dispute between Jackson Hospital and Blue Cross has crossed over from the legal world into the political one. Last year, a Delaware-incorporated anonymous group called Alabama Patients First started airing political-style television ads attacking Blue Cross, to which the insurer responded with ads of its own.
Rick Jackson, founder of Jackson Healthcare, is currently running for governor of Georgia. Axios reported last month that he has spent $50 million of his own money on the race. Mr. Jackson, whose name is a coincidence, has denied involvement in the Blue Cross attack ads. But reporting from the Atlanta Journal Constitution showed that the same lawyer who incorporated Alabama Patients First also incorporated Georgians for Integrity, a similar group that is behind attack ads against Mr. Jackson’s opponent in the governor’s race.
In his email to employees, Quinlivan said the hospital is “genuinely running out of money” and has developed a closure plan.
“Our closure plan has been developed with patient and staff safety, regulatory compliance, and complete operational and communication transparency as its highest priorities. The plan was created by our administrative team in partnership with department directors, and I am confident it provides for a safe, orderly, and disciplined process should implementation become necessary.”
Dr. Nina Ford Johnson, a Mobile pediatrician who serves as president of the Medical Association of the State of Alabama, said the news about Jackson points to a larger problem with health care in the state.
“If we want patients to have access to physicians, hospitals and emergency care in the years ahead, we must address the underlying issues that are making it increasingly difficult to practice medicine in Alabama,” Johnson said in a statement. “That means meaningful medical liability reform, fair reimbursement and reducing unnecessary administrative burdens that pull physicians away from patient care and contribute to Alabama’s doctor shortage.”