A federal judge has denied an emergency request by Montgomery, Ala.-based Jackson Hospital, which filed for bankruptcy in February, to force Blue Cross Blue Shield of Alabama to raise its reimbursement rates to match area hospital Baptist Medical Center South.
According to court documents filed June 17 in U.S. Bankruptcy Court for the Middle District of Alabama and reviewed by Becker’s, Jackson Hospital’s board had “further resolved to close the hospital” if it did not receive reimbursement by June 25 that is “equal to similarly situated facilities, or raise additional capital, and provide for the financial and operational sustainability of the hospital.”
“Blue Cross and Blue Shield of Alabama appreciates the court’s ruling,” a spokesperson for BCBS Alabama said in a June 18 statement shared with Becker’s. “This decision supports our responsibility to protect our customers — the nearly 2 million members here in Alabama who depend on us for access to high‑quality, affordable healthcare. That said, we very much want Jackson Hospital to remain open and continue providing care to patients, and we remain hopeful that a solution can be found.”
Judge Christopher Hawkins ruled that Jackson Hospital failed to meet the legal burden required for such relief and had not established its likelihood of success. While the hospital argued BCBS Alabama’s refusal to match rates paid to Baptist Medical threatened its survival, Mr. Hawkins found that any risk of closure was self-imposed, and noted $80 million in government grants remained available to the hospital once it exits bankruptcy.
“The risk of immediate irreparable harm is the creation of the Hospital, JHS, and the DIP Lender,” the ruling said. “A lifeline — offered in good faith by the Government Entities — has been thrown to the hospital, but the hospital will not grab it.”
In February, the state of Alabama committed $40 million for capital expenses at Jackson Hospital once it exits bankruptcy.
“Even if half of the grant money is restricted to infrastructure (which in any event is essential to operations), there remains $40.0 million in unrestricted grant money available, giving the hospital freedom to utilize operational revenue and other financial resources to fund operations,” the ruling said.
Becker’s has reached out to Jackson Hospital for comment and will update this story should more information become available.
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