ACTION 8 UPDATE: Jackson Hospital gets lifeline to remain open, at least for now
ACTION 8 UPDATE: Montgomery’s Jackson Hospital has received additional funding to allow it to remain open, at least until later this year.
As Action 8 News has reported, the hospital filed for Chapter 11 bankruptcy protection in February. Last year, it missed a $60 million interest payment on bonds. S&P Global said it lowered the hospital’s long-term rating to ‘D’ from ‘CC’ on The Medical Clinic Board of the City of Montgomery’s series 2015 bonds. S&P Global says that it understood that Jackson’s liquidity is very thin and insufficient to meet the bondholders’ demand for full payment.
This week, a federal bankruptcy judge in Montgomery has heard more details about Jackson Hospital’s financial plight.
The judge has approved a loan that officials say will help keep the hospital open through the holiday season. The hospital’s Debtor-In-Possession (DIP) loan was extended from $22 million to $35 million.
Jackson Investment Group announced that it will add an additional $15 million on top of the court approved loan.
In addition, the Montgomery City Council voted to support the hospital, but the Montgomery County Commission has yet to make a decision.
Action 8 News spoke with Montgomery County Commission Chairman Doug Singleton about whether he feels the future of Jackson Hospital has been secured.
“I thought it was a very favorable rule for Montgomery, so after that is completed, then they’ll go through the bankruptcy procedures and finish that up, and they’ll make a decision on whether or not Jackson Healthcare can step in and continue to help fund the hospital,” Singleton said.
The Montgomery County Commission is expected to vote on whether it will contribute money to Jackson Hospital on October 21.
In February, Jackson Hospital said it 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 said without Medicaid expansion in Alabama, it suffered significant financial losses due to its care for uninsured people. In 2023 alone, the hospital said gross charges related to the care of uninsured patients exceeded $45 million.
Jackson Hospital is licensed for 344 beds, serving Montgomery and the River Region as a community not-for-profit facility. It opened in 1946 with 37 beds and five doctors.
