Blue Cross Funding Key to Jackson Hospital’s Survival Plan
MONTGOMERY, Ala. (WAKA) — Jackson Hospital has new leadership and a financial plan they say will keep the facility open and make it profitable within five years, even as the hospital remains under bankruptcy court oversight.
On Wednesday, the hospital’s new CEO, John Quinlivan, and new Board Chairman Charles Evans presented a financial restructuring plan to local, state and federal officials — including representatives from U.S. Sen. Katie Britt’s office — in hopes of securing additional financial support.
According to the proposal, the hospital will need $293 million over the next five years for repairs and upgrades to reach profitability. So far, $187 million has been committed, leaving a $106 million shortfall.
Evans said $56 million of that gap stems from ongoing negotiations with Blue Cross Blue Shield of Alabama (BCBS). The hospital requested $91 million from the insurer, but BCBS has offered $35 million.
“In our estimation, the hospital has been underpaid for years by Blue Cross,” Evans said. “And it shows in the difference between what we can see in the way that Baptist is paid or University of Alabama Birmingham. We need to close that gap and we need to close it quickly, so we need it upfront and we need it to influence the whole five years. If it dribbles in it doesn’t have the same effect.”
Quinlivan says, “Our best estimate was that we were about 30% off of what Blue Cross pays other large hospitals in the state, and so that was the basis for our request. The response was significantly less, and so much less that it imperils the plan.”
Quinlivan, a veteran and retired hospital administrator who has overseen hospitals in Georgia and Florida, was initially brought in to assist with financial due diligence. He was appointed chief executive officer effective on November 3.
“It’s been the most interesting thing I’ve been involved with,” Quinlivan said. “I’ve never seen a situation like this — a hospital that is otherwise great. You’ve got a great facility that just hasn’t been well maintained, great staff, great physicians who have provided great care, and yet the hospital is in bankruptcy. The more I got into it, the more intrigued I was.”
The hospital filed for Chapter 11 bankruptcy in February and currently employs about 2,200 people in the River Region.
Evans said the bankruptcy judge overseeing the case has told the board that by the end of December, the hospital must present a viable, sustainable restructuring plan — or prepare for closure.
“I hope that the next step will be a smaller meeting with representatives from the groups so that we can have a more strategic conversation and hopefully set a plan forward,” Evans said.
