Bankruptcy Judge Weighs Role in Jackson Hospital Reimbursement Dispute
MONTGOMERY, Ala. (WAKA) — Attorneys for Jackson Hospital and Blue Cross and Blue Shield of Alabama returned to bankruptcy court Wednesday as the Montgomery hospital faces a potential closure within weeks.
Dozens of doctors, nurses and hospital employees filled the gallery of a courtroom in the U.S. Bankruptcy Court in the Middle District of Alabama to show support for Jackson Hospital during a hearing before Judge Christopher L. Hawkins.
The hearing focused on whether Hawkins will preside over an emergency injunction hearing next week involving a dispute over reimbursement rates paid by Blue Cross and Blue Shield of Alabama to Jackson Hospital for medical visits and procedures.
During the hourlong proceeding, attorneys for both sides agreed that Hawkins has jurisdiction and should hear the case because of his involvement in the hospital’s Chapter 11 bankruptcy proceedings over the past 18 months.
Hawkins said on the record that he does not want to see the hospital close.
“For a year and a half the judge, along with a lot of us, have been trying to save the hospital, so I appreciate that he is treating it seriously,” Jackson Hospital President and CEO John Quinlivan said after the hearing. “We expect that he will recognize that he does have the jurisdiction and ultimately we hope that he will grant the emergency injunction and will be able to sustain the hospital.”
Attorneys for both Jackson Hospital and Blue Cross and Blue Shield of Alabama declined to comment following the hearing.
Hawkins said he expects to decide within 24 hours.
Jackson Hospital entered Chapter 11 bankruptcy protection in February 2025. Hospital officials have said the facility is running out of money to continue operations. The hospital’s board said it would announce the hospital’s closure on June 25 unless BCBS agrees to provide insurance reimbursements at a higher rate, comparable to what it gives Baptist Medical Center South. Jackson Hospital is asking that unless BCBS agrees to a higher reimbursement rate on its own, that the court set the preliminary injunction hearing for a date on or before June 25.
Blue Cross Blue Shield of Alabama released an op-ed earlier this week which you can read below.
Keeping Healthcare Affordable While Protecting Our Customers
Authored by: Dow Briggs, M.D., Executive Vice President, Blue Cross and Blue Shield of
Alabama
Recent news regarding Jackson Hospital’s potential closure has understandably raised concerns
among patients, families, employers, and healthcare providers across the River Region.
As a not-for-profit healthcare insurer, Blue Cross and Blue Shield of Alabama’s priority remains
unchanged: ensuring Alabamians have access to high-quality healthcare while keeping coverage
affordable for the nearly two million Alabama members who rely on us. In this challenging
environment of rising healthcare costs, we must balance access, quality, and affordability. What
Jackson Hospital is seeking is neither affordable nor fair to our customers – who will ultimately
bear the costs – and does not align with our mission of providing the best value for our members’
healthcare dollar. That is at the core of what we do every day. BCBSAL spends more than 93
cents of every premium dollar to pay for our members’ medical care. In 2025, BCBSAL spent
over $13 billion on medical care for our customers in Alabama, including nearly $5.7 billion to
Alabama hospitals.
Our role is to ensure those dollars are spent responsibly so that coverage remains accessible for
families, small businesses, and employers throughout the state. For that reason, Blue Cross
remains committed to solutions that support patient care without placing unnecessary financial
burdens on Alabama families and employers. We believe those goals are not mutually exclusive.
In fact, they must go hand-in-hand.
As discussions continue regarding Jackson Hospital’s future, our focus remains on our members.
Jackson Hospital is a valued part of the region’s healthcare system, and that is why we have
continued to come to the table to negotiate and try to be part of a solution to its financial
problems. The reality is that these financial problems are not ours to solve, given that BCBSAL
is less than 20 percent of Jackson’s revenue and patient base. Yet, we have worked with Jackson
Hospital over the years to increase reimbursement rates and even sought solutions outside
normal processes because Jackson Hospital is a beneficial part of the community. We know our
members go there to receive general medical and emergency services, but they should not be
asked to pay as if they were receiving the specialty or intensive critical care services received at
other hospitals. Despite these good-faith efforts on our part, Jackson continues to make false
statements.
Healthcare is too important to be driven by rhetoric or finger-pointing. Healthcare reimbursement
is not a one-size-fits-all proposition. Hospitals like Jackson Hospital and Baptist South differ in
the complexity of services they offer, the patients they treat, the specialists they employ, and the
resources required to deliver care. We worked for years to support Jackson through negotiated
agreements that reflect the services it provides and the needs of the communities it serves.
Taking care of our members and making sure they have access to the care they need is our top
priority. Blue Cross and Blue Shield of Alabama is committed to working closely with our
members and healthcare provider partners to ensure continuity of care and minimize disruption
for patients. BCBSAL is fortunate in that our members are served by a broad network of healthcare providers, and we will help coordinate care so that our members continue to receive the services they need. We want our members to know we are available to them. If they have questions, they can call the number on the back of their BCBSAL card.
Alabamians deserve a healthcare system that is accessible, sustainable, and affordable. That is
the standard Blue Cross and Blue Shield of Alabama will continue to uphold, and it is the
principle guiding our efforts as we work toward solutions that serve our customers today and
strengthen healthcare for the future.
