Jackson Hospital announces that it’s emerged from bankruptcy
MONTGOMERY, Ala. (WAKA) – Montgomery’s Jackson Hospital has announced that it has emerged from Chapter 11 bankruptcy protection.
Jackson Hospital sent Action 8 News a message from CEO John Quinlivan this morning, saying, “Good morning. I’m writing to confirm to you that this morning we exited bankruptcy. Hallelujah!”
Quinlivan says that only about 30% of hospitals that declare bankruptcy successfully come out of it.
Last month, Quinlivan announced that the necessary paperwork had been signed to emerge from bankruptcy. That came after the hospital’s announcement on July 3 that it would remain open and not close, which had been a possibility.
This milestone came after an agreement with Blue Cross Blue Shield of Alabama and financial support from local and state governments. Quinlivan said the state’s support was contingent on the hospital emerging from bankruptcy.
Blue Cross and Blue Shield of Alabama and the hospital had long been at odds over insurance reimbursement rates. Quinlivan said there were frustrations on both sides, but they kept negotiating without giving up.
The Jackson Investment Group is also providing the hospital with financial aid. That organization is run by Rick Jackson, who is the Republican nominee for governor of Georgia.
Quinlivan didn’t disclose specifics about the hospital’s financial structure. He said Jackson must manage its costs better, rebuild some of its services and grow revenue. On top of that, he says the hospital faces $150 million in infrastructure needs and another $50 million in capital needs for medical equipment.
Montgomery Mayor Steven Reed released a statement last month, which provided some financial information:
“The city has committed $22.5 million; $15 million already provided last April and $7.5 million over the next three years; and Montgomery County has committed $17.5 million, including $10 million in immediate assistance. Alongside these local investments, the State’s Amendment 666 Bonding Commission has authorized up to $40 million in bonds once Jackson emerges from bankruptcy.”
As Action 8 News has reported, the hospital filed for Chapter 11 bankruptcy protection in February of 2025. That came after it missed a $60 million interest payment on bonds.
In filing for bankruptcy, 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.
