Roseland Community Hospital in Chicago has filed for Chapter 11 bankruptcy protection to restructure its debt while it maintains normal operations.
The hospital said it needed to restructure its debts because of a recent medical malpractice settlement, several threatened lawsuits over service agreements, decades of underfunding for safety-net hospitals and potential Medicaid cuts under HR 1, according to a Nov. 4 hospital news release shared with Becker’s.
“Roseland Community Hospital is taking decisive action to protect the hospital from federal government policies that threaten its future,” hospital spokesperson Nikia McGee said in the release. “This filing is intended to address debt that threatens our operations. It will not disrupt patient care, and it will allow us to continue serving the Greater Roseland community.”
The filing comes a month after the hospital shared plans to close its labor and delivery unit by the end of October amid financial pressures. CEO Tim Egan told Becker’s in June that the hospital was fighting to remain open.
Roseland filed the Chapter 11 petition Nov. 4 in the U.S. Bankruptcy Court for the Northern District of Illinois, according to court documents reviewed by Becker’s. The petition lists estimated assets and estimated liabilities each between $10 million and $50 million.
Roseland hired Chicago-based law firm Crane, Simon, Clar & Goodman as bankruptcy counsel. It expects to submit a plan of reorganization within 120 days of the filing.
The hospital also said it will keep working with the state of Illinois to make sure all of its grant agreements stay in compliance. In August, it submitted a “Pivot Plan” to the state. The plan would expand behavioral health services, create a same-day surgery unit and set up a maternal-fetal home with Des Plaines, Ill.-based Maryville Academy to serve patients on Chicago’s Far South Side, the release said.
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