Greenwood (Miss.) Leflore Hospital filed for Chapter 9 bankruptcy protection April 15, a hospital spokesperson confirmed to Becker’s.
The filing comes days after a WARN notice was sent to employees informing them the hospital could close June 15 if it is unable to stabilize its finances. The hospital also recently announced it was laying off 86 employees — about 17% of its workforce — and eliminating multiple service lines as it prepares for closure or is acquired by a larger health system.
The Mississippi Division of Medicaid has been seeking to recoup millions of dollars in alleged overpayments from the hospital. To date, the department has recouped $2.5 million in payments that would have otherwise been received by the hospital, according to the employee update. The department is seeking another $5 million. A Mississippi judge in March granted a temporary pause on the repayment.
With the bankruptcy filing, the hospital is seeking to protect its remaining cash reserves “given the impact of the Medicaid recoupments and allowing a sufficient period to finalize negotiations with a larger healthcare system, according to a Q&A from administrators shared with Becker’s.
“Both objectives are necessary to protect service availability over the long term,” the administrators said.
The hospital is exploring potential takeover by Jackson-based University of Mississippi Medical Center. A letter of intent signed in early March gives both parties 180 days to negotiate exclusively, though either side may terminate the deal with 30 days’ notice. Greenwood Leflore administrators said the bankruptcy filing is not expected to affect ongoing negotiations.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.