The federal patient care ombudsman overseeing bankrupt Montgomery, Ala.-based Jackson Hospital filed a supplemental report June 8 that urged all parties, including Blue Cross Blue Shield of Alabama, the hospital’s lenders and the city of Montgomery to take action to prevent the facility’s closure.
In early June, Jackson Hospital warned of imminent closure unless BCBS Alabama raised reimbursement rates for the facility.
Ombudsman Suzanne Koenig said in her report, obtained by Becker’s, that the closure of Jackson Hospital would result in increased patient volumes at surrounding facilities, contribute to emergency department crowding, longer wait times, increased ambulance diversion, reduced care access and EMS offload delays.
“Periods of high demand could quickly become public health disasters because, without Jackson, the central Alabama healthcare system does not have the capacity and resources to safely handle increased patient volume,” Ms. Koenig said. “Moreover, patients will likely be required to travel greater distances for essential services. … Given the additional barriers to care, patients may decide to limit or forgo care altogether, which could lead to dire results.”
The report also said Ms. Koenig is “disappointed and concerned” that surrounding residents and communities face the possibility of Jackson Hospital’s closure.
Jackson Hospital operates a network of 32 clinics with its outpatient program seeing approximately 237,212 visits and more than 71,000 discrete patients annually. The facility also sees approximately 55,000 emergency department visits annually, with approximately 11,800 patients of these visits arriving via EMS. With a level 3 trauma center, it managed approximately 188 trauma activations in 2025, the report said.
“Jackson plays a vital role in maintaining and improving the health of its communities,” the report said. “The Ombudsman ardently hopes to see Jackson continue operating and urges all parties to work together towards that goal.”
BCBS Alabama Executive Vice President Dow Briggs, MD, said in a June 9 release shared with Becker’s that the insurer pushed back on Jackson’s reimbursement requests, with claims they are “neither affordable nor fair” to its customers.
Dr. Briggs said BCBS Alabama spent more than $13 billion on medical care statewide in 2025, which included nearly $5.7 billion to Alabama hospitals. He argued that Jackson Hospital’s financial challenges are not theirs to solve, with BCBS Alabama representing less than 20% of the hospital’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,” Dr. Briggs said. “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.”
Montgomery Mayor Steven Reed said in a June 10 statement shared with Becker’s that the ombudsman’s report reinforces what many community members know, the hospital is a “critical healthcare resource” for patients across central Alabama.
“The city of Montgomery recognized the importance of preserving healthcare access when it committed $22.5 million to support Jackson Hospital’s reorganization efforts, including $15 million already provided and an additional $7.5 million tied to accountability measures and shared responsibility,” Mr. Reed said.
The city’s focus remains on ensuring area residents have quality healthcare access and hopes that all involved parties can reach a resolution to support long-term care.
Becker’s has reached out to Jackson Hospital for comment and will update this story should more information become available.
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.
