MONTGOMERY, Ala. (WSFA) – Jackson Hospital says it’s running out of time as it navigates bankruptcy, and closure is becoming an imminent possibility.
Hospital leaders are warning it could begin shutting down its operations by the end of the month if it can’t reach an agreement or court order to increase reimbursement rates from Blue Cross and Blue Shield of Alabama.
According to court documents, the hospital’s board of directors met Tuesday and passed a resolution setting a firm deadline of June 25 for reaching an agreement on increasing the rates.
The hospital argues BCBS Alabama should pay Jackson the same reimbursement rates it already pays nearby Baptist Medical Center South and says without that change, the hospital won’t survive.
The hospital sued the insurance company in December, claiming it was withholding crucial funds of about $1.4 million as the hospital continues fighting to remain operational. BCBS Alabama called the allegations “not accurate” and said “the hospital has twisted our gesture” of voluntarily providing it with a cash advance.
WSFA 12 News has reached out to Blue Cross Alabama for comment on the hospital’s latest resolution.
If an agreement isn’t met by the June 25 deadline, the board has authorized and directed the hospital’s management to begin closing procedures, according to John Quinlivan, Jackson’s president and CEO.
Quinlivan says the closure plan would begin July 1, or earlier if necessary, and would include steps to “cease business operations and wind up the hospital’s affairs.”
“This is not a boy crying wolf. This is not litigation posturing. This is a true emergency. Jackson Hospital is at the end of its rope,” the filing to the bankruptcy court states.
The filing requests the bankruptcy court “set the preliminary injunction hearing for a date on or before June 25, 2026. Otherwise, it will be too late to save Jackson Hospital.”
Jackson underwent “restructuring efforts” in April, though it did not provide any details about how many of the hospital’s staffers or which specific departments would be affected by the restructuring, or exactly what the restructuring plan would involve.
The hospital has seen Gov. Kay Ivey join Montgomery County, along with a growing number of government agencies, pledge millions in financial support in an ongoing effort to prevent a decline in health care availability in the region.
WSFA 12 News has reached out to the governor’s office to request comment, including how the state’s $40 million commitment could be affected by the latest developments. The same request is being made to the Montgomery County Commission, which committed $10 million.
The hospital has been in bankruptcy proceedings since Feb. 2025.
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