The deal to save Jackson Hospital appears to have hit a snag.
During an interview on the Alabama Politics This Week podcast, Montgomery Mayor Steven Reed said the city would not commit additional money to save the hospital until the announced deal between Jackson Hospital and Blue Cross and Blue Shield of Alabama had been finalized.
BCBS Alabama said the deal has not yet been signed because Jackson Hospital officials have not finalized it, apparently while waiting on additional financial commitments from the city and Montgomery County.
“I don’t see the city coming on to sign an agreement before Jackson Hospital and Blue Cross Blue Shield sign their formal agreement. So we are not going to commit additional dollars while this thing is still in flux as it stands,” Reed said. “Once they’ve signed an agreement, we’ll come back and we’ll have another conversation with the CEO of Jackson and we’ll see exactly where things are and what their plans are moving forward.
“But for the city, we are thinking about how do we not only keep Jackson Hospital open, but how do we make sure it’s not a place of last choice for somebody that’s sick or somebody that has an injury, because those hospitals don’t do very well. So we’ve reached out nationally to philanthropic organizations who have been a part of these type of public-private initiatives.”
In response to Reed’s comments, BCBS Alabama told APR: “Jackson Hospital and BCBSAL reached an agreement several weeks ago, but it has not been finalized because Jackson has said that it doesn’t have the assurances it needs from the City and the County regarding additional support. That is something that Jackson and the local governments—not BCBSAL—are working out. We stand by our agreement and are ready to finalize it as soon as Jackson chooses to exit bankruptcy and move forward.”
Numerous attempts to contact Jackson Hospital officials by phone, text message and email were unsuccessful.
Reed said the city is hesitant to commit more money to the hospital without the deal with BCBS Alabama being confirmed first.
“I don’t know if Jackson Healthcare Group can sustain itself through the end of this year without signing that agreement,” Reed said. “I would be operating under the premise that they can’t. That is a bad circumstance that at any point, if they can’t get that agreement signed, they might have to make some very hard and tough business decisions. And those hard and tough business decisions might be detrimental to the type of care we would like to see as a city.”
Jackson and BCBS Alabama announced an agreement that would keep the hospital open in early July. That announcement ended weeks of speculation that the hospital would close within days, and it seemingly put an end to a very public and sometimes very nasty squabble between the hospital and insurance company. Jackson officials accused BCBS Alabama in court documents of failing to reimburse the hospital at proper rates and blamed the insurer for much of its current financial predicament.
Specifically, Jackson officials claimed in court filings that BCBS Alabama had reimbursed the hospital at rates much lower than nearby Baptist Health Hospital and that it had withheld critical payments.
A bankruptcy court judge, however, was highly critical of those claims in an order, noting that BCBS Alabama had adequate and acceptable reasoning for the rates it paid. Additionally, the insurer had gone beyond its required reimbursement agreement and voluntarily raised its reimbursement rates for the hospital.
At that point, Jackson officials announced that the hospital would close unless some sort of deal was worked out with BCBS Alabama and city and state officials. On July 3, the two reached an agreement on rates that kept the hospital’s doors open. But Jackson officials warned that it would need additional revenue from the city and county, along with other assistance, to remain open.
