John Quinlivan, CEO of financially challenged Montgomery, Ala.-based Jackson Hospital, has warned of imminent closure unless BCBS Alabama agrees to raise reimbursement rates to match Baptist Medical Center South, located three miles away.
“We filed a brief in our bankruptcy court, sharing a resolution of the board that was voted on [June 2] at our board meeting,” Mr. Quinlivan told Becker’s. “The resolution was that if we don’t have a solution to the rate problem we have with Blue Cross by the 25th of June, we will then announce our closure, and we will spend the month of July closing the hospital. We remain hopeful that we’ll get some resolution from Blue Cross.”
Should the hospital close, Mr. Quinlivan, who has been CEO since November, said in a June 2 news release shared with Becker’s that more than 71,000 patients would need to find new physicians, 500,000 prescriptions would need to be written by someone else and more than 50,000 emergency room patients annually would be directed to other facilities. He warned that the closure would also result in job loss, access and capacity in Montgomery.
“Jackson Hospital is dying. And one company has the power to save it,” he said. “The recovery plan we built is comprehensive — new leadership, disciplined cost reductions, physician recruitment, service-line growth, public support and private financing. But it has one essential requirement: fair reimbursement from Blue Cross and Blue Shield of Alabama.”
The dispute between the two parties has been building for months. Jackson Hospital sued BCBS Alabama in February for $1.4 million in offsets the hospital claimed the insurer improperly withheld after it sought Chapter 11 protection in February 2025.
Jackson Hospital claimed BCBS Alabama started collecting on a 2023 cash advance of more than $1.5 million in May 2025, which violated the bankruptcy’s automatic stay. BCBS Alabama disputed that narrative, and said recoupment started after a seven-month delay made at the hospital’s request and with its “express agreement and knowledge.”
Mr. Quinlivan said in the news release that commercial reimbursement offsets the losses from Medicare, Medicaid and uninsured patients, and that BCBS Alabama’s differential payments to one hospital and not theirs “becomes a public health emergency.”
In a June 4 statement shared with Becker’s, BCBS Alabama said it has been “more than fair” in its increased reimbursements and additional support to Jackson Hospital, both prior and during its bankruptcy.
“We have tried to work with Jackson Hospital to help find a reasonable solution to its financial challenges, but we are less than 20% of its revenues,” the BCBS Alabama statement said. “Unfortunately, what Jackson Hospital seeks is neither affordable nor fair to our customers. Our members must be our priority, as we are committed to managing healthcare costs and maintaining access to high-quality care.”
In late February, Alabama Gov. Kay Ivey committed $40 million for capital expenses at Jackson Hospital once it exits bankruptcy. Jackson Investment Group, a company that provided Jackson Hospital its initial debtor-in-possession financing, has also provided $35 million in financing to keep the hospital open while a solution is pursued.
“But private capital alone cannot fix a broken reimbursement system propped up by a monopoly insurer which benefits from this arrangement,” Mr. Quinlivan said. “The plan exists. The hospital can be saved. The solution is straightforward. Blue Cross must pay Jackson Hospital the same fair rates it already pays Baptist South — rates that reflect the care we provide, the community we serve, and the mission we carry.”
Montgomery Mayor Steven Reed said in a June 4 statement shared with Becker’s that the city is aware of discussions between Jackson Hospital and BCBS Alabama and is hopeful the parties can come to a resolution.
“Jackson Hospital plays an important role in providing healthcare services to Montgomery residents and the surrounding region,” Mr. Reed said. “Our primary concern remains ensuring that patients continue to have access to quality healthcare and that our community maintains a strong healthcare infrastructure.”
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