Greenwood Leflore Hospital filed for bankruptcy Wednesday, aiming to stabilize its finances and negotiate a potential acquisition with the University of Mississippi Medical Center. The move allows the hospital to continue providing services in the Mississippi Delta, according to officials.
Gary Marchand, the hospital’s former interim CEO and current consultant for the board, said in the bankruptcy filing that the hospital has been unable to pay its debts as they come due since the end of the pandemic. This marks the first time the hospital has filed for bankruptcy, and it is the first public acknowledgment of negotiations with UMMC over the transfer of assets, including land and facilities, under a letter of intent signed in February, according to hospital officials.
In a statement Tuesday, hospital officials emphasized that bankruptcy does not equate to closure. They said it is a tool to restructure debt and address unprofitable contracts to ensure the hospital’s long-term operation. The filing aims to protect remaining cash reserves and facilitate negotiations with a larger health system, the hospital added.
Established in 1906, the 35-bed public hospital serves a region with limited access to healthcare. It is owned jointly by the city of Greenwood and Leflore County. The hospital has faced financial challenges since the COVID-19 pandemic began, including layoffs and service line closures. Officials warned of potential large-scale layoffs and possible closure by June 15 as part of preparations for operational transition or shutdown.
The hospital’s financial decline has been compounded by disputes with the Mississippi Division of Medicaid over debts totaling millions of dollars. Federal pandemic relief and increased Medicaid payments temporarily kept the hospital afloat, but depleted cash reserves by late 2022. The hospital also owes the federal government $16.5 million from advance payments received during the pandemic.
Despite a $21.1 million Medicaid supplemental payment in 2024, the hospital faces a $5.5 million recoupment and projected reductions in future Medicaid payments due to declining patient volume. The hospital warned that repayment demands could force closure, although a court temporarily suspended collection efforts earlier this year.
The hospital’s owners, the city and county, have limited financial capacity. Over the past two years, they provided a total of $11.4 million in support, including cash, utilities, and a line of credit. City officials have stated they cannot provide further funding. State legislation approved in March allows the hospital to file for bankruptcy, with Greenwood and Leflore County approving the move earlier this year.
Jon Ross Myers is the executive editor and publisher of the Mississippi News Network, Mississippi's largest digital only media company. He can be reached at editor@tippahnews.com
