Hazel Hawkins will remain open and “fully committed to delivering quality patient care for the greater community while leadership looks for a strategic partner or buyer,” according to a May 22 news release from the hospital.
Chapter 9 allows financially distressed cities, hospital districts and other public entities protection from its creditors while it develops and negotiates a plan for adjusting its debt, according to the federal courts website.
A November fiscal emergency declaration by the board authorized a Chapter 9 filing, but the hospital district decided to focus on short-term financial stabilization and creditor negotiations. In the last six months, it has recorded more than $11 million in cost savings, loans and prepayments to support the district through summer. A hospital spokesperson said in the release the filing will allow it to “deal with larger issues we just can’t tackle outside of Chapter 9.”
The hospital said the Chapter 9 process has four key components:
- It will help resolve contract issues relating to its self-insured status for healthcare. benefits for employees, which is costing the district more than $15 million annually and is “not in alignment with other similar sized institutions.”
- It allows the hospital to remain fully operational during the process.
- It can accelerate the search for a partner or buyer.
- The court can appoint an ombudsman to ensure quality of care provided.
