Greenwood Leflore Hospital filed for bankruptcy Wednesday, a move officials said would give it time to negotiate a possible transaction with the University of Mississippi Medical Center while continuing to provide health care services in the Delta region.
“GLH has been and is currently unable to pay its debts as they come due, which conditions were brought on near the end of the pandemic period and have continued since that time,” said Gary Marchand, the hospital’s former interim CEO who serves as a consultant for the hospital’s board, in the bankruptcy filing.
This is the first time the hospital has filed for bankruptcy, said Greenwood Leflore Hospital spokesperson Christine Hemphill.
The court filing is the first time the hospital has publicly acknowledged it is engaged in negotiations with UMMC over the acquisition of certain assets. Mississippi Today previously reported that the hospital and its owners signed a letter of intent in February to discuss a possible transaction in which the hospital would contribute all land, facilities, assets and operations to UMMC, the state’s only academic medical center.
“While there are no guarantees, filing for bankruptcy does not mean the hospital will close,” officials wrote in a Tuesday statement. “Bankruptcy will serve as a tool to stabilize operations by restructuring debt and addressing unprofitable contracts, with the goal of continuing to serve the community.”
Greenwood Leflore Hospital’s interim CEO Gary Marchand talks about the state of the hospital on Wednesday, Sept. 20, 2023. Credit: Eric Shelton/Mississippi Today
The bankruptcy filing will help the hospital protect its remaining cash reserves and finalize negotiations with a larger health care system, it said in a Thursday statement.
“Both objectives are necessary to protect service availability over the long term,” hospital administration wrote.
Established in 1906, the 35-bed public hospital serves an area of the Mississippi Delta with limited access to health care and is jointly owned by the city of Greenwood and Leflore County. It has faced serious financial challenges since the onset of the COVID-19 pandemic, repeatedly warning that its fragile condition could force it to close.
On April 9, the hospital laid off nearly a fifth of its staff and closed four service lines. On Monday, officials issued a formal notice warning employees of potential large-scale layoffs in preparation for the hospital closing on June 15. Officials said they took these steps to prepare for the transition of operations to a larger health system or a potential closure.
In the bankruptcy filing, officials outlined the hospital’s financial downfall following the onset of the pandemic. That instability has intensified due to a recent dispute with the Mississippi Division of Medicaid over debts owed by the hospital, they said. Hospital administration said these payments pushed the facility toward closure and left few options for its continued financial viability.
Before the pandemic, the hospital had sufficient cash reserves and a strategic plan to invest in new services and capital projects, Marchand wrote. When the pandemic arrived, the hospital doubled its number of ICU beds and maintained its services, relying on cash reserves and federal and state grants to fund operations.
But by the fall of 2022, the hospital had depleted its cash reserves and owed the federal government $16.5 million in advance payments it received from the Centers for Medicare and Medicaid during the pandemic. This debt burden compelled the hospital to close its labor and delivery unit and other services. The hospital sought a new CMS designation, which would have allowed it to receive increased reimbursements through Medicare, but it was denied.
The hospital received a financial boon in 2024 when it received increased Medicaid supplemental payments, meant to offset low Medicaid reimbursement rates, amounting to $21.1 million.
“Without this funding, GLH would have been unable to continue operations,” Marchand wrote.
But the size of the payment was calculated using old patient volume data, from before the hospital closed its labor and delivery unit. In June, Medicaid notified the hospital it would recoup $5.5 million from the hospital’s 2024 payments as a part of a routine reconciliation process meant to balance the hospital’s actual volume with its predicted volume.
The hospital has repeatedly warned that the repayment of this debt could force the facility to close. In response, a Hinds County chancery judge in March directed the division to temporarily suspend collection efforts.
Supplemental payments from Medicaid also fell due to the hospital’s decreased patient volumes in subsequent fiscal years — from $17 million in 2025 to $12 million the next year. The facility also faces $1.8 million in recoupments for the 2025 fiscal year, though the division has not yet initiated collection of those debts, according to the bankruptcy filing.
“GLH has only remained viable since (the pandemic) due to extraordinary, one-time infusions of cash,” Marchand wrote. “Furthermore, GLH’s revenues have continued to dramatically decrease.”
The hospital’s owners, the city and county, also do not have the means to provide the hospital additional funding when doing so provides no certainty of long-term viability for the hospital, he wrote.
During 2023 and 2024, the city and county provided a combined $11.4 million of capital in the form of cash, utilities and a $7.5 million working capital line of credit, Marchand wrote.
The use of the credit was at times controversial. In one instance, the Leflore County Board of Supervisors denied the hospital’s request to draw down $1 million from that line of credit to cover hospital payroll in September 2023, but reversed course weeks later.
Greenwood City Council President Ronnie Stevenson said the city does not have the ability to support the hospital financially.
“We do not have the funds,” Stevenson said.
Leflore County Board of Supervisors President Eric Mitchell could not be reached for comment by press time.
Lawmakers passed a bill during the legislative session that would allow the hospital to file for bankruptcy, which became law in March without Gov. Tate Reeves’ signature. The city of Greenwood and the Leflore County Board of Supervisors approved a bankruptcy filing on Jan. 20 and March 23, respectively.
