A Hinds County Chancery judge has ordered the Mississippi Division of Medicaid to temporarily stop collecting debt from Greenwood Leflore Hospital. The order comes after the hospital argued that resuming recoupments could lead to its closure, according to court documents.
Judge J. Dewayne Thomas’s order requires the state to pause the recoupments while the hospital’s legal case proceeds. The hospital must post a $50,000 cash bond within 30 days to keep the order in effect, court officials said.
The dispute centers on a state program intended to help struggling hospitals by providing supplemental funding. Greenwood Leflore received an initial boost from the program, but payments were later recalculated based on updated patient volume data. The recalculations reflected a decline in patient numbers after the hospital closed its labor and delivery and intensive care units in 2022.
Gary Marchand, a consultant for the hospital’s board and former interim CEO, told Mississippi Today that the hospital appreciates the court’s understanding of its financial crisis. He warned that if Medicaid resumes recoupments, the hospital could face insolvency or closure. Medicaid officials did not respond to requests for comment.
In a March 6 court filing, Marchand said the hospital has exhausted all efforts to secure a bond needed to pause repayments. The hospital is exploring options to sell, lease, or transfer the facility to a larger health system. The hospital and state agreed in December to delay repayments until March, but progress on negotiations has been slow, Marchand added.
Earlier this month, the hospital and its owners signed a letter of intent to transfer all assets to the University of Mississippi Medical Center or its affiliate. The proposed donation would give UMMC control over the hospital’s facilities, clinics, and operations. The hospital estimates it needs four to six months to complete negotiations, during which the repayment pause would be necessary.
Recently, state lawmakers advanced legislation allowing the hospital to file for bankruptcy, opening the door for another entity to take over. Senate Bill 3230 passed both chambers on March 6 and now awaits the governor’s approval, according to Sen. Rita Parks, a Republican from Corinth and chair of the Local and Private Committee.
