Montgomery’s Jackson Hospital is warning that it could begin shutting down operations within weeks unless it reaches a financial agreement with Blue Cross and Blue Shield of Alabama, escalating a dispute that has become one of the most closely watched healthcare battles in the state.
The hospital, which has been operating under Chapter 11 bankruptcy protection since February 2025, informed a federal bankruptcy court this week that it is facing what leaders describe as a financial emergency. According to court filings, Jackson’s Board of Directors has set June 25 as the deadline to secure either a negotiated agreement or a court order requiring higher reimbursement rates from Blue Cross. If that deadline passes without a resolution, hospital officials say closure procedures could begin as early as July 1.
The latest filing marks another chapter in a months-long legal fight between Jackson Hospital and Blue Cross and Blue Shield of Alabama. The dispute centers on reimbursement rates paid by the insurer and allegations that Jackson has been treated unfairly compared to other hospitals in the region. Earlier reporting by ALPolitics.com detailed Jackson’s lawsuit against Blue Cross, which accused the insurer of withholding critical funds during the hospital’s bankruptcy proceedings…