Morehead Memorial Hospital Files for Chapter 11 Bankruptcy
Eden, NC-based Morehead Memorial Hospital has filed for Chapter 11 bankruptcy as it struggles with a mounting debt burden.
The Board of Trustees at Morehead Memorial has decided to seek bankruptcy protection against creditors, with an aim to restructure the hospital’s debt.
The document filed with the bankruptcy court lists the hospital’s assets to be between $10.0 million and $50.0 million. Liabilities are also listed within the same range. The hospital’s total number of creditors exceeds 5,000, with the largest unsecured creditor being a medical device company in San Diego that is owed $641,629, according to hospital news magazine Becker’s Hospital Review.
Morehead Memorial Hospital employs roughly 700 employees, none of whom will be laid off following the bankruptcy. Members of the hospital’s management team will also continue in their same capacities.
Morehead Memorial has confirmed that the hospital will continue its operations throughout the bankruptcy proceedings, and patient care will not be affected during the process.
The Board wishes to find a “strategic partner” after successfully restructuring the business. Partnership with another party may help the hospital find long-term stability in an uncertain environment.
Over a dozen hospitals have already filed for bankruptcy this year. Part of this has to do with a change in the criteria for insurance reimbursements. Under the Affordable Care Act, which is often dubbed Obamacare, the criteria for reimbursements was made stringent; following which many hospitals saw a sharp decline in revenues.
In addition, the American healthcare sector is facing growing uncertainty as the Trump Administration proposes to repeal the Affordable Care Act. Under the American Health Care Act being proposed by the Republican-led Senate, federal funding to Medicaid will be slashed. In that event, hospitals will see a rise in costs per patient, while at the same time facing a decline in revenue from Medicaid reimbursements.
Morehead Memorial Hospital first opened its doors in 1960. It has been providing care for over half a century. In addition to the Morehead Memorial general care hospital, a 121-bed skilled nursing facility and several medical office buildings also fall under its umbrella of operations within North Carolina.
“Morehead Memorial Hospital in Eden files for bankruptcy,” Fox8, July 11, 2017.
“North Carolina hospital files for bankruptcy,” Becker’s Hospital Review, July 11, 2017.