As Greenwood Leflore Hospital’s financial crisis plods on, more people are stepping up to propose remedies aimed at keeping the hospital’s doors open. 

Hospital leaders warned in December that the facility was on the brink of closure under the weight of debt owed to the Mississippi Division of Medicaid. This debt stemmed from overpayments from a program designed to support struggling hospitals. The public hospital faces a looming deadline at the end of February to reach an agreement with the agency, but hospital officials say negotiations have stalled.

Under the agreement, the hospital was expected to secure a bond by Jan. 31. The terms of a bond remain unresolved, said Gary Marchand, the hospital’s former interim CEO who is now serving as an executive consultant advising the hospital’s board.

“Our understanding is that the parties will have to bring this dispute back to the Chancery Court for any further relief from Medicaid’s efforts to reduce the hospital’s payments,” Marchand said in an email to Mississippi Today. 

Matt Westerfield, a spokesperson for the Division of Medicaid, declined to comment, saying it would be inappropriate to do so during ongoing litigation.

Greenwood Leflore Hospital serves roughly 300,000 patients in the Mississippi Delta, a region of the state with limited access to health care. The facility is jointly owned by the city of Greenwood and Leflore County. Members of the City Council and Board of Supervisors told Mississippi Today they were unaware of the current status of efforts to secure a bond. 

At the same time, state lawmakers are proposing legislation to provide relief. These bills include measures that would give hospitals more time to settle overpayments during times of financial hardship and outline the terms for a potential sale of the hospital, backed by a proposed $10 million state appropriation. 

In December, Marchand testified during a hearing in the case with Medicaid that the hospital’s ongoing financial difficulties, paired with $3.5 million owed to Medicaid, would force the facility to close.

“We will make our last payroll tomorrow,” Marchand said Dec. 18, when he was then serving as interim hospital CEO. Before reaching the agreement that gave both parties more time to negotiate, Marchand warned that once layoffs were announced, staff would likely seek work elsewhere, making it difficult to reopen the hospital even under new leadership.

The dispute with the Division of Medicaid began in June, when the agency informed the hospital it would recoup $5.5 million in state-directed payments, or supplemental funds intended to offset low Medicaid reimbursement rates. In September, hospital leaders warned the agency that the proposed repayment schedule of $900,000 a quarter — with about $2 million already recovered in 2025 — would severely strain the hospital’s finances. 

The overpayments resulted from Medicaid calculations based on outdated data that did not account for reduced patient volumes after the hospital closed its labor and delivery and intensive care units in 2022. According to the Division of Medicaid, hospitals were notified two years ago that a reconciliation would take place in 2025. They did not know then how much they would owe. 

The two sides have since sparred over the terms of a repayment plan. At a December court hearing, the Division of Medicaid said it would require financial guarantee before negotiating a repayment plan, a stipulation the hospital said it would agree to. 

The conflict between the hospital and Medicaid officials in Mississippi is but the latest trial in a litany of hardships the hospital has faced. 

Before the COVID-19 pandemic began, the hospital was losing up to $9 million a year, Marchand previously told Mississippi Today. To keep its doors open, the hospital shut down departments and clinics, went up for lease multiple times, drew down millions of dollars in credit, applied for grants from the state Legislature, and pursued a more lucrative hospital designation. In 2023, the hospital suspended the use of 173 beds to control costs, according to an audit. 

The House passed a bill Wednesday sponsored by House Medicaid Chairwoman Missy McGee, a Republican from Hattiesburg, that would require the Division of Medicaid to give providers 12 months to repay “incorrect payments” if immediate repayment would cause financial hardship. 

The Senate Public Health and Welfare Committee passed a bill with similar provisions, which would stall recoupments from Greenwood Leflore until May 1. 

During a Jan. 28 Senate budget hearing, Mississippi Medicaid Executive Director Cindy Bradshaw said the payments were not made “incorrectly,” but were the result of the program’s routine reconciliation process. Hospitals are aware that when inpatient visits decline, as they have at Greenwood Leflore in recent years following the closure of beds and services, they will owe money during reconciliation. 

“A prudent businessperson would have been setting that money aside,” Bradshaw said. 

Marchand said McGee’s bill alone would not be enough to save the hospital.

“The hospital’s financial situation requires a multi-year repayment plan to prevent the closure of service lines,” Marchand said. 

Lawmakers have also advanced a separate proposal aimed at the hospital’s long-term future. A bill authored by House Public Health and Human Services Chairman Sam Creekmore, a Republican from New Albany, would authorize the city of Greenwood and Leflore County to sell or lease the hospital within the next year, provided they continue to operate the emergency room and swing-bed program. The bill would also appropriate $10 million to a potential new owner.

Creekmore said that he, along with Senate Public Health and Welfare Chairman Hob Byran, a Democrat from Amory, met with the hospital board twice in recent months.

“It was evident they did not want to be in the hospital business anymore,” Creemore said. “They want to sell or lease it.” 

Marchand said he appreciates lawmakers’ efforts to save the hospital, but there are no current efforts to sell the hospital. 

“At this time, the hospital has taken no steps to consider closure of any service lines or entertain a sale or lease of the hospital,” he said.

City Council President Ronnie Stevenson said he would be open to a proposal to sell the hospital to the right buyer, so long as it would maintain the hospital’s long-term sustainability. 

“I just want to make sure we sell to the right people,” Stevenson said. “…I don’t see us, the county and the city, able to maintain it without any help.” 

Leflore County Supervisor Anjuan Brown said he, too, would support a sale if it was necessary to save the hospital.

But Rep. Solomon Osborne, a Democrat from Greenwood, said the bills proposed to help the hospital are nothing more than stop-gap measures that skirt what he sees as the more obvious solution to saving the hospital: Medicaid expansion. 

“It wouldn’t really solve the long-standing problems that we have,” he said, pointing to the hospital’s large portion of uninsured patients. 

And, he added, if the Legislature is willing to give $10 million to a potential hospital buyer, they could offer the same amount to the hospital’s existing owners to shore up its finances.

Preparing for the worst-case scenario, the hospital’s administration said it is seeking approval from the state Legislature to file for bankruptcy in a Jan. 20 memo to staff. Officials stressed it would be used only “in the event it becomes necessary” and that they remain optimistic bankruptcy can be avoided. 

The Greenwood City Council approved a resolution on Jan. 20 authorizing the hospital board to take steps needed to pursue bankruptcy protection if required.

“A last, last resort,” said Stevenson. “We will not do this unless it’s a last resort just to save the hospital.” 

The Board of Supervisors tabled the request at its Feb. 4 meeting. Supervisor Brown said he needed more information on how a bankruptcy filing could affect employee pensions before voting.

The hospital has recently made strides to shore up its tenuous finances. In April, Greenwood Leflore was one of three hospitals in the state chosen for the Rural Community Hospital Demonstration Program, an initiative operated by the Centers for Medicare and Medicaid Services.

“We thought we had finally climbed out of the COVID hole,” Marchand said Dec. 18 of the hospital’s acceptance into the program. 

But Greenwood Leflore’s trials are likely not over yet. The state-directed payments that helped to stabilize Greenwood Leflore’s finances after it was forced to close valued services are set to be reduced over time beginning in 2028 as a result of federal cuts to Medicaid included in the “One Big Beautiful Bill Act” signed by President Donald Trump in July.

During a House Public Health and Human Services committee meeting Tuesday, Creekmore urged lawmakers to support his proposal, acknowledging that it could change as it progresses through the legislative process. 

“I do believe we need to try every effort we can to keep this hospital open,” he said.