Greenwood (Miss.) Leflore Hospital could close on June 15 if it is unable to stabilize its operations, the Mississippi Free Press reported April 13.
A WARN notice was sent to employees April 13 informing them that the closure will affect “substantially all employees and is expected to be permanent,” according to the report. The hospital said in an accompanying employee update notice that it reserves the right to amend the notice and revise its effective date.
The notice comes less than a week after the hospital announced it was laying off 86 employees — about 17% of its workforce — and eliminating multiple service lines as it prepares for closure or is acquired by a larger health system.
The Mississippi Division of Medicaid has been seeking to recoup millions of dollars in alleged overpayments from the hospital. To date, the department has recouped $2.5 million in payments that would have otherwise been received by the hospital, according to the employee update. The department is seeking another $5 million. A Mississippi judge in March granted a temporary pause on the repayment.
Among the options the hospital is exploring is a potential takeover by Jackson-based University of Mississippi Medical Center. A letter of intent signed in early March gives both parties 180 days to negotiate exclusively, though either side may terminate the deal with 30 days’ notice.
“These recoupments are significantly affecting the hospital’s ability to fund its operations and there is no guarantee that negotiations with the larger system will be successful,” the update said.
Greenwood Leflore said its goal is to complete the potential acquisition in the summer. The hospital is also considering a potential Chapter 9 bankruptcy filing, which would allow for operations to continue while efforts to complete the transaction are ongoing.
The hospital did not immediately respond to a request from Becker’s seeking comment.
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