Pontiac General Hospital in the US has reportedly filed for Chapter 11 bankruptcy as it seeks to reorganise its finances after a critical loss of Medicare funding.
The company filed in the US Bankruptcy Court for the Eastern District of Michigan, as reported by WXYZ.
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This indicates the hospital has assets and liabilities ranging between $1m and $10m, with 50 to 99 creditors.
The bankruptcy filing occurred just before the Centers for Medicare and Medicaid Services were scheduled to cease Medicare reimbursements to the hospital.
This cessation follows a notification earlier in the month to the hospital’s owners about the termination of their reimbursement agreement.
After the funding cut-off, Pontiac General Hospital announced it would lay off more than 240 employees, CBS NEWS reported.
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By GlobalDataThe layoffs were described in a WARN notice as a result of the hospital’s non-compliance with Medicare’s conditions, which led to the termination of the agreement with the Secretary of Health and Human Services.
The hospital’s Medicare funding ended on 24 November, but it will remain in effect for a maximum of 30 days for patients who were admitted before that date.
Despite the financial challenges and layoffs, the hospital communicated to the Michigan Department of Labor and Economic Opportunity that the loss of funding was unexpected.
The hospital expressed hope that the layoffs would not be permanent.
They are scheduled to occur in two phases, with the first affecting approximately 186 workers beginning 29 November.
The second phase will impact an additional 62 employees between 6 and 20 December.
