Hazel Hawkins clears Chapter 9 bankruptcy filing
five months later Hazel Hawkins Memorial Hospital CEO Steve Hannah has announced plans for a new $250 million the hospital, and only 25 days after being terminatedThe San Benito Health District Board of Directors announced a tax emergency and authorized the filing of a Chapter 9 bankruptcy petition.
Under Section 32104 of the California Health and Safety Code, the board declared that the district would not be able to pay its obligations within the next 60 days and determined that it was in the best interest of the district, to its patients, creditors, citizens, taxpayers and employees to file the petition.
The board voted unanimously to give notice that the district has declared a fiscal emergency and passed a resolution declaring that the hospital’s financial condition jeopardizes the health, safety or welfare of area residents. service of the district, absent the protections of Chapter 9, Title 11, of the United States Bankruptcy Code.
The board has determined that the district is insolvent based on cash flow in the current fiscal year and will also be insolvent in the following fiscal year.
He has delegated authority to Chief Financial Officer Mark Robinson to execute and file the Chapter 9 petition in the US Bankruptcy Court for the Northern District of California by December 31 and to continue negotiations with creditors. Robinson told the board that Medicare determined the hospital had overpaid $5.2 million and would have to repay it over the next year. Medicare also told the hospital it would cut payments for inpatient and outpatient care by an additional $5.2 million.
According to the meeting’s agenda file, “Despite efforts over the past few years by management and the District Board of Directors to take significant steps to reduce expenses, runaway inflationary increases combined with Reimbursement declines have created an operating and cash flow deficit that threatens the district’s financial viability and, if allowed to continue, could threaten patient care and safety.
On October 21, BenitoLink filed a public record request with the hospital requesting specific financial information and possible bankruptcy. According to their website, Hazel Hawkins Memorial Hospital has approximately 578 employees and 136 physicians.
Under California law, the district was required to give 48 hours notice to the public and the media before a special meeting. According to Frankie Gallagher, director of marketing and community relations, the notice was posted on the hospital’s website at 3:30 p.m. on Nov. 3, just 24 hours before the meeting. Several people in the room who spoke to the board said they only heard about the meeting the day before. Some said they were stunned to learn of the bankruptcy, given millions of dollars spent on recent renovations, a new building across town to relocate services and plans for a new hospital.