Jackson Hospital is seen in Montgomery, Alabama on Aug. 17, 2026. Officials with the hospital, which declared bankruptcy in 2025, and Blue Cross Blue Shield of Alabama announced an agreement Monday to keep the hospital open. (Anna Barrett/Alabama Reflector)
A troubled Montgomery hospital and the state’s largest private health insurance company reached a four-year deal Monday to keep the hospital open after years of financial woes.
The deal between Jackson Hospital and Blue Cross and Blue Shield of Alabama is contingent on the hospital emerging out of bankruptcy, said John Quinlivan, Jackson Hospital’s president and CEO, at a press conference announcing the deal on Monday afternoon. Jackson Hospital filed for bankruptcy in 2025 and has struggled financially for years.
“The agreement does not give us everything we felt we needed, but combined with the continued support of Blue Cross Blue Shield of Alabama, Jackson Investment Group, the city of Montgomery, Montgomery County and the state of Alabama, it enables us to execute our strategic plan,” Quinlivan said.
In a statement Monday afternoon, BCBSAL spokesperson Sophie Martin said the company’s focus “has remained on supporting our members and the community.”
“We appreciate the efforts of all parties involved in reaching this outcome and look forward to continuing our partnership in support of the health and well-being of our customers, the River Region and Alabamians,” the statement said.
Hospitals across Alabama are closing due to financial struggles. State charity programs and federal tax programs aim to prevent closures, but experts say it may not be enough to save hospitals.
Quinlivan demanded BCBSAL increase what it pays the hospital for patient services to that of Baptist Medical Center South, a Level I trauma center in southern Montgomery that has 492 beds. Jackson, located near downtown Montgomery, is a Level III trauma center that has 344 beds. BCBSAL did not agree to that demand due to the differing care the hospitals offer.
The deal between the two companies will allow the hospital to improve current services and add new ones, but Quinlivan did not say what services would be added. Those services will allow the hospital to generate more revenue, but it will have to depend on aid from local and state governments and BCBSAL for grants to stay afloat for now, he said.
“We shouldn’t have to depend on governments for grants, but in the short-term we will. We have over 150 million dollars worth of infrastructure needs,” he said. “Eventually, we will be able to sustain ourselves and to reinvest in the facility, but in the short term, we’re going to need continued government support to do those things that we’re going to have to do.”
The hospital reached a “verbal agreement” with the insurance company in early July, which Quinlivan said the signed agreement was based on. He did not share details of the agreement, but said the reimbursement “rates are significantly better.”
“They’re not everything that we had asked for, and not everything we felt we needed, but they are materially better,” he said. “They certainly put us in a position where we ought to be able to do the right things here and save this hospital.”
Gov. Kay Ivey earlier this year pledged a $40 million grant to the hospital, contingent on the hospital coming out of bankruptcy. Quinlivan said the hospital has filed the necessary paperwork in U.S. Bankruptcy Court.
In a statement Monday, Ivey noted that Jackson Hospital was near its 80th birthday and said the agreement meant it was “reborn today stronger and ever more committed to delivering the most trusted medical care to the Capital City and River Region.”
“Jackson Hospital’s agreement to emerge from bankruptcy and keep its doors open to offer a wide range of care, including emergency services, is the direct result of a resolute partnership between state and local officials and hospital leadership,” Ivey said in a statement Monday afternoon.
The hospital has also received $10 million from Montgomery County and $15 million from Montgomery city. Jackson Healthcare, founded by Georgia Republican gubernatorial nominee Rick Jackson, has also loaned the hospital $35 million.
Messages seeking comment with Montgomery Mayor Steven Reed and the Montgomery County Commission were left Monday afternoon.
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Author: Anna Barrett