GALESBURG — Knox Clinic Corporation in Galesburg will file for Chapter 11 bankruptcy, in accordance to a letter employees Tuesday afternoon.
The clinics at 834 N Seminary St. are connected to Galesburg Cottage Healthcare facility, which lost its accreditation and was notified in December about losing Medicare and Medicaid payments.
A letter from Cottage Hospital CEO Sanjay Sharma advised workers the clinics, not the healthcare facility, will file for Chapter 11 personal bankruptcy, which will enable it to reorganize and preserve expert services.
“It has become important, considering modern developments, for clinics (not the medical center) to file for Chapter 11 bankruptcy. What this will enable us to do is reorganize the clinics and emerge safely to protect the services we can,” the letter from Sharma stated.
“The program is to continue on to function the clinics in the course of personal bankruptcy. We intend to arrive out of this method stronger and extra sustainable for the extended phrase. I will continue on to update you as selections development. All these improvements have had to be make faster than in an best scenario, but I know we can keep on to operate collectively and be on the other facet of this a extra sustainable organization,” Sharma’s letter to staff concluded.
A chapter 11 individual bankruptcy normally presents for reorganization, usually involving a corporation or partnership. A chapter 11 debtor normally proposes a program of reorganization to preserve its company alive and pay back collectors in excess of time. People in business enterprise or people today can also search for reduction in chapter 11.
On Wednesday early morning, Courtney Bibo, Cottage Hospital director of local community and employees relations, experienced no comment about the personal bankruptcy or the clinic shedding Medicare and Medicaid payments.
Inside of 30 minutes, Bibo sent an e mail confirming the individual bankruptcy.
“The clinic has submitted chapter 11 individual bankruptcy to reorganize to assure its viability in the medium and extended term,” the release aid. “The clinic is not included in this individual bankruptcy.”
In the release, Bibo mentioned “The Clinic Corporation intends to continue on to run all over the course of action and arise with a much more sustainable model.”
News of the medical center losing accreditation and Medicare and Medicaid payments broke Dec. 28. Given that that time neither Sharma nor Bibo have responded to concerns from the media about what shedding individuals payments suggest for the healthcare facility. Medicare and Medicaid payments represented 72% of the hospital’s internet inpatient and outpatient profits in 2020. Payments for Medicare and Medicaid people at Cottage Medical center will carry on for sufferers admitted before Jan. 15.
This short article at first appeared on Galesburg Sign-up-Mail: Galesburg Cottage clinic to file for individual bankruptcy intends to remain open by way of the approach