Green Valley (Ariz.) Hospital is filing for Chapter 11 bankruptcy less than two years after it opened.
Green Valley CEO John Matuska told the Arizona Daily Star the 49-bed for-profit hospital is filing for bankruptcy to strengthen its financials. "This is merely a procedural step, and to be sustainable we have to take this step to reorganize our finances and alleviate some of our debt burden," he said.
The hospital will operate as normal during the bankruptcy process and no layoffs are expected, according to the report.
Green Valley Hospital's financial troubles stem from several sources, including loans with high fees and interest rates it cannot afford and an annual $600,000 levy to fund Medicaid expansion in Arizona. State officials intended for the expanded Medicaid program to lower hospitals' bad debt levels, which would partially offset the assessment on hospitals. However, less than 10 percent of Green Valley Hospital's patients are on Medicaid, making the fee a financial burden, according to the report.
Mr. Matuska, who has served as CEO of Green Valley since October, expects the bankruptcy process to take about six months.
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