Montebello, Calif.-based Beverly Hospital has filed for Chapter 11 bankruptcy as it hopes to pursue a buyer and avoid closure, the Los Angeles Times reported April 20.
The hospital has secured $13 million in financing to keep operating as it searches for a buyer. Hospital officials said rising costs outpacing government reimbursement rates were to blame for the situation.
More than 90 percent of Beverly's patients rely on government programs such as Medi-Cal and Medicare. Dealing with the COVID-19 pandemic and the rising cost of labor left the hospital in the red since 2020.
Beverly has unsuccessfully attempted to merge with three systems. Hospital officials blamed the failed mergers on the review process by the California attorney general, according to the Times.
The news comes as California lawmakers debate a measure that would provide loans to financially distressed hospitals.