Cash-strapped California hospital's mediation ends with critical issues unresolved

Hollister, Calif.-based Hazel Hawkins Memorial Hospital, along with the San Benito Health Care District, said a confidential stakeholder mediation process it entered with stakeholders in February has concluded, but the results "failed to resolve several critical issues" affecting the cash-strapped hospital. 

The hospital's board on Nov. 4 passed a resolution declaring a fiscal emergency, which granted administrators the authority to file Chapter 9 bankruptcy if and when necessary. Hospital officials have attributed its financial troubles to several factors, including high inflation, reduced reimbursement from Medicare and Anthem Blue Cross, as well as the lingering effects from the COVID-19 pandemic. 

Hazel Hawkins' interim CEO, Mary Casillas, said in an April 19 hospital news release that leadership will continue to meet with interested parties. She is hopeful the meetings will result in "stabilizing our finances and provide solutions that will better help us reach our goals of maintaining access to quality healthcare for the residents of San Benito County."

Hospital officials are continuing to search for a potential transaction partner, and 10 organizations have indicated interest, according to the release. 

With the conclusion of the confidential mediation process, the district launched a website to provide public access to financial information and other disclosures.

Ms. Casillas said March 9 that the hospital has enough funds to operate through late summer. On March 21, the hospital announced it was withdrawing its Worker Adjustment and Retraining Notification Act notice — first issued in December — after the hospital improved its financial situation. 

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