North Star Health Alliance Inc. filed for Chapter 11 voluntary bankruptcy on Tuesday, claiming total liabilities in excess of $100 million across its three operating affiliates. According to documents filed in U.S. Bankruptcy Court for the Northern District of New York, Claxton-Hepburn Medical Center and Carthage Area Hospital each have liabilities between $50 million and $100 million, while Meadowbrook Terrace has liabilities between $1 million and $10 million, and North Star Health Alliance Inc. itself discloses liabilities between $500,000 and $1 million. All three hospitals—Claxton-Hepburn, Carthage, and Meadowbrook—remain open and operating.
North Star attributed the Chapter 11 filing to “a number of complex events, which generated a gap between the cost of services rendered and revenue received.” The organization cited delays in payments while transitioning to a critical access hospital reimbursement model, increased operating expenses, a challenging legacy model of revenue collection at Claxton-Hepburn Medical Center, and “multiple cyber attacks” as contributing factors. The filing came after the January 26 resignation of CEO Richard Duvall, which followed the cutting of 120 jobs from the two North Country hospitals. The organization had also struggled to make payroll for weeks due to suspended payments from New York’s Vital Access Provider Assurance Program.
North Star stated that the Chapter 11 process “will stabilize NSHA’s finances which is necessary to ensure access to quality care for communities throughout the North Country, including Fort Drum service members, families, and retirees.” The organization promised that “Patients and their families can expect normal operations, access to appointments, and continuity of all essential medical, surgical, behavioral health, and assisted living services.” Employees are expected to continue receiving regular pay and benefits throughout the process.
The New York State Department of Health confirmed it has been working with NSHA to maintain operations, noting that “The Department has assisted with payroll and remains committed to protecting patients and preserving access to care throughout this process.” The department is working on creating an agreement between the three hospitals, NSHA, a temporary operator, and itself. Assemblyman Scott A. Gray called for immediate state action, urging the DOH to “Finalize the management services agreement, deploy a team to the facilities immediately and provide a clear written timeline for decisions tied to safety-net funding and operational stabilization.”
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.nny360.com/top_stories/north-star-health-alliance-and-three-affiliates-file-for-bankruptcy/article_61a1e5f0-86c0-5e3d-84e5-6634bbf7a33d.html