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Hazel Hawkins Hospital gets bankruptcy filing dismissed by a federal judge

HOLLISTER, Calif. (KION-TV)- UPDATE ON MARCH 21, 2024 AT 6:34 PM- A U.S. Bankruptcy Court judge in San Jose has denied Hazel Hawkins Hospital's bankruptcy filing on Thursday night.

In court documents that were sent to KION, Judge Stephen L. Johnson said that the San Benito Health Care District did not prove the hospital's financial situation was insolvent and unable to pay their debt.

Johnson said the district was in a "dire financial situation," by late 2022 but saw the health care district's cash flow improved to pay their debts.

The court documents showed that a financial forecast by B. Riley which is a financial consulted contracted by the hospital was flawed.

B. Riley's forecast predicted the district would run out of cash by the end of this year but Johnson said the court found the figures used y the firm were different than what the health care's monthly financial reports showed.

Marcus Young who is the spokesperson for Hazel Hopkins Hospital sent out a statement on the decision and how it will impact them going forward.

"The ruling acknowledged that “the District has faced an enormous financial challenge in the past several years” and that “the Board of Directors, officers, and staff responded to that challenge with innovative solutions and a sense of resilience.” The court’s conclusion that the District is not insolvent should be seen as a reflection of the District’s concerted effort to ensure that its hospital can continue to serve the San Benito County community in the future."

Hazel Hawkins said in a statement

Young also went on to add that hospital administrators are working with legal and financial advisors to analyze the procedural and financial impacts of the ruling. 

Young also said they are not out of their financial crisis yet.

The California Nurses Association also sent out a statement saying they feel vindicated since they opposed the bankruptcy filing from the start.

"We knew from day one that this claim of bankruptcy was bogus and intended to bust the unions and scare the community. We feel vindicated that the court was not persuaded by the false claims and distortions presented by the district during this bankruptcy case."

Diane Beck who is a registered nurse at Hazel Hawkins Hospital.

The hospital has received four letters of intent from different health agencies including a proposed Joint Powers Authority from San Benito County.

The San Benito Health Care District originally gave a deadline of April 2nd for any party who is interested in submitting a letter of intent to purchase the hospital.

However, Young told KION that that deadline is most likely to be extended for parties to review their financial projections.

To see the full court document, click here.

To see our latest coverage of Hazel Hawkins, click here.

Hazel Hawkins Hospital to end home health services at the end of January

UPDATE Jan. 7, 2023, at 10:17 a.m.- The San Benito Health Care District Board voted Friday to close the District's Home Health Care department at Hazel Hawkins Memorial Hospital starting Jan. 31, 2023.

“This was a difficult decision to make,” stated Mary Casillas, HHMH Interim CEO.  “However, with consistently declining volumes, it was a sound business decision.  There are duplicate services within our community that will be able to provide the needed home health care services to our patients.”

Beginning immediately, the SBHCDB will stop accepting new patient referrals. Current patients will be seen until the month's end and given key referral partners.

The hospital says this closure will affect 16 employees.

Hazel Hawkins Hospital agrees on new contract with Anthem Blue Cross

UPDATE Dec. 28, 2022, at 4:30 p.m.- Hazel Hawkins Memorial Hospital and Anthem Blue Cross announced Wednesday a new contract that will take effect at the start of the New Year.

This new agreement allows Anthem-insured patients to maintain in-network access to hospital services, facilities and providers.

“This is a win for our patients and community, who deserve access to high-quality local care. We appreciate the understanding and support we received from our patients, physicians, and local employers,” said Mary Casillas, HHMH Interim CEO.  “It is important that we continue to meet the needs of our community, and this new contract will allow us to do just that.”

CAre from Hazel Hawkins and clinics are covered for Anthem members as part of their in-network benefits.

Any further questions can be answered by staff at (831)-205-5710.

San Benito County Board of supervisors denies $10 million loan to help Hazel Hawkins Hospital

UPDATE Dec. 16, 2022, at 1:52 p.m.- The San Benito County Board of Supervisors voted against Hazel Hawkins Hospital's request for a $10 million loan to help get them after they declared bankruptcy in November.

The $10 million would have come from the county's nearly 25 million in "rainy day funds." The money would have been used "to implement a restructuring plan in lieu of bankruptcy or reduction in services," said a spokesperson for Hazel Hawkins Hospital.

The silver lining is that the board did approve Hazel Hawkins' request for $1,100,000 in property taxes that would have been owed to them in April 2023. This is in addition to the $1,100,000 the hospital will get for December property tax disbursal, per Hazel Hawkins.

“We are thankful that the County decided to advance property tax funds, and we hope they will reconsider bridge funding for the health and safety of our community,” said interim CEO Mary Casillas.

Now Hazel Hawkins focuses on costs cutting measures to remain operational while searching for a long-term restructuring plan. The hospital plans to freeze some open positions and review their staff needs, and some employees will take voluntary wage cuts.

Other plans are to find cheaper supplies and conduct audits in the billing department to maximize the hospital's income.

The hospital still plans to speak with the City of Hollister to find additional funding. The hospital has also asked the California State Treasurer’s California Health Facilities Financing Authority for a $3 million bridge loan.

“This is a new day at Hazel Hawkins, and we are looking at everything,” said Casillas. “We are making process improvements and improving efficiency throughout the hospital, but we also need community support to save the hospital.”

Hazel Hawkins Hospital authorizes bankruptcy filing

Hazel Hawkins Hospital confirmed to KION that the San Benito Health Care District Board of Directors approved a resolution to declare a fiscal emergency.

The district overseeing the hospital declared a Chapter 9 bankruptcy petition during a special meeting on November 4.

The district said that a bankruptcy filing would allow the healthcare district to restructure its finances.

District officials said that record inflation, diminishing reimbursements, and COVID-19 recovery.

The hospital said they are in active negotiations with the district's creditors. They are not expecting to cut services or staff members for the time being.

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Derrick Ow

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