GREENWOOD, Miss.—Greenwood Leflore Hospital in Greenwood, Mississippi, filed for bankruptcy on Wednesday in its latest attempt to stave off closure. The filing comes after several turbulent days for the struggling hospital, which in the last week has laid off 86 employees, shuttered four services and warned employees of the potential closure of the entire hospital on June 15.
“GLH has no available source of funding to permit operations to continue for a reasonably predictable period of time, and both the City of Greenwood and Leflore County have neither the means nor the desire to allocate more funding when doing so provides no certainty of long-term viability for GLH,” the bankruptcy petition said. “Implementing a plan of arrangement and obtaining temporary relief under Chapter 9 presents the best available alternative to reach the best outcome under these circumstances.”
The bankruptcy filing, which the Greenwood Commonwealth first reported on Wednesday, is for Chapter 9 bankruptcy, reserved for public entities. GLH—publicly owned by the City of Greenwood and Leflore County—will be able to address its debts without the threat of liquidation. The Mississippi Legislature passed Senate Bill 3230 this year, permitting GLH to make the move, and Gov. Tate Reeves allowed the measure to become law without his signature.
Last year, the Mississippi Division of Medicaid began clawing back millions of dollars in Medicaid overpayments made to GLH in 2024 following a recalculation of the hospital’s patient volumes that year. So far, the agency has taken back a little over $2 million. That figure would be higher, but the hospital successfully petitioned Hinds County Chancery Court for a pause in payments, warning that it would close if a stay was not approved.
The bankruptcy filing requires the hospital to list its 20 largest creditors. The hospital’s largest single liability is its pension plan, worth $11 million, followed by $4.8 million owed to the Mississippi Division of Medicaid.
GLH confirms in its bankruptcy petition that it is negotiating with the University of Mississippi Medical Center for some sort of potential takeover, though the petition does not detail the extent of those negotiations. The hospital issued a statement to the Mississippi Free Press, saying that UMMC is aware of the bankruptcy filing and it is not expected to affect negotiations. GLH and UMMC have negotiated twice in the past, both times coming away with no deal.
GLH’s bankruptcy petition details the years of financial challenges it has been facing. Severe issues began with the COVID-19 pandemic, where the hospital expanded its ICU services to meet increased patient volume, draining its cash reserves in the process. The Centers for Medicare and Medicaid Services issued the hospital Medicare Advance Payments—Medicare loans for money the hospital would receive in the future—only to call in those loans and force the hospital to begin repayments in 2022.
The hospital took action in an attempt to reverse its financial course. It shuttered its labor and delivery unit, sold unused assets and received $11.4 million in cash, utility forgiveness and a $10 million line of credit approved by Leflore County and the City of Greenwood, of which it claimed $7.5 million. In 2025, GLH reached more stable ground after it was approved to join the Rural Community Hospital Demonstration program, a designation that cost-protects Medicare services, increased its bed count from 25 to 50 and introduced a swing bed unit.
In the summer of 2025, the Mississippi Division of Medicaid began clawing back Medicaid overpayments. The bankruptcy petition says GLH is “insolvent” and unable to pay its debts. GLH has only remained viable “due to extraordinary, one-time infusions of cash.”
Greenwood Leflore Hospital serves Leflore County and other adjacent areas. Around 75% of the county’s population is Black. Should GLH close, the nearest hospital is 33 miles away at the UMMC campus in Grenada.
Local and state advocates have argued Medicaid expansion could have assisted GLH and other struggling rural hospitals years ago. The Mississippi Legislature came close to expansion two years ago, but couldn’t come to an agreement on work requirements. Any possibility of Medicaid expansion is now considered dead by the Mississippi Legislature due to cuts made in President Donald Trump’s Big Beautiful Bill.
