Aug. 30 (Bloomberg) -- Jefferson County, Alabama, which last year filed the biggest U.S. municipal bankruptcy, is fighting to close the emergency room of its money-losing hospital for the poor.
The county today asked U.S. Bankruptcy Judge Thomas B. Bennett to halt a lawsuit by the city of Birmingham, which seeks to keep the emergency room open after Dec. 1, the day the county plans to end in-patient care at Cooper Green Mercy Hospital.
Bennett indicated at today’s hearing that he may halt the case when he issues a written ruling. He told lawyers for the city that, “What I’m looking at is really an action to try to control the operations” of the county, which isn’t allowed under Chapter 9 of the U.S. Bankruptcy Code.
The fight is the first time the county’s health-care responsibilities have been part of its bankruptcy case. Most of the focus up to now has been on cutting bond debt tied to the county’s sewer system and replacing a wage tax that brought in more than $60 million a year before it was voided by a state court.
As health-care costs have risen, states have begun spending more on health care for the poor than on primary-school education, when all funds, including federal funds, are considered, according to a report by the State Budget Crisis Task Force cited by Bloomberg BNA, a division of Bloomberg that tracks tax developments.
Alabama, like most states, requires counties to provide health care for the poor. Jefferson County will continue to meet the state’s requirements, though not through Cooper Green’s emergency room, Patrick Darby, an attorney for the county, said in court today.
Birmingham sued the county in state court to try to keep the hospital open. The case was temporarily put on hold until Bennett decides whether to bar it while the county remains under bankruptcy court protection.
The case is In re Jefferson County, 11-05736, U.S. Bankruptcy Court, Northern District of Alabama (Birmingham).
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