Jackson Hospital is staying open.

The Montgomery hospital’s board of directors on Friday announced a “path forward” for the hospital to remain open following a verbal agreement with Blue Cross and Blue Shield of Alabama — ending a standoff that brought the capital city’s second-largest hospital within hours of announcing its own closure just one week ago.

“Our Board of Directors has announced a path forward for the hospital to remain open following a verbal agreement with Blue Cross and Blue Shield of Alabama,” the hospital said in a statement provided to Yellowhammer News. “More details will be shared soon. Today is about our employees and their unwavering commitment to this community.”

Blue Cross confirmed the outcome in its own statement, saying the insurer is “pleased Jackson Hospital will remain open and continue serving the Montgomery community and River Region.”

“Blue Cross has worked with hospital leadership and other stakeholders to keep their doors open and provide patients access to the care they need,” the insurer said. “Throughout this process, our focus has remained on supporting our members and the community. We appreciate the efforts of all parties involved in reaching this outcome and look forward to continuing our partnership in support of the health and well-being of our customers, the River Region and Alabamians.”

The stakes of Friday’s handshake go beyond keeping the lights on. Jackson’s reorganization plan was confirmed by the bankruptcy court on April 28 — but the hospital could not actually emerge from Chapter 11, and could not touch the up to $40 million Gov. Kay Ivey and the state’s bonding authority have pledged upon emergence, until it satisfied the plan’s conditions. At Tuesday’s status hearing, hospital bankruptcy counsel Derek Meek told the court that a new Blue Cross rate agreement was the sole condition still standing between the hospital and emergence.

Friday’s announcement, in other words, is the keystone sliding into place: once the verbal agreement is papered and presented to U.S. Bankruptcy Judge Christopher Hawkins, the path runs straight from rate deal to emergence to the state’s $40 million.

Neither side disclosed terms Friday, and the operative phrase is “verbal agreement” — the deal is made, not yet papered. There are no rate figures, no contract length, and no word on whether the agreement resolves the hospital’s pending lawsuit accusing Blue Cross of systematically underpaying Jackson relative to Baptist Medical Center South across town. The docket will tell the rest: Jackson’s response to Blue Cross’s motion to dismiss that suit is currently due July 14 — a joint request to pause that briefing would be the settlement taking shape in a court filing — and Hawkins has set the next status hearing for July 27 at 10 a.m., the natural venue to put the agreement on the record unless the parties seek an earlier setting.

The announcement caps a standoff that repeatedly appeared headed for a shutdown. Jackson entered Chapter 11 in February 2025, citing rising labor costs, stagnant reimbursement and an uninsured-care burden that topped $45 million in gross charges in 2023 alone, and has operated since on a $25 million debtor-in-possession loan from Jackson Investment Group, the Georgia-based parent of Jackson Healthcare. Its position hardened this spring into a single demand: reimbursement parity with Baptist South — which Blue Cross, noting Baptist’s Level I trauma designation against Jackson’s Level III and that the insurer accounts for less than 20 percent of the hospital’s revenue, refused.

The courtroom route closed June 17, when Hawkins denied the hospital’s emergency bid to force parity, crediting Blue Cross’s justifications for the rate gap and noting the insurer had already raised Jackson’s 2026 rates 10 percent. Out of legal options and nearly out of cash, the board set a hard line: a deal by June 25, or a closure announcement, with wind-down procedures beginning July 1.

The deadline passed without an agreement, and a closure press conference was on the calendar for the next afternoon. Then, at roughly 9 p.m. that night, Blue Cross delivered a new proposal — a development disclosed by Montgomery County Commission Chairman Doug Singleton, who told WSFA at the time that “normally if you got a counteroffer it’s going to be a little bit better every time.” The press conference was postponed indefinitely, and by Tuesday’s hearing Meek was describing negotiations moving so fast that participants were watching their phones as the proceeding unfolded — even as he cautioned that the hospital’s cash position left no margin for delay.

Government partners had already built their side of the rescue. Beyond the state’s $40 million pledge, the City of Montgomery has disbursed $15 million against a $22.5 million funding agreement, and the Montgomery County Commission committed $10 million. Mayor Steven Reed has said the city spent weeks convening hospital leadership, healthcare providers, state and county officials and business leaders around the crisis. The Blue Cross agreement was the last — and largest — piece.

Jackson Hospital is licensed for 344 beds, employs roughly 1,800 people and treats about 71,000 patients a year. It is the only acute-care hospital near downtown Montgomery and the Capitol complex, and it opened in 1946 with 37 beds and five doctors — and as of Friday, its ninth decade serving the River Region is no longer in doubt.

The papers still have to be drafted, the terms still have to surface, and Hawkins still has to bless it. But for the first time since February 2025, the question in Montgomery is no longer whether Jackson Hospital survives — it’s what the rescue cost. And Friday, nobody at the table was counting. As the hospital put it: today is about the employees.