A federal bankruptcy judge denied Jackson Hospital’s emergency request to force Blue Cross and Blue Shield of Alabama to raise reimbursement rates, ruling the Montgomery hospital failed to meet the legal burden for a preliminary injunction.

U.S. Bankruptcy Judge Christopher Hawkins issued the 14-page ruling late Wednesday, finding that BCBS provided rational explanations for the difference between what it pays Jackson and what it pays nearby Baptist Medical Center South. The judge also noted that BCBS revisited its 2026 rates and increased them by 10% over previously agreed-upon terms, undercutting Jackson’s argument that the insurer refused to negotiate in good faith.

Hawkins went further, rejecting the premise of what Jackson was asking the court to do.

“The mechanism the Hospital seeks to employ, a preliminary injunction pursuant to which a Court rewrites a contract and imposes terms of performance on a party that it did not agree to, is antithetical to the public interest,” Hawkins wrote.

The judge also disputed Jackson’s central claim that the hospital will be forced to close without the court’s intervention. “The Hospital has not established that it will suffer irreparable injury if the Court does not unilaterally increase reimbursement rates under the Provider Agreements,” Hawkins wrote. “To the contrary, the evidence conclusively belies the Hospital’s allegation that it cannot emerge from bankruptcy, will lose funding from the State of Alabama, and will be forced to close.”

Jackson Hospital’s board has set June 25 as its deadline. The hospital has said that without higher rates, either through negotiation or court order, it will announce its closure. With the court path now closed, the hospital must reach a deal directly with BCBS or find another way to stabilize its finances in the next week.

Blue Cross issued a statement following the ruling. “This decision supports our responsibility to protect our customers, the nearly two million members here in Alabama who depend on us for access to high-quality, affordable healthcare,” the insurer said. “That said, we very much want Jackson Hospital to remain open and continue providing care to patients, and we remain hopeful that a solution can be found.”

Sawyer Knowles is a state and political reporter for Yellowhammer News. You may contact him at [email protected].