Arizona's largest health system agreed to an $87 million deal for Casa Grande (Ariz.) Regional Medical Center, which filed for Chapter 11 bankruptcy Feb. 4.
Banner Health, which owns and operates two dozen hospitals in seven states, would acquire Casa Grande Regional's assets and certain liabilities, the distressed hospital's court records show. The deal must be approved by the court.
The deal follows failed efforts by Casa Grande to raise cash, refinance its debt and one prior attempt at a “strategic partnership” with a for-profit chain, the bankruptcy court records show.
Casa Grande Regional cited a cut to Arizona's Medicaid reimbursement and eligibility as one reason for the hospital's bankruptcy, including the state's 2011 decision to halt Medicaid enrollment for childless adults. Medicaid accounts for roughly 21% of the hospital's revenue. The policy changes cut the hospital's revenue by $11 million from 2011 to 2013, court records said.