Knox Clinics Corp., connected to Galesburg Cottage Hospital, is submitting for Chapter 11 personal bankruptcy.

GALESBURG — Knox Clinic Company in Galesburg will file for Chapter 11 personal bankruptcy, in accordance to a letter workforce Tuesday afternoon.

The clinics at 834 N Seminary St. are related to Galesburg Cottage Clinic, which shed its accreditation and was notified in December about shedding Medicare and Medicaid payments.

A lot more: What is actually following for Cottage Healthcare facility? Can the longtime healthcare facility stay open without Medicare, Medicaid funding?

A letter from Cottage Hospital CEO Sanjay Sharma told staff members the clinics, not the healthcare facility, will file for Chapter 11 personal bankruptcy, which will allow it to reorganize and maintain expert services.

“It has grow to be needed, considering latest developments, for clinics (not the hospital) to file for Chapter 11 bankruptcy. What this will allow us to do is reorganize the clinics and arise properly to protect the solutions we can,” the letter from Sharma reported.

“The plan is to carry on to run the clinics for the duration of bankruptcy. We intend to appear out of this approach stronger and far more sustainable for the long phrase. I will proceed to update you as decisions development. All these adjustments have experienced to be make quicker than in an best circumstance, but I know we can continue on to operate jointly and be on the other facet of this a a lot more sustainable firm,” Sharma’s letter to employees concluded.

A chapter 11 bankruptcy typically presents for reorganization, normally involving a corporation or partnership. A chapter 11 debtor commonly proposes a strategy of reorganization to preserve its small business alive and pay back creditors above time. Men and women in organization or people can also search for relief in chapter 11.

Extra: Galesburg’s Cottage Medical center ‘poses rapid risk’ to individuals, regulatory agency claims

On Wednesday early morning, Courtney Bibo, Cottage Clinic director of neighborhood and staff members relations, experienced no remark about the bankruptcy or the clinic losing Medicare and Medicaid payments.

Inside of 30 minutes, Bibo despatched an e-mail confirming the individual bankruptcy.

“The clinic has filed chapter 11 individual bankruptcy to reorganize to make sure its viability in the medium and extensive expression,” the release help. “The healthcare facility is not provided in this individual bankruptcy.”

In the launch, Bibo explained “The Clinic Corporation intends to proceed to function all through the system and emerge with a more sustainable design.”

Far more: OSF adds two Galesburg pediatricians formerly with methods at Cottage

News of the clinic dropping accreditation and Medicare and Medicaid payments broke Dec. 28. Because that time neither Sharma nor Bibo have responded to queries from the media about what shedding all those payments mean for the hospital. Medicare and Medicaid payments represented 72% of the hospital’s web inpatient and outpatient revenue in 2020. Payments for Medicare and Medicaid patients at Cottage Hospital will carry on for clients admitted right before Jan. 15.

This posting at first appeared on Galesburg Sign up-Mail: Galesburg Cottage clinic to file for bankruptcy intends to stay open by way of the system