Faith Community Health System in Jacksboro, Texas has filed for bankruptcy for the second time in 2020. The single-hospital system northwest of Fort Worth refiled just three weeks after their previous case was dismissed. The system’s largest creditor is Richardson-based Blue Cross Blue Shield of Texas, which is owed more than $29 million.
According to bankruptcy documents, the health system first filed in February for Chapter 9 after an arbitration ruled in favor of Blue Cross. Chapter 9 protects municipalities while a repayment plan is negotiated. Then the pandemic hit.
In May, the health system requested that the filing be removed because the organization wanted to apply for a Paycheck Protection Program loan from the federal government, but organizations going through bankruptcies are not eligible. The court granted the request, the health system applied for the loan, and then on June 11 refiled for bankruptcy.
Blue Cross Blue Shield of Texas is involved in a number of disputes with rural healthcare facilities, with accusations of nonpayment, fraudulent billing, and other misdeeds coming from both sides. It was recently ordered to pay $108 million to a central Texas healthcare system, and is currently awaiting arbitration with Knox County Hospital District in North Texas.