GARDNER — Heywood Healthcare, which for months has been navigating changes to leadership and services, has filed for Chapter 11 bankruptcy protection, according to a press release issued Monday morning.

A costly and lengthy electronic medical record transition, aging infrastructure and ongoing construction were cited as the reasons for this decision, according to the announcement. Shortages in the workforce and supply chain challenges — which have affected hospitals nationwide — were also listed as being behind Heywood’s filing for bankruptcy protection. Heywood Healthcare is comprised of Heywood Hospital, Athol Hospital and Heywood Medical Group.

The medical records transition, according to a follow-up statement, was “designed to provide all patients with one patient record and portal. Like other healthcare organizations who have experienced the same issue, the implementation did not go as planned. Heywood was unable to send out bills and collect on its receivables for a significant period of time due to the EMR issues.” 

“Access to quality health care in the Gardner and Athol areas remains our utmost priority. We are committed to our community, our patients, our medical staff and our employees,” Co-CEO Rozanna Penney said in the statement. “Core hospital services will continue to operate as usual. We are grateful for the support from our state leadership and for the open communication with our legislators and city leadership. In the days and weeks ahead, Heywood Healthcare will continue to provide exceptional patient-centered care and remain laser-focused on operational stability.”

Among the core services that will continue are emergency services, intensive care, maternal and newborn services, medical and surgical inpatient, among others.

According to the United States Courts website, filing for Chapter 11 is frequently referred to as a “reorganization” bankruptcy. Usually, the debtor remains “in possession,” has the powers and duties of a trustee,  may continue to operate its business, and may, with court approval, borrow new money. A plan of reorganization is proposed, creditors whose rights are affected may vote on the plan, and the plan may be confirmed by the court if it gets the required votes and satisfies certain legal requirements.

In a statement from Heywood Healthcare following the announcement, it is expected that the reorganization will take six to nine months to complete.

“At this point, we are not anticipating any material changes in staffing or service lines,” the statement read. “That said, we will be evaluating opportunities for service consolidation and cost-reduction opportunities, while maintaining patient access to needed services.”

In June, President and CEO Win Brown left Heywood Healthcare after 12 years in the role. Following this, a new structure was put in place, with the appointment two co-CEOs — CEO of Patient Care Services and Operations Rozanna Penney and CEO of Finance and Administration Tom Sullivan. This change was described as an “untraditional” leadership model.

In September, Heywood Hospital announced that Quartulli & Associates had suspended all therapeutic services, following a 90-day notice of contract termination.

The announcement mentioned that over the past few months, Heywood Healthcare has made progress with strong volume, responsible fiscal management, robust revenue cycle work and a dedicated workforce. However, low reimbursement rates contributed to a “challenging operational infrastructure.”

“Heywood Hospital has stood independently for 116 years, while navigating national and local challenges, which include Heywood being one of the lowest commercially reimbursed hospitals in the commonwealth,” Co-CEO Tom Sullivan said in the statement. “Athol Hospital has operated for 73 years, and remains a hallmark critical access hospital. Though our health system has stood the test of time, we are not impervious to financial challenges.”

Max Bowen can be reached at 413-930-4074 or at mbowen@recorder.com.