GARDNER – Heywood Healthcare, which operates hospitals in Gardner and Athol, has filed papers to exit Chapter 11 after entering it last October.

In a statement issued on May 29, the healthcare company said the filing allowed it to “address numerous historic contractual agreements swiftly, seek commercial rate enhancements, reorganize its finances, and focus on service optimization.” The filing was made on May 28. 

A costly electronic medical record transition, aging infrastructure and ongoing construction were cited as the reasons for the Chapter 11 filing, along with shortages in the workforce and supply chain challenges. Construction on a new pavilion has been paused, and a plan has been developed to deal with infrastructure issues, according to a statement from Heywood. 

“We continuously triage and address the aging infrastructure and capital needs essential for patient care,” the statement read. “This remains one of our many challenges.”

In April, the company held a forum where administration marked several areas of improvement since last October. Heywood’s President and CEO Rozanna Penney spoke on the fact that there had been no reduction in staff and new hires had been made, including a primary care physician, two family medical physicians and several advance practice providers at various offices.

Penney also cited a negotiation with commercial payers, which resulted in increased reimbursement and an improved revenue cycle, translating into $5 to $6 million in generated cash each month.

“As a result, we’re looking at our net expenses went down by 5% and our net revenue increased by 7%,” she said at the forum.

Heywood Healthcare has re-initiated its Doula Program to support maternal care and created a partnership with Woods Ambulance. Penney said that working with Woods Ambulance has helped over 100 patients to get to the hospital for non-emergency appointments.

“We want to be sure that people can get to their preventative appointments,” Penney said. “None of this would be possible if we were not a community hospital who partnered with our local partners, our local businesses, our local legislators.”

In addition, Heywood re-opened its inpatient mental health unit in January after being closed for two years and experienced growth in inpatient, surgical, and ambulatory volume, including a 16% increase in labor and delivery, according to the statement.

“Heywood Healthcare’s progress is attributed to its dedicated medical staff and employees, along with strong financial and operational prudence. We will proceed thoughtfully and planfully, maintain focus on patient care, and continue to forecast potential risks,” Penney said in Wednesday’s statement. “The board and leadership team extend our gratitude for the steadfast support of our federal, state, and local representatives, as well as our appreciation for the patients who continue to choose Heywood Healthcare.”

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