The Labor, Health & Social Services Committee approved a bill to allow memorial hospitals — and, by amendment, hospital districts — to seek reorganization under Chapter 9 of the United States Bankruptcy Code, subject to local approval.

LSO described the draft as permitting hospital trustees to file under Chapter 9 and requiring county commission approval of both the bankruptcy petition and an initial plan for adjustment of debts. Eric Bully of the Wyoming Hospital Association said the measure is intended to provide an additional tool to preserve services and restructure debt for facilities that otherwise would face closure.

Why it matters: Testimony stressed that several rural hospitals in Wyoming face acute financial strain and that existing statute did not permit public memorial hospitals or hospital districts the same Chapter 9 option available to privately owned hospitals. Committee members said the change would level the legal playing field and could give troubled hospitals a path to repay creditors while remaining open.

Testimony and data: The hospital association testified that Wyoming’s network is financially fragile: a recent review found only a handful of hospitals in positive operating positions while many were operating with low days‑cash‑on‑hand and some were at immediate‑risk levels. Witnesses said cash‑flow shocks — for example, delayed federal payments during a lapse in appropriations — can quickly endanger operations when a hospital has single‑digit days of cash on hand.

Amendments and outcome: Committee adopted an amendment to add hospital districts to the statute so those public entities would have the same Chapter 9 option. After that amendment the committee voted to pass the bill; recorded roll call showed the bill passed the committee.

Ending: Proponents described the measure as a narrowly tailored statutory tool to allow trustees and district boards, with county oversight, to pursue Chapter 9 reorganization rather than immediate liquidation. The bill moves forward with committee approval and an amendment extending the authority to hospital districts.