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House panel okays option for memorial hospitals, districts to use Chapter 9 reorganization
Summary
Senate File 5 passed the committee after sponsors said the bill would let memorial hospitals and hospital districts seek Chapter 9 bankruptcy reorganization with statutory guardrails and a required plan; witnesses warned several hospitals are financially stressed, with some reporting fewer than 10 days cash on hand.
The House Labor, Health and Social Services Committee voted to advance Senate File 5, a bill that gives memorial hospitals and hospital districts the option to pursue Chapter 9 bankruptcy reorganization under federal law, subject to statutory guardrails, a required repayment plan and public posting requirements.
Representative Steyer, who presented the bill, said the change is intended to expand options beyond dissolution or termination and to align state statute with Chapter 9 reorganization procedures. "This is about resolving and working to reorganize with their creditors," Steyer said, describing the statutory insertion and new guardrails that require a plan and public posting.
Eric Bolee of the Wyoming Hospital Association told the committee that Chapter 9 typically involves a court‑appointed person who coordinates a plan between the hospital and creditors. Bolee said the association had reviewed cases and that a handful of Wyoming hospitals are under serious financial strain; he noted that, by some national reports, three or four hospitals in the state were at risk and that some had "less than 10 days cash on hand." He urged the committee to adopt the option so struggling facilities could pursue reorganization rather than closure.
The bill’s language, as presented to the committee, inserts Chapter 9 as an available option for memorial hospitals and hospital districts, adds procedural guardrails requiring disclosure and a plan, and in one section makes the new option immediately effective to allow an expedited start if a hospital faces imminent distress. Committee members asked technical questions about Chapter 9 procedures and recent cases; Steyer and witnesses responded that the bill follows Chapter 9 code requirements and that at least one private hospital had used Chapter 9 in the past.
With no amendments offered, the committee approved Senate File 5 by roll call; the chair announced 9 ayes and declared the bill passed committee.
