The Douglas Hospital is now in bankruptcy reorganization.
Community Healthcare of Douglas Inc. operates the Southeast Arizona Medical Center in the border community.
The president of Community Healthcare, Jim Riley, announced the bankruptcy filing Friday and informed employees at the health care facility.
The Sierra Vista Regional Health Center has been managing the Douglas facility under an agreement for more than 18 months.
Officials say the health center will continue to provide support until the federal court in Tucson decides which bidder will take over operations at SAMC.
The Sierra Vista Herald says SVRHC has lent nearly $1 million to the Douglas hospital. They will be repaid when a new company is chosen to operate the facility.
Arizona hospitals, especially in rural areas and small towns, have been under financial stress for years over costs of uninsured care, rising health care prices and other factors.