BAYONNE, NJ - Two entities seeking to control operations at Bayonne Medical Center came to almost completely different conclusions about a court ruling this week.
According to representatives from Hudson Regional Hospital (HRH), a ruling by Hudson County Superior Court Judge Jeffrey Jablonski will allow HRH to move ahead with the purchase of Bayonne Medical Center for $76 million. However, representatives from BMC Hospital LLC, which filed the suit to halt the sale, believe the court ruling allows the suit to continue.
CarePoint Health currently operates Bayonne Medical Center and announced last year that as a result of its continued financial losses, will sell the operations. HRH argued that CarePoint handpicked BMC despite financial questions raised by a State Commission of Investigation (SCI) report.
HRH further argued that BMC Hospital LLC does not comply with Department of Health (DOH) regulations to gain a hospital license because it does not own or control the property where Bayonne Medical Center is located, and pointed out that the aspiring buyer’s application for an expedited Certificate of Need to assume operation of Bayonne Medical Center was rejected by the state regulators.
BMC, on the other hand, said the court’s ruling only dealt with the real estate transfer issue – not the more-important hospital license and operations (BMC Hospital LLC has contracted with CarePoint to purchase the license and ongoing operations). BMC contends that DOH regulations expressly require DOH Certificate of Need (CN) approval prior to transferring a hospital’s real estate.
“Such approval has never been granted by the DOH to the current property owner and no evidence has been produced to document that HRH has obtained a CN to become the new property owner,” BMC said in release. “The judge essentially ruled that the decision on whether a CN is required to transfer a hospital’s real estate should first be rendered by the DOH, and then can be appealed to a court. The judge dismissed only Count 1 of the BMC lawsuit – and did so without prejudice – so that BMC can seek the DOH’s ruling, which BMC will seek immediately. All other counts remain fully active and are being litigated in court on an abbreviated schedule.”
“Today’s ruling was even stronger than the Court’s denial of a similar motion brought by CarePoint last month,” Dr. Nizar Kifaieh, CEO of Hudson Regional Hospital, countered. “BMC Hospital LLC‘s dressing up these claims as its own was a frivolous attempt to upset the transaction entered by Hudson Regional to purchase the Bayonne Medical Center property and further reveals flaws in BMC Hospital LLC’s premise to take over Bayonne Medical Center. Not only does BMC Hospital LLC have no experience operating an acute care facility, it also has never demonstrated its financial capacity to provide the needed upgrades and address the deteriorating conditions at a hospital that has been woefully neglected.”
Both groups have questioned the other group’s financial ability to sustain the hospital.
HRH said the State is currently questioning CarePoint’s transfer of $157 million out of the network last year. BMC claims HRH is operating with only a three-day cash flow.
HRH also questioned BMC’s need to have the County of Hudson purchase the property through eminent domain, saying this may prove to be a key factor since giving the operations to Hudson Regional would expend no public funds in the transfer.
“BMC Hospital LLC’s plan requires that the property is purchased through eminent domain and that the County leases the land to BMC Hospital LLC at a reduced rate, settling on the taxpayers the obligation to subsidize the transaction,” said Dr. Kifaieh. “This situation does not meet the standard for eminent domain, which cannot be applied to a hospital based on a legal opinion from our attorneys and which is unnecessary because we are purchasing the property and able to operate it without public subsidy.”
This comes at a time when the Hudson County Improvement Authority (HCIA) has already taken the first steps towards acquiring the property of all three CarePoint hospitals.
Hudson Regional and BMC Hospital LLC were among several groups that bid to take over Bayonne Medical Center operations. CarePoint announced in March that it intended to sell Bayonne Medical Center to BMC. Shortly after this, HRH announced that it had come to agreement with Avery Eisenreich to purchase the property of Bayonne Medical Center and Hoboken University Medical Center.
In a case that will not be heard until next year, CarePoint filed suit claiming HRH interfered with the sale to BMC.
“You have to wonder why these public officials are supporting a deal that will cost taxpayers money when with our deal no taxpayer money will be involved,” HRH spokesman Ron Simoncini, who called the BMC’s legal wrangling a sign of desperation, asked in reference to the overwhelming support the transaction has received from elected officials including County Executive Tom DeGise and Mayor Jimmy Davis.
“They are trying everything. They’ve got desperation written all over them; this is their death rattle,” he said.
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