Assemblyman Nicholas Chiaravalloti is pitching state legislation in response to announcements that CarePoint Health is seeking to sell Bayonne Medical Center along with its other two network hospitals, which he said came as a shock to local and county officials.
CarePoint Health Systems owns three hospitals in Hudson County. It plans to sell Christ Hospital in Jersey City and Hoboken University Medical Center to nonprofit healthcare agency RWJBarnabas.
An anonymous source familiar with the matter told the Bayonne Community News that CarePoint is currently negotiating with multiple major healthcare agencies about a tentative sale of Bayonne Medical Center. At press time, CarePoint hadn’t announced any sale agreements.
A slew of local, county, state, and union officials held a press conference on Oct. 21, during which they said that they didn’t receive adequate notice about the negotiations. The officials there said they should have been informed of CarePoint’s plan well before CarePoint informed the public.
Davis described the potential closure of Bayonne Medical Center as a “major health crisis.” While there is a newly-opened Jersey City Medical Center satellite facility operated by RWJBarnabas and some urgent care facilities in Bayonne, Bayonne Medical Center is the only full-service hospital in town.
On Nov. 6, Bayonne City Council members introduced a resolution that would establish a municipal hospital authority. That entity would take control of Bayonne Medical Center’s state charter in the event that CarePoint does not immediately find a provider to buy the hospital.
Mayor Jimmy Davis said that the hospital authority resolution is a preemptive form of protection against the hospital’s closure, which is what officials consider to be the worst-case scenario.
“To be perfectly clear, the city as a municipality has no intentions of operating a public hospital in the long term, but this provides us with the opportunity to create a bridge plan, if we need to do so, until a new provider is identified,” Davis said
Better oversight across the state?
Chiaravalloti introduced a three-bill package, which seeks to force hospitals to be more transparent about their own financial management.
“The Bayonne Medical Center is quite literally vital to the people of this city,” Chiaravalloti said. “If we had known sooner about a planned merger that could leave residents without access to healthcare, we could’ve had conversations with CarePoint Health to try to determine a better approach.”
Chiaravalloti said that the three bills would help New Jersey prevent hospitals from “engaging in questionable business practices that could lead to over-priced medical bills for patients. We can also make sure that no hospital ever reaches a point where its previously undisclosed financial situation is so dire that it is forced to close the facility, leaving community members with a complete loss of access to care.”
The first bill Chiaravalloti introduced would expand the Department of Health’s Early Warning System, which detects hospitals that may be approaching financial distress. The new legislation would allow the system to monitor fees, allocations, and payments made to third parties.
Another bill would allow the Commissioner of Health to alert elected officials upon finding a hospital in financial distress.
The third bill would require hospitals to share financial information with the Department of Health. Currently they are only required to share that information with the IRS.
Nonprofit hospitals would share IRS Form 990 with the Department of Health. Form 990 helps the IRS gather information about the revenues and expenditures of tax-exempt organizations. This bill would also require for-profit hospitals to submit equivalent information to the Department of Health.
The third bill would require hospitals to submit information about ownership, leases, and rentals of offices and properties. It would require the identification of investors, business partners, and other affiliates while sharing information about projects and ventures financially associated with the hospital.
Chiaravalloti cited a March report from the New Jersey State Commission on Investigation (SCI), which highlighted an administrative decision made by CarePoint executives for the hospital to pay $157 million in consulting fees over a three-year period to companies that had no staff or other clients but had ties to the hospital’s three principal owners, Vivek Garipalli, James Lawler, and Jeffrey Mandler.
The report did not allege that anything illegal or improper had occurred, but the $157 million in consulting payouts “raised questions about the nature of their operations,” the report said. The SCI urged legislators to expand systems that monitor financial decisions made by the owners of hospitals.
The report credited CarePoint’s owners with successfully prolonging the lives of three Hudson County hospitals, which were bankrupt and on the brink of closure, and taking on serious financial risks by paying off the debts accrued by all three facilities under previous ownership.
Several national publications have named Bayonne Medical Center as having the highest cost of services for any hospital in the nation. Patients rarely, if ever, pay for these fees, which are charged to insurers.
These charges, however, matter a great deal for patients under federally-regulated insurance plans who are admitted for emergency, out-of-network services.
New Jersey-regulated insurers are required to pay for out-of-network services and only charge patients the same premium as in-network services. For federal insurance plans such as Medicare or Medicaid, there is a cap on coverage.
Patients who have federally-regulated plans could get stuck with a bill that represents the difference between what their federal insurance is willing to pay and what the hospital charges.