Hospital transparency bills become law in wake of Bayonne Medical Center crisis

State Assemblyman Chiaravalloti co-sponsored the legislation to prevent loss of healthcare services

A series of hospital transparency bills, written amid the ongoing Bayonne Medical Center crisis, were signed into law by Gov. Phil Murphy on Tuesday, Jan. 21.

Members of the state assembly Nicholas Chiaravalloti (D-Hudson), Angela McKnight (D-Hudson) and Robert Karabinchak (D-Middlesex) sponsored the legislation, aimed at increasing New Jersey hospitals’ transparency to help prevent the abrupt loss of important healthcare services in local communities.

“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,” Assemblyman Chiaravalloti said. “For a district as densely populated as the 31st, the closure of a medical center could be the difference between life and death for our residents.”

The laws draw upon recommendations in the State Commission of Investigation (SCI) report regarding hospital-related oversight and accountability in New Jersey. The report came as a result of SCI’s investigation into CarePoint Health’s financial management.

Two of the bills in the three-bill package were signed into law on Jan. 21, while the third bill had been signed on Jan 13.

The bill previously signed into law gave broader oversight capabilities to the Department of Health (DOH) by expanding its Early Warning System, whose purpose is to detect whether hospitals are nearing or already in financial distress. The new law will require the system to monitor the quantity and suitability of any fees, allocations, and payments made to third parties.

“One shut-down can leave residents for miles without access to a hospital,” said Assemblyman Karabinchak. “Knowing sooner than later that a medical center is at risk of closing will allow us to take action and do what we can to help. Greater transparency is key to protecting our communities.”

Increased transparency will also be required of hospitals when it comes to providing financial information to the DOH. One of the bills signed allows the Commissioner of Health to notify elected officials if certain hospitals are found to be in financial distress.

“If unstable finances may lead to a shut-down, there must be prior warning to the community and any affected parties,” Chiaravalloti said. “These entities cannot be allowed to operate in the shadows with little oversight.”

The third law requires nonprofit hospitals to share IRS Form 990. Similarly, this law also requires for-profit hospitals to submit equivalent information to the DOH. This legislation is intended to reveal the different aspects of their revenue and taxation.

Bayonne Medical Center on E 29th and Broadway

“These laws will ensure that a hospital’s business practices are above-board and communities are never at risk of losing important services,” said Assemblywoman McKnight.

Further stipulations will require hospitals to submit information about ownership, leases, and rentals of offices and properties. It also requires the identification of investors, business partners, and other affiliates while sharing information about projects and ventures financially associated with the hospital.

“With better oversight, we can make sure that what might happen to Bayonne Medical Center cannot – and will not – happen to any other hospitals and their communities going forward,” McKnight said.

Bayonne Medical Center on shaky ground

The only full-service hospital in Bayonne is in a state of limbo.

The owner of Alaris Health, Avery Eisenreich, has purchased Bayonne Medical Center (BMC). But according to CarePoint officials, he is not interested in operating the hospital, nor in helping CarePoint Health in its negotiations to find a new operator.

So while BMC has a new landlord, CarePoint is still searching for a strategic partner to operate the hospital and lease it from Eisenreich.

Bayonne Medical Center had previously been owned by CarePoint, which has dissolved and has been liquidating its assets. That includes selling Bayonne Medical Center, Christ Hospital in Jersey City, and Hoboken University Medical Center.

CarePoint’s efforts to liquidate its hospital assets in Hudson County have led to a complex legal action involving all three of its hospitals and Avery Eisenreich, owner of Alaris Health.

A lawsuit filed in December of 2019 alleges that Eisenreich, the new landlord of BMC, plans to turn that hospital into a nursing home and names Eisenreich, Alaris, and MPT of Hoboken TRS as defendants.

CarePoint Health is represented in the suit by HUMC Holdco LLC, a leading member in CarePoint’s ownership group. HUMC Holdco claims in the suit that Eisenreich attempted to thwart negotiations to maintain BMC’s operation as a hospital by discouraging potential buyers.

The city of Bayonne and other parties who want to preserve Bayonne Medical Center as a full-service hospital have referred to Alaris Health as a nursing home operator. The company’s website says it provides short-term and post-hospital rehabilitation and long-term specialty care in its health centers throughout Hudson County, including in Jersey City, Guttenberg, Secaucus, Union City, and Kearny.

For updates on this and other stories, check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Dan Israel can be reached at disrael@hudsonreporter.com.