Negotiations at a standstill for CarePoint Health and RWJBarnabas

Jersey City Mayor petitions Gov. Murphy for help

Hudson County’s three hospitals remain in a state of limbo.

According to a statement by RWJBarnabas Health (RWJBH), negotiations to acquire Christ Hospital in Jersey City and Hoboken University Medical Center (HUMC) from CarePoint Health are at a standstill.

CarePoint Health has dissolved and has been liquidating its assets. That includes selling Bayonne Medical Center (BMC), Christ Hospital, and HUMC.

In October of 2019, CarePoint Health and RWJBH signed a letter of intent, whereby Christ Hospital and HUMC will become part of RWJBH.

In November, Avery Eisenreich, owner of Alaris Health, purchased the real estate of the Bayonne and Hoboken hospitals. Eisenreich also owns 25 percent of Christ Hospital.

Now negotiations are falling apart, because CarePoint recently rejected an offer that RWJBH said was “fair and appropriate.”

CarePoint, said it never received a draft lease as outlined in the letter of intent. Instead, CarePoint said it was asked to “gift” the HUMC and Christ Hospital real estate to RWJBH.

Eric Bloom is a representative from Mercury Public Affairs working on behalf of CarePoint Health. Bloom told the Bayonne Community News that CarePoint is still ready to strike a deal with RWJBH.

“CarePoint Health was and remains ready to close the deal in accordance to the letter of intent that CarePoint Health and RWJ Barnabas Health heavily negotiated and signed in October,” Bloom said. “CarePoint Health welcomes the opportunity to return to negotiations.”

Jersey City Mayor Steve Fulop petitioned for help from Gov. Phil Murphy after the negotiations between RWJBH and CarePoint had broken down.

Fulop said the hospital closing would be a “disaster” and asked Gov. Murphy to intervene because RWJBH and CarePoint negotiations are at an “impasse.”

CarePoint seemed optimistic about the idea of the state getting involved in the negotiation process.

“We hope direct involvement by state and local leaders will help the negotiations,” Bloom said.

According to RWJBH, the terms of the rejected offer ensured the residents of Hudson County access to high-quality medical care and also eliminated the complex management and ownership structures of the CarePoint-affiliated entities.

Terms of the deal

RWJBH said that the complex management structures of CarePoint-related entities is what gave rise to the litigation among CarePoint’s owners.

CarePoint’s effort to dissolve has led to complex litigation involving three of its hospitals and Eisenreich.

Eisenreich recently pushed back against CarePoint Health’s lawsuit, filed on Dec. 4, which alleged that Eisenreich interfered in CarePoint’s negotiations with RWJBH to operate Christ Hospital, allegedly jeopardizing the deal.

Eisenreich denies this as well as allegations that Eisenreich interfered with CarePoint’s negotiations to find a hospital operator for Bayonne Medical Center for the purpose of allegedly turning it into a nursing home.

In a counterclaim against CarePoint’s owners on Jan. 15, Eisenreich also claims CarePoint’s owners were allegedly embezzling millions of dollars from the three hospitals, leaving Christ Hospital deeply in debt.

Eisenreich’s counterclaim alleges that the owners of CarePoint formed a complex web of inter-related companies to shift expenses and payments to, from, and between the hospitals. This allowed the owners to allegedly conceal their activities and falsify the books.

According to the Jan. 15 court document, from 2013 to 2016 more than $157 million in fees was paid to the alleged shell management companies, approximately $30 million from Christ Hospital, $30 million from HUMC, and $99 million from BMC.

As a result of the fictitious fees, the lawsuit claims Christ Hospital has been bankrupted and is currently $30 million in debt.

RWJBH said it wanted to deal with CarePoint Health regardless of the litigation that CarePoint was involved in.

“Despite the incredible distraction caused by this extraneous litigation, RWJBarnabas Health continued to negotiate in good faith with representatives from CarePoint, and remained bolstered by the widespread support it had been receiving from the community, local and state officials, physicians and hospital staff alike,” RWJBH said in a statement dated Feb. 3.

More uncertainty ahead

Looking ahead, it wasn’t clear if RWJBH would be willing to continue negotiations with CarePoint in the future. However, RWJBH reiterated its support for the residents of Hudson County through its other hospitals in the area.

“RWJBarnabas Health has a comprehensive network of health care facilities, physician practices and ambulatory clinics – at Jersey City Medical Center, as well as in Bayonne and Greenville – that currently serve much of Hudson County,” RWJBH said. “Notwithstanding this disappointing result, RWJBH will remain committed to the provision of health care to residents of Hudson County and will continue to make additional strategic investments for growth in the months and years to come.”

The failure to reach a deal in Jersey City would directly affect Bayonne.

The potential purchase of Christ Hospital by RWJBH was intended to facilitate the financial viability of Bayonne Medical Center, the lawsuit filed by CarePoint Health against Eisenreich alleges.

If Christ Hospital closes, BMC could close shortly after, without the funds from the deal to maintain BMC’s operations until CarePoint finds a partner to operate the hospital.

Eisenreich bought the real estate in Nov. of 2019, but CarePoint officials said he is not interested in acting as an operator for the hospital.

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