NJ Department of Health denies expedited transfer of Bayonne Medical Center operations

BMC Hospital LLC requested the expedited review of the certificate of need

With each passing week, new revelations unfold in the ongoing Hudson County hospital crisis. On June 24, the New Jersey Department of Health (NJDOH) denied BMC Hospital LLC’s request for an expedited review of its certificate of need to operate Bayonne Medical Center.

This comes after BMC Hospital asked for expedited review of the application to operate Bayonne Medical Center, alleging dire financial circumstances and hinting that the medical center may close, alleging “potential loss of access to essential life-saving services.”

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Despite BMC Hospital’s plea to expedite the process, the Department of Health has stated that a full-review is required for its application to operate the hospital.

“As you are aware, Department’s Certificate of Need regulations … require that a transfer of ownership of an acute care general hospital be subject to the full-review certificate of need process,” the letter from the Department of Health stated. “The Department has determined that, despite your intentions of proceeding through the ERCN [Expedited Review of Certificate of Need] process, the proposed transaction does not meet the standards for ERCN review.”

BMC Hospital can reapply to the Department of Health to operate the hospital under the full-review certificate of need application.

Current hospital operator CarePoint Health and hospital real estate owner Avery Eisenreich have penned their own letters to the Department of Health, asking for intervention.

A months-long saga

CarePoint Health is dissolving and has been liquidating its assets, including Bayonne Medical Center, Hoboken University Medical Center, and Christ Hospital in Jersey City.

Avery Eisenreich, owner of nursing home operator Alaris Health, purchased the land of Bayonne Medical Center and Hoboken University Medical Center in November of 2019. CarePoint has been searching for a hospital operator for the facilities ever since, eventually signing a formal sale agreement with BMC Hospital to operate the hospital in Bayonne.

CarePoint has also signed a letter of intent with RWJBarnabas Health whereby that company would acquire operations at both Hoboken University Medical Center and Christ Hospital.

Meanwhile, Hudson Regional Hospital entered into a contract to buy the properties on which Bayonne Medical Center and Hoboken University Medical Center sit from Eisenreich for $76 million, and $144 million respectively. When the sale closes between Eisenreich and Hudson Regional Hospital, Hudson Regional intends to operate the hospitals, not BMC Hospital.

The announcement came on the same day as the announcement of the formal sale agreement between CarePoint and BMC Hospital.

In May, the Hudson County Board of Freeholders voted to approve three resolutions invoking eminent domain on the three CarePoint Health hospitals.

The Hudson County Improvement Authority was authorized to seize the land, owned by Eisenreich, and his share of the hospitals through eminent domain. The Improvement Authority would then resell the hospitals to entities that would operate them as acute care facilities.

Hudson County Executive Tom DeGise has also asked Department of Health  Commissioner Judy Persichilli for help. Mayor James Davis of Bayonne, Mayor Ravi Bhalla of Hoboken, Mayor Steven Fulop of Jersey City, Mayor Brian Stack of Union City, and Improvement Authority CEO Norman Guerra also signed the letter.

In response, BMC Hospital and Eisenreich penned their own letters to the Department of Health, asking for support of their respective transactions.

CarePoint has also filed suit against Hudson Regional Hospital, claiming it is interfering with the transaction to sell the hospital in Bayonne. And while a judge denied a temporary restraining order and ruled that Hudson Regional had not breached a confidentiality agreement between the entities, a trial date is set for 2021.

Amid the back-and-forth, BMC Hospital got Bayonne Medical Center’s staff to voice its support for the transaction with CarePoint.

Approximately 200 people comprising “the independent medical staff, doctors, nurses, union delegates and members of the HPAE Union as well as members of the community advisory group of Bayonne Medical Center” have expressed “enthusiastic support of the pending transaction between CarePoint Health and Bayonne Hospital LLC.”

Many of those staff members joined Mayor Davis a few days later outside Bayonne Medical Center, calling on the Department of Health to intervene on behalf of CarePoint and BMC Hospital.

Davis said he didn’t know of any deal with Hudson Regional Hospital and was familiar only with the deal between CarePoint and BMC Hospital.

After the rally in front of the hospital, Hudson Regional Hospital President and CEO Dr. Nizar Kifaieh sought to set the record straight in a letter to Mayor Davis.

HRH sets the record straight

“As observers of the Bayonne Medical Center rally on June 24th, and the resulting media coverage, we feel compelled to set the record straight with you and the Bayonne community on a number of important matters,” Kifaieh wrote.

Kifaieh said that as the “next owner-operator of Bayonne Medical Center,” HRH guarantees a number of things primarily including the permanent operation of the hospital as an acute care facility.

“First and foremost, we are fully committed to continue the operation of Bayonne Medial Center as an acute care hospital, supporting a best-in-class workforce of doctors, professionals, and support staff,” Kifaieh said.

HRH will guarantee COVID-19 preparedness, uninterrupted operation, and capital investment as owner-operators of Bayonne Medical Center.

“Bayonne Medical Center in no sense faces the possibility of closure. We are under contract to purchase the property as a means of assuring that if CarePoint follows through with its threat to abandon operations, we will assume operations immediately,” Kifaieh said. “In fairness, after a review of DOH filings, we have offered CarePoint the same transaction terms it proposed to enter BMC Hospital LLC., and we have shown proof of funds to complete the transaction immediately.”

Kifaieh said Hudson Regional Hospital will invest in Bayonne Medical Center to create a contemporary setting and the equipment and technology required to create the high-performing institution “that Bayonne deserves.”

Kifaieh said that as the owner-operator, Hudson Regional guarantees no public funding required and “stable property ownership and operation.”

“We will close our transaction without requiring any public funding, and in any event we have attached a legal opinion that confirms our view that eminent domain is obviated for hospital property,” Kifaieh said.

By marrying the operations of the hospital with its land ownership, Kifaieh said that Hudson Regional Hospital will resolve the concern over the stability of Bayonne Medical Center.

HRH has submitted a pending Certificate of Need Application for review by the Department of Health.

“No certificate of need application is complete without control of the property, which is pending based on our contract to purchase Bayonne Medical Center,” Kifaieh said.

Kifaieh continued, “We would like to offer to build on that very positive meeting by convening again to discuss our commitment to the Community in Bayonne and the details behind the assertions in this letter,” Kifaieh said. “We want to collaboratively work alongside you and your team for years to come in making Bayonne Medical Center the facility we all know it can and should be.”

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.

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