CarePoint Health is allegedly in default under its lease of the Bayonne Medical Center property, according to Hudson Regional Hospital CEO Dr. Nizar Kifaieh.
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 70 percent of the land of Hoboken University Medical Center in November of 2019.
CarePoint has been searching for an operator for the facilities ever since, eventually signing a formal sale agreement with BMC Hospital LLC to operate Bayonne Medical Center. BMC Hospital LLC’s leadership is composed of investors from the surgery-center chain Surgicore.
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 in Secaucus has closed on the purchase of the real estate of Bayonne Medical Center for $76 million and is in contract with Eisenreich to acquire Hoboken University Medical Center for $144 million.
When the sales close between Hudson Regional Hospital and Eisenreich, Hudson Regional Hospital intends to operate the hospitals, not BMC Hospital LLC. This has sparked a war between the two entities over who will operate the hospitals.
Defaulting on the lease?
“Today we served CarePoint Health with a letter detailing defaults under its lease for the Bayonne Medical Center property, which is owned by Hudson Regional Hospital,” Kifaieh said.
Hudson Regional Hospital has penned a letter to the Department of Health requesting regulatory activity.
“This action was taken after not only a thorough analysis of our rights as a landlord and CarePoint’s duties as a tenant, but in consideration of the broader obligations of healthcare providers,” Kifaieh said. “Anything less than a stable, high-performing operation at Bayonne Medical Center is unfair to the people of Bayonne.”
Kifaieh alleged the violations under the lease suggest CarePoint may not have the financial wherewithal to continue operating an acute care facility in Bayonne.
Kifaieh continued: “We have assured the Department of Health and we further assure the public that this action does not represent a threat to the operations of Bayonne Medical Center. We have provided CarePoint with ample time to address its failures under the lease, but its violations under the terms of its lease must be resolved.”
As a result of the alleged default, Hudson Regional Hospital will terminate the lease and convert to an at-will tenancy as of Dec. 31. Also on that day, Hudson Regional will terminate the management company of Bayonne Medical Center. It intends to put in place its own management company to oversee the operation of the hospital and will seek physical access to the facility, books, and financial records.
Hudson Regional Hospital demands that CarePoint hand over the necessary documents to transfer ownership and control of the operating license and certificate of need for Bayonne Medical Center to a third-party of HRH’s choosing. This would be subject to the Department of Health’s approval through the filing of a certificate of need application.
According to the letter, Hudson Regional Hospital also demands that CarePoint withdraw all certificate of need applications from consideration by the Department of Health. Hudson Regional claims that CarePoint allegedly being in default disqualifies it from seeking a certificate of need to sell Bayonne Medical Center to BMC Hospital LLC.
CarePoint denies allegations
CarePoint denies default under the lease and said that Bayonne Medical Center is current on its rent payments.
“The Clinical leadership at Bayonne and other CarePoint hospitals chooses to focus on patient care,” according to CarePoint. “We are supporting our communities and are actively gearing up to start the COVID-19 vaccination process for our healthcare workers and our vulnerable population as well as continue to treat and fight the pandemic.”
CarePoint said these statements and actions by Hudson Regional Hospital can demoralize the caregivers and healthcare heroes at Bayonne Medical Center who are caring for patients tirelessly during this pandemic. The three CarePoint hospitals have been in the forefront in working to contain the virus.
“Across the CarePoint Health system our nurses, physicians and staff continue to focus on delivering the best quality care as they respond to the second COVID-19 wave,” according to CarePoint. “The system has developed significant expertise in caring for the very sick patients and with the incorporation of the Extra Corporeal Membrane Oxygenation and the Interventional Stroke programs, the hospitals within the system have been supporting each other and have had referrals from other hospitals from Hudson County and other counties as well. The Clinical leadership at Bayonne and other CarePoint hospitals chooses to focus on patient care.”
BMC Hospital LLC fires back
BMC Hospital LLC issued a statement in response to Hudson Regional’s allegations.
“HRH and its executives should be ashamed of themselves for once again adding uncertainty to the lives of thousands of Bayonne residents who depend on Bayonne Hospital for health care,” said Wayne Hatami, President of BMC Hospital LLC. “The idea that someone would selfishly undercut a hospital while a community is ravaged by a pandemic is abhorrent. This behavior only confirms that HRH cares more about turning a profit off the backs of Bayonne patients to subsidize its other hospital than it does about serving the Bayonne community.”
He continued: “It is clear that Hudson Regional cannot accept that it lost in Carepoint’s RFP process. Bayonne residents want to receive care locally on the peninsula from operators as focused on Bayonne as they are, and that is why BMC was selected and will serve this community.”
Last month BMC Hospital LLC acquired 9.9 percent of hospital operations at Bayonne Medical Center and is eyeing up to 49 percent of operations. Due to the alleged default, Hudson Regional Hospital objected to the acquisition and any further acquisitions by BMC Hospital LLC.
Both sides remain confident that they will prevail and that the Department of Health and courts will rule in their favor. While lawsuits drag on, the hospital crisis in Hudson County remains far from over.
For updates on this and other stories, check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Daniel Israel can be reached at firstname.lastname@example.org.