Hudson Regional Hospital has terminated CarePoint Health’s lease as operator of Bayonne Medical Center through a notification served on Dec. 31.
At the same time, CarePoint has announced that it has signed a letter of intent to sell the operations of Hoboken University Medical Center and Christ Hospital to a management company out of California.
The crisis plays out
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.
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.
On Dec. 11, Hudson Regional Hospital served CarePoint notice of default under the lease, providing it with 20 days to cure material issues. The notice, also sent to the NJ Department of Health, was accompanied by a transition plan that aims to assure there will be no interruption of healthcare service, according to Hudson Regional Hospital.
The notice came after CarePoint’s alleged failure to “maintain adequate financial records and to disclose its financial condition.”
Hudson Regional Hospital then terminated CarePoint Health’s lease as operator of Bayonne Medical Center through a notification served on Dec. 31. The lease termination coincides with an announcement that CarePoint has proposed a sale of the operations of Hoboken University Medical Center to a California-based healthcare operator.
“We intend to enforce the conditions of the lease for Hoboken University Medical Center, as we have Bayonne Medical Center to assure that the operator is financially and professionally fit to run a high-performing acute care program at our property,” said Yan Moshe, Chairman of Hudson Regional Hospital.
CarePoint previously announced a sale of Bayonne Medical Center’s operations, but its purchaser, BMC Hospital LLC, was unable to gain approval from the state Department of Health.
“Its only attempt at a resolution for Bayonne was to engage in a desperate transaction with a new group called BMC Hospital LLC whose principals have never operated an acute care facility, have demonstrated no financial capacity to complete the purchase, and were denied a license by the Department of Health,” said Dr. Nizar Kifaieh, CEO of Hudson Regional Hospital.
“The bottom line is that CarePoint has not demonstrated the will or the capacity to address its failures under the Bayonne lease and the requirements of the Department of Health; and BMC Hospitals LLC has not been deemed a suitable successor,” Moshe continued. “CarePoint now needs to act honorably and adhere to the conditions of the Lease Termination letter and cooperate with us on an orderly transition plan.”
CarePoint rejected and denounced the “reckless and unfounded” assertions made by Hudson Regional Hospital regarding the terms and conditions of the lease. According to CarePoint, Hudson Regional Hospital’s assertions have absolutely no merit.
“HRH has no legal right to terminate the lease,” CarePoint said. “We have told them that in writing, and that the unlawful HRH lease termination has no practical effect on Bayonne Medical Center, its incredible staff or its patients.”
According to CarePoint, it is only a publicity stunt and nothing will change at the hospital.
CarePoint said Hudson Regional Hospital’s Dec. 11 notice had no merit, and there have been no actions or judgments against CarePoint by any regulatory body or the courts.
“Contrary to the constantly misleading and erroneous claims which have become a showcase of HRH’s public relation strategy, Bayonne Medical Center continues to be operated and run as a full-service acute care facility in a sound and impeccable manner setting standards of quality and regulatory achievements,” CarePoint said. “HRH needs to focus on its own full-service acute care facility in Secaucus and improve its core quality and service lines rather than being constantly consumed with its ambitions to take over Bayonne.”
BMC Hospital LLC did not respond to requests for comment. Meanwhile, CarePoint looks to sell the operations at its other two hospitals.
Hospital operations sold
KPC Global Management, LLC and CarePoint jointly announced on Dec. 30 that the two parties had signed a letter of intent with regard to Hoboken University Medical Center and Christ Hospital in Jersey City.
KPC Global is one of many KPC companies founded by Dr. Kali Pradip Chaudhuri. The KPC companies’ assets total more than $10 billion in healthcare facilities across seven states.
CarePoint signed a letter of intent with RWJBarnabas Health in 2019 whereby that company would acquire operations at both Hoboken University Medical Center and Christ Hospital. However, there is no longer an active offer between CarePoint and RWJBarnabas.
With this letter of intent, KPC Global proposes to purchase the two entities that operate Hoboken University Medical Center and Christ Hospital as well as the two hospitals’ affiliated physician practices and assets of CarePoint Health’s management services organization and physician practice management business that serve the two hospitals.
According to CarePoint, the letter of intent sets forth terms for the proposed transaction and a path to a definitive agreement. The parties expect the transaction to close quickly pending standard approvals from regulatory bodies, including the state Department of Health.
Working toward a deal?
“We are excited and eager to move forward with this acquisition and expand the quality of services of healthcare for the residents of Hudson County,” said Dr. Kali Chaudhuri, Founder and Chairman of KPC Global.
“This potential transaction is an ideal opportunity to sustain the acute care hospitals in the CarePoint Health System,” said Dr. Achintya Moulick, Chief Executive Office of CarePoint Health.
KPC Global and CarePoint have discussed plans to build and expand clinical services at the CarePoint facilities. Those plans include a stroke center, advanced heart care unit, center for sports medicine, obesity center, metabolic diseases center, spine center, and center for robotics.
While the transaction does not include Bayonne Medical Center, KPC Global is interested in structuring a transaction that satisfies the stakeholders at all three facilities, including its leaseholders. KPC Global has expressed its willingness to partner with the current owner of Bayonne Medical Center, CarePoint, and future owner of Bayonne Medical Center. However, it did not clarify who the future owner would be.
Hudson Regional Hospital has expressed its intentions to operate Hoboken University Medical Center once the sale between it and Eisenreich closes, conflicting with CarePoint’s intentions to sell the operations to KPC Global.
With the entrance of a new entity in the Hudson County Hospital saga, it is clear things are 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.