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More developments in Hudson County hospital saga

Lawsuits pile up as the fight over Bayonne Medical Center continues

Bayonne Medical Center has been caught in the fight between two entities seeking to operate the hospital. Photo by Daniel Israel.

On March 3, Superior Court Judge Jeffrey Jablonski rejected a motion filed by CarePoint Health against Dr. Nizar Kifaieh, CEO of Hudson Regional Hospital (HRH), to prevent him from speaking against CarePoint, where he previously held several senior roles.

The judgment marks another development in litigation between the entities battling over Bayonne Medical Center.

A hospital in crisis

CarePoint Health is dissolving and has been selling 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, HRH 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 HRH and Eisenreich, it intends to operate the hospitals, not BMC Hospital LLC. This has sparked a war between the two entities over who will operate the hospitals.

Prior to the recent legal developments, HRH terminated CarePoint Health’s lease as operator of Bayonne Medical Center through a notification served on Dec. 31, changing its status to month-to-month pending eviction proceedings.

Lawsuits galore

According to HRH, this is the fourth time CarePoint and related entities have lost efforts to prevent Hudson Regional Hospital from speaking out against them.

In a statement, HRH reiterated it is the owner of the Bayonne Medical Center property and that it can dictate which entity provides services there. HRH said that it will continue to speak on the matter “in the courts, before the Department of Health, and directly to the public.”

“I am thankful that justice prevailed, and I will be able to continue to perform my duties in full, which includes participating in a robust dialog about the state of healthcare in Hudson County,” said Kifaieh.

“As an organization, we have every right to scrutinize the condition of our tenant at Bayonne Medical Center so the public is aware of the threats to the healthcare system as a result of their publicly disclosed statements about their financial troubles,” said Yan Moshe, Chairman of HRH. “Trying to silence my CEO insults every person in Hudson County.  We are committed to this fight to rescue Bayonne Medical Center.”

Litigation dropped

BMC Hospital LLC dropped a lawsuit against HRH on Feb. 8 that sought to prevent Kifaieh from making disparaging remarks about CarePoint per their separation agreement.

“As we have asserted frequently during this process, Hudson Regional stands ready to assume operations at Bayonne at a moment’s notice, Kifaieh said. “Our pending Certificate of Need application acknowledges that CarePoint remains the operator for Bayonne until such time as it fulfills on its announced intention to exit the market; but asserts that in the public interest the remainder of the application should be considered on the merits and approved conditioned upon the Delaware courts enforcing HRH’s leasehold right to possession.”

BMC Hospital LLC defended its decision to drop the lawsuit, stating it would have won the case but wanted to focus on proceedings with the state Department of Health.

“It is important to note that, under the agreement with Hudson Regional Hospital, we maintain the right to bring those litigation claims or others forward in the future against them,” BMC Hospital LLC said in a statement. “That said, we are very confident that BMC Hospital LLC will be approved by DOH as the full and sole operator of the hospital once the issues related to land ownership are resolved in ongoing or future proceedings.”

In response, spokesperson for HRH Ron Simoncini asserted that HRH would be approved as the operator of Bayonne Medical Center when the dust settled.

“Despite BMC Hospital LLC’s attempt to divert attention to its failed status as a prospective healthcare operator, the fact is that The Department of Health has made it clear they will not review for license an incomplete application,” Simoncini said. “BMC will never be able to submit such an application. Not only has a lease for BMC Hospital LLC been rejected, CarePoint’s lease has been terminated as a result of material default including related to its financial condition.”

HRH said it has also served a cease-and-desist letter on CarePoint seeking to discontinue CarePoint, BMC Hospital LLC and its affiliate Surgicore Surgical Centers for engaging in “alleged improper physician recruitment and inducement practices.”

Cease and desist

Following HRH’s statements after the litigation was dropped, BMC Hospital LLC has moved to file a defamation lawsuit and has sent HRH a cease-and-desist letter of its own, according to a letter penned by its attorney James Flynn.

“Without retraction and cessation, BMC and Surgicore stand to be damaged to the tune of millions to tens of millions of dollars, and you and your client are now on notice of these falsities, and that we have been authorized to prepare a complaint against your clients due to their utter disregard for truth, willingness to hurl untruths indiscriminately, and clearly evident desire and maliciously focused intent to interfere with our clients’ existing business relations and prospective economic advantage,” Flynn said. “You and your clients may expect all previous claims to be re-ignited along with new claims based on the new lies your clients have fired off. Any additional false public statements by your clients will only further inflame the situation and increase the damages caused by your clients.”

According to BMC Hospital LLC, the issue lies with HRH’s many statements about BMC Hospital LLC’s application to the state Department of Health among others. Flynn said that BMC Hospital LLC has shown HRH it has more than $75 million in assets and claimed that its certificate of need application is still under review. It also denied participating in any “improper physician recruitment.”

In response, Simoncini said that HRH would not be issuing a retraction and encouraged the new litigation, claiming BMC Hospital LLC would have to produce information regarding its audited financials, certificate of need application to the state Department of Health to operate Bayonne Medical Center, and the management agreement between CarePoint and BMC Hospital LLC. HRH alleges BMC Hospital LLC has “long withheld” this information from the public.

“Threatening to file suit is just another attempt to shut down dissent and dialogue around a matter of significant public interest in a regulatory environment,” Simoncini said. “There is no clearer example of a SLAPP-suit, or ‘strategic lawsuit against public participation,’ which is another illegal device when related to public entities such as hospitals. HRH, which operates in compliance with DOH rules and is the owner of the hospital property that binds CarePoint Health to a lease, can afford complete transparency. CarePoint and BMC definitively are flaunting our lease and the rules of the Department of Health. This truth is an absolute defense of our report. If CarePoint and BMC bring a suit, they must tell the truth about themselves in ways that they never have.”

As all legal disputes between BMC Hospital LLC and HRH have now been been consolidated, both entities remain confident they will win in the end. But with a possible new defamation lawsuit and eviction proceedings, the battle is 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 disrael@hudsonreporter.com.

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