NJ Department of Health recommends BMC Hospital receive greater operational share

However, Hudson Regional Hospital continues to fight for operations of the facility

The New Jersey Department of Health has recommended that CarePoint Health should be allowed to transfer 39.1 percent of its ownership of the operations of Bayonne Medical Center to BMC Hospital, LLC.

CarePoint has decided to exit the market, and has been selling its assets including Bayonne Medical Center. In 2019, it sold the property including the building and grounds to Avery Eisenreich, owner of the nursing home operator Alaris Health.

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While CarePoint searched for entity to purchase the operations, Hudson Regional Hospital eventually purchased it from Eisenreich for $76 million in 2020. At the same time, CarePoint had announced they had signed an agreement to sell the operations to BMC Hospital, LLC, founded by the investors behind surgery center chain Surgicore. 

However, when closing on the sale of the property, Hudson Regional Hospital announced its intentions to operate the hospital, sparking an intense battle over the operations of Bayonne Medical Center that ensued throughout much of 2020 and 2021. Since the start of 2022, there hasn’t been much movement, but now things are picking back up.

NJDOH gives the go-ahead

The NJDOH had recommended that BMC Hospital, LLC should be allowed to take ownership of the 39.1 percent stake in hospital operations that would be sold to it by CarePoint Health.

BMC Hospital, LLC previously filed a Certificate of Need in November of 2020 to operate the facility and the NJDOH held a public hearing on the potential transfer in December of 2021. BMC Hospital, LLC currently owns 9.9 percent of the hospital’s operations, and if the $4 million purchase of the 39.1 percent stake from CarePoint is allowed to proceed, the ownership of BMC Hospital, LLC would increase to 49 percent.

Now that the DOH has made a recommendation, the application will head to the State Health Planning Board for a vote this Thursday, April 7. The DOH cited its decision was based on what it thought would be the best for the hospital’s financial health; the promise that it would have no impact on the approximately 900 employees’ work statuses; the alleged minimal impact on the health care system; and the notion that the hospital under BMC Hospital, LLC would seek state approval to expand the number of behavioral health beds to allow more psychiatric admissions.

While the hospital lost money in 2020, CarePoint anticipated that it would generate operating margins of 1.8 percent in 2021, 4.6 percent in 2022, and 7.3 percent in 2023, according to the recommendation by the NJDOH.

“These margins demonstrate financial stability and will allow the hospital to make continued capital investments and to increase its cash reserves,” the NJDOH wrote.

Hudson Regional Hospital seeks a stay

Hudson Regional Hospital had requested the DOH stay BMC Hospital, LLC’s application. However, that request was denied on March 4. Yet the entity is not giving up, and is looking to apply for its own Certificate of Need to operate the hospital. Hudson Regional Hospital continues to fight for operations of the facility in the Delaware Chancery Court, seeking to evict the current tenant of CarePoint Health arguing breach of its lease.

“Since purchasing the Bayonne Medical Center property in 2020, Hudson Regional Hospital has been focused on creating a stable, high-performing healthcare environment in Hudson County,” a spokesman for Hudson Regional Hospital said. “We will continue to work with the Department of Health and other stakeholders to assure patients the best possible care.”

While BMC Hospital, LLC previously sought a 100 percent transfer of ownership in application submitted in July of 2020, this application seeks to circumvent Hudson Regional Hospital’s involvement. Applying for minority ownership in the hospital operations does not need consent from the landlord, Hudson Regional Hospital.

Meanwhile, the increase in ownership by BMC Hospital, LLC will not change much, according to the NJDOH. The entity has already been partnering with CarePoint and will continue to do so.

Entities applaud recommendation

BMC Hospital, LLC and CarePoint were delighted by the NJDOH’s recommendation.

“We appreciate the thorough process undertaken by Department of Health staff and the members of the State Health Planning board and are extremely pleased to receive their positive recommendation,” said a spokesman for BMC Hospital, LLC. “With the positive recommendation and approval of ownership’s track record, we can move forward confidently to see that Bayonne Hospital continues to thrive as the community’s only acute care hospital provider.  We look forward to building on our long collaborative history with the physician community to drive operational efficiencies and quality health outcomes to the citizens of Bayonne.”

“CarePoint is delighted that the Department of Health has proceeded with the state health planning board,” said a spokesman for CarePoint Health. “BMC, LLC has been a great partner over the past year and half and strengthened several core clinical areas and operations as consultants… With this enhanced partnership Bayonne has added several new clinical specialties and the increased participation with these added interests in the facilities will allow Bayonne Medical Center to be financially more viable.  The care of the patients will continue with greater sensitivity which has been the priority and focus of the current management team.”

CarePoint Health’s system continues to pursue being a nonprofit, according to a spokesman. Meanwhile, the city and county’s move to condemn the property through eminent domain to allow BMC Hospital, LLC to purchase and own it has stalled both before the Bayonne City Council and the Local Finance Board.

As the May 10 municipal election approaches, the topic of the hospital, widely expected to be a main issue, has again reared its head.

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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