Hudson Regional Hospital and BMC Hospital LLC are both declaring major victories following two separate court rulings that they believe bolster their respective cases to purchase the Bayonne Medical Center.
“Today’s ruling was even stronger than the court’s denial of a similar motion brought by CarePoint last month,” HRH CEO Dr. Nizar Kifaieh said in a statement.
“BMC Hospital LLC‘s dressing up these claims as its own was a frivolous attempt to upset the transaction entered by Hudson Regional to purchase the Bayonne Medical Center property and further reveals flaws in BMC Hospital LLC’s premise to take over Bayonne Medical Center.”
He further stated that BMC Hospital LLC has not demonstrated the experience, or financial capacity, to run, upgrade, and operated the Bayonne facility, which he describes as “woefully neglected.”
Hudson County Superior Court Judge Jeffrey Jablonski ruled against an application that sought to block HRH’s purchase of the BMC on Thursday.
“Count 1 of the Plaintiff’s complaint seeking declaratory judgment be and is hereby dismissed without prejudice, this court having found that the relief requested in that count is within the exclusive determination of the Department of Health, and that the Plaintiff has not yet exhausted the administrative remedies available to it,” Jablonski wrote.
However, he also decided that Courts 2, 3, and 4 “are facially valid” and a formal answers on those counts are due on or before July 17th and the case still isn’t expected to go to trial until February 15th, 2021.
The lawsuit, filed last month, alleges that HRH was interfering with CarePoint’s sale to BMC Hospital.
In response, BMC Hospital pointed to a preliminary injunction out of a case against HRH owner Yan Moshe in Eastern District of New York U.S. District Court as being a far more significant development.
“Hudson Regional Hospital’s claim of financial stability is at odds with its own financial reports to DOH, which reveal just around ‘3 days cash on hand’ – a very precarious situation,” BMC Hospital said in a statement.
“In last week’s injunction from the Federal District Court in Brooklyn, a senior judge halted pending arbitrations with GEICO involving $15 million in claims of Hudson Regional (and even more of its affiliates), citing ‘troubling questions’ about services, billing practices and facility cleanliness which demonstrated a ‘complicated scheme of … fraudulent activity.’”
They also called on HRH to improve their own financial situation before trying to acquire another hospital.
On June 2nd, CarePoint announced a new deal where BMC Hospital LLC would take over the Bayonne Medical Center, however, just minutes later, HRH revealed that they’d come to a $220 million agreement to purchase the properties at the BMC and Hoboken University Medical Center.
The hospital said they would purchase the property from Avery Eisenreich, also the owner of the Alaris Health nursing home chain, for $76 million.
CarePoint Health, along with Mayor Jimmy Davis and his administration, have pushed for BMC Hospital to take over the medical facility, but the New Jersey Department of Health has declined to weigh in on the situation to date.
While they denied the entity’s expedited review for a certificate of need late last month, they filed a standard CN on July 1st.
“The fact that it is CarePoint vouching for BMC Hospital LLC, and the fact that BMC Hospital LLC asserts that it will maintain the current CarePoint management, heightens rather than calms concerns over the stability of the hospital’s operation as an acute care facility,” Kifaieh added.
“CarePoint’s management lost $30 million last year and operates an out-of-network healthcare system, and BMC Hospital LLC, whose own financial position is called into question as it has not even produced a balance sheet.”
While the Hudson County Improvement Authority has confirmed they’ve begun eminent domain proceedings on the BMC and Hoboken University Medical Center, but Kifaieh says that isn’t going to bear fruit.
“This situation does not meet the standard for eminent domain, which cannot be applied to a hospital based on a legal opinion from our attorneys and which is unnecessary because we are purchasing the property and able to operate it without public subsidy.”