Hudson Regional Hospital, which has had a contentious relationship with CarePoint Health over the ownership and operations of Bayonne Medical Center, issued a strong rebuke Monday afternoon to CarePoint’s announcement earlier in the day that CarePoint Health is now a nonprofit.
In a statement provided to ROI-NJ, Hudson Regional Hospital officials said CarePoint’s announcement is “potentially unlawful,” saying Hudson Regional Hospital owns Bayonne Medical Center and would need to give permission for CarePoint to transfer its ownership. (Hudson Regional officials not only deny giving permission, they said they were not even asked.)
“All today’s announcement accomplishes is to spawn more legal disputes and regulatory entanglements,” Hudson Regional Hospital officials said in the statement. “Furthermore, this announcement is not what it seems to be at first glance and is, in fact, nothing more than a giant tax deduction for CarePoint’s wealthy owners.”
Hudson Regional officials said the hospital feels CarePoint is attempting to switch those hospitals to nonprofit status in an “attempted escape of liabilities.”
Read more from ROI-NJ:
“CarePoint has not left a realistic path forward for the resulting nonprofit and is instead seeking to take a tax writeoff as it dumps its obligations on the public and its creditors,” they said in the statement.
CarePoint did not immediately respond to a request for a comment. Here is a link to its announcement that it was becoming a nonprofit.
Here is a look at the full statement from Hudson Regional Hospital, issued late Monday afternoon:
“Today’s victory lap announcement by CarePoint is puzzling, and potentially unlawful because the Department of Health has previously stated that a transfer of the CarePoint ownership interest to a nonprofit would require certificate of need approval, and no such approval has been announced. Further, we own the Bayonne Medical Center property and facility and are CarePoint’s landlord. The lease requires CarePoint to obtain our permission to change the controlling interest in the tenant, which they did not even bother to request, and thus has not been granted.
“All today’s announcement accomplishes is to spawn more legal disputes and regulatory entanglements. Furthermore, this announcement is not what it seems to be at first glance and is, in fact, nothing more than a giant tax deduction for CarePoint’s wealthy owners. CarePoint has defaulted in its leasehold obligations at Bayonne Medical Center, one of three hospitals it operates that it acknowledges are in financial distress, but only because its ownership has extracted $160 million in bonuses and distributions, according to a State Commission of Investigation Report. Rather than reinvest that money into the hospital chain’s future, CarePoint has not left a realistic path forward for the resulting nonprofit and is instead seeking to take a tax writeoff as it dumps its obligations on the public and its creditors.
“This is not the ‘gift’ it is portrayed to be of Vivek Garipalli’s shares to the public; this is an attempted escape of liabilities. With its ownership having taken their money and walked away, CarePoint has not identified a source of operating capital on a going forward basis and it will now be left to the public to pick up the pieces. How will CarePoint’s hospitals be funded and operated going forward without private ownership? The State Local Finance Board, the city of Bayonne council and the Department of Health are among the public entities that have expressed a desire to protect the future of these hospitals. It is not clear how those interests will be protected without a stable and well-funded source of ownership.
“As to Bayonne Medical Center, CarePoint’s proposed successor operator, Surgicore, has not filed complete financial reports that remotely justify any faith that it can operate this facility. It is unfortunate and, indeed, the height of cynicism that CarePoint would pull a stunt like this with public health at risk. Today is not a day to accept the premise of CarePoint’s self-congratulatory announcement but, rather, a day to express profound concern for the future of these hospitals.”