Bankruptcy trustee calls for investigation into auction sale of Jersey City's Christ Hospital

Sunday, September 30, 2012, 3:26 PM
By Terrence T. McDonald/The Jersey Journal

A U.S. Bankruptcy Court trustee is calling for an investigation into the recent sale of Jersey City's Christ Hospital, saying the process has been "called into question" by an email alleging the company that failed in its bid to purchase the Palisade Avenue hospital tried to "fix" the process in his company's favor.

An independent third party is needed to examine the proceedings to ensure Christ Hospital's eventual sale to Hudson Hospital Holdco was "not tainted in any way by self dealing, a power-play, or an attempt to improperly influence the sale process," writes Roberta A. Deangelis, the trustee, in Friday's 14-page filing.

The email, included in full in the filing, appears to have been sent on Sept. 12, 2012 from Warren Martin, Christ Hospital's bankruptcy attorney, to Bill Colgan, who heads Bloomfield-based Community Healthcare Associates, which partnered with the Jersey City Medical Center in a failed bid to acquire Christ Hospital.

According to the email, sent months after the sale to Holdco was finalized, Colgan had asked Martin to "fix" the auction in CHA's favor in exchange for dropping a lawsuit CHA was planning to file against Martin's firm.

"But I made sure that the Christ Hospital auction was honest and fair for all parties -- and not rigged in your favor," the email reads. "That is the only way I know how to do business."

Complicating matters is a civil suit filed by Colgan and others against Martin and his Morristown law firm, Porzio, Bomberg, and Newman, on the unrelated matter referenced in Martin's email.

A CHA spokesman declined to comment, citing "pending litigation." Calls placed to a Holdco spokesman and to Martin's office were not returned.

The trustee's request for an inquiry is a stunning development in the already tortured history of Christ Hospital's struggle toward financial solvency.

Last summer, officials at the nonprofit hospital announced its planned acquisition by a for-profit company out of California, a deal that eventually collapsed in February after intense community opposition. A week later, the hospital filed for bankruptcy.

Two major bidders soon emerged for the 140-year-old Christ Hospital: CHA, which sought to purchase the facility and lease a portion of it to the Jersey City Medical Center for use as a nonprofit hospital; and Holdco, which owns Bayonne Medical Center and Hoboken University Medical Center and intended to transform Christ Hospital into a for-profit entity.

Holdco ended up offering the highest bid, $42.5 million. The sale was finalized by a state Superior Court judge in July.

JCMC spokesman Mark Rabson declined to comment, noting that JCMC is not cited in the court filing.

http://www.nj.com/hudson/index.ssf/20 ... y_trustees_calls_for.html

Bankruptcy court awards Christ Hospital of Jersey City to Hudson Holdco

March 28, 2012, 3:03 AM
By Terrence T. McDonald/The Jersey Journal

A bankruptcy court judge in Newark yesterday awarded bankrupt Christ Hospital to the parent company of two for-profit hospitals in Hudson County.

Judge Morris Stern chose the $43.5 million bid by Hudson Holdco, which owns and operates the Hoboken University Medical Center and the Bayonne Medical Center, over the proposal by Community Healthcare Associates, which had planned to lease the hospital to the Jersey City Medical Center.

The Hudson Holdco bid, which had been endorsed by the Christ Hospital Board of Trustees, was roughly $600,000 more than the CHA bid.

Before making his decision, Stern said he was bound by precedent to defer to the board?s endorsement absent objection from the hospital?s creditors. Stern asked for the opinion of about a half-dozen creditors, all of whom said they did not object to Hudson Holdco?s bid.

CHA attorney Ken Rosen made a last-ditch effort to sway Stern, saying the bidding process was ?corrupted? and that the Christ Hospital Board of Trustees made a ?determination? long before last week?s auction that they would side with Hudson Holdco.

Stern responded by saying he found no evidence to back Rosen?s claims.

Paul Hebert, a spokesman for Christ Hospital, said hospital officials are pleased the judge selected the proposal the Board of Trustees and the hospital staff endorsed.

Christ Hospital filed for Chapter 11 bankruptcy protection last month after a proposed acquisition by for-profit Prime Healthcare Services fell through.

In the initial bidding last week, CHA/JCMC emerged with the best and highest offer for the Palisade Avenue hospital, but the Christ Hospital Board of Trustees nonetheless recommended that the hospital be sold to Hudson Holdco. That prompted CHA officials to ask that the bidding be reopened.

After a live bidding process on Friday, Hudson Holdco was deemed to have the best and highest offer.

In its bid, Hudson Holdco says it will operate Christ Hospital as an acute-care facility for at least five years. It also pledges to hire back 100 percent of the hospital?s union staff and 90 percent of its non-union workers.

Jeanne Otersen, spokeswoman for Health Professionals and Allied Employees, the Christ Hospital nurses union, said she?s hopeful Hudson Holdco?s acquisition will be a new beginning for the hospital?s staff.

?Our job now is to make sure that the new owners live up to their commitments,? Otersen said.

In a statement, JCMC spokesman Mark Rabson said JCMC was motivated to bid for Christ Hospital in an effort to keep it open as a nonprofit facility. JCMC?s mission was strengthened by participating in the bidding process, Rabson added.
http://www.nj.com/jjournal-news/index ... _court_awards_christ.html

Buyer for Christ Hospital in Jersey City to be chosen Monday

March 16, 2012, 3:03 AM
By Terrence T. McDonald/The Jersey Journal

The likely new owner of Christ Hospital in Jersey City will be revealed at a live auction on Monday.

The 140-year-old medical facility on Palisade Avenue filed for bankruptcy protection last month, almost immediately after a deal to be acquired by for-profit chain Prime Healthcare Services fell through.

On Monday, an auction at the Morristown offices of Christ Hospital attorneys will decide which bidder will acquire the financially beleaguered medical center.

Among the reported bidders are the Jersey City Medical Center, partnering with Bloomfield-based Community Healthcare Associates; Hudson Holdco, owners of Hoboken University Medical Center and Bayonne Medical Center; and the owners of Meadowlands Hospital Medical Center.

CHA and JCMC officials say what?s at stake is the future of health care in Hudson County.

?Christ has to stay viable for Jersey City to continue to have high-quality health care,? JCMC CEO Joe Scott told The Jersey Journal last week.

Scott said he thinks JCMC can staff about 150 beds at Christ Hospital, in addition to moving JCMC?s pediatric-care staff there and consolidating some other services.

?One hospital, two campuses. That?s our vision,? he said.

Bill Colgan, a managing partner of CHA, noted that the JCMC/CHA bid for Christ Hospital is the only offer that would keep the hospital a nonprofit institution. CHA?s vision of the future of Christ Hospital is similar to the hospital?s current role in the community, Colgan said.

?There?s no talk about any immediate change,? he said.

CHA, which would own Christ Hospital and lease a portion to JCMC, owns two medical facilities: the Barnert Medical Arts Complex in Paterson and the William B. Kessler Memorial Hospital in Hammonton.

Richard Lipski, a Woodcliff Lake-based anesthesiologist whose MHA LLC owns Meadowlands Hospital, said his plan for Christ Hospital is similar to his plan for Meadowlands, which MHA acquired in 2010 from the owners of JCMC for $17.55 million.

Lipski said MHA turned a struggling nonprofit into a successful for-profit hospital, and it can do the same for Christ Hospital.

?We know how to organize, and we hope we can succeed there, too,? he said.

Hudson Holdco did not return requests for comment.

Renee Steinhagen, who heads the nonprofit law center NJ Appleseed, said she favors JCMC?s bid to acquire Christ Hospital. She noted that she hasn?t seen the specifics of the bids.

?I want it to remain a nonprofit operated in the model of the way Jersey City (Medical Center) has been operating,? she said. ?The models of the for-profits that we?re faced with are not models of for-profits that I endorse.?

NJ Appleseed opposed the proposed Prime takeover and Hudson Holdco?s bid for HUMC.

After Monday?s auction, a hearing to confirm the results will be held Tuesday at 2 p.m. in U.S. Bankruptcy Court, 50 Walnut St., in Newark. According to Scott, the bankruptcy judge can accept the winning bid or reject it.

http://www.nj.com/jjournal-news/index ... christ_hospital_in_j.html

Community Healthcare Associates LLC and LibertyHealth System, parent company of Jersey City Medical Center, is one of the partnerships awaiting Thursday's deadline for potential purchasers of the Jersey City hospital, which is in bankruptcy.

Jeffrey Moll, co-founder and managing partner of CHA, said projects like developing Christ Hospital into an efficient, fiscally stable hospital is "what we do," citing the organization's revamping of the former Barnert Hospital, in Paterson, into a medical mall, and the current development of shuttered Kessler Memorial Hospital, in Hammonton, into an ambulatory surgical and acute care center.

"We will purchase the property, including the building in which the hospital is, and we will be the landlord and Jersey City Medical Center will be the tenant," Moll said, describing the planned bid. "In the space of the hospital, they will run a full-service acute-care hospital ? obviously very similar to Christ Hospital and what they're doing ? and they will bring their talents and expertise developed as a nonprofit."

Moll said Jersey City will get roughly six months after moving into Christ Hospital to determine the amount of space in the main building required to operate the hospital, and CHA will then fill the rest of the building and several outbuildings with complementary health care services, such as a nursing home.

Jersey City Medical Center will "figure out what makes the most sense," Moll said. "There's a lot of property ? it's a 15-acre site ? there are a lot of outbuildings on the site, and that's where I think CHA will primarily focus."

Moll said he believes the ownership transition for Christ Hospital would be smoothest to the CHA/LibertyHealth partnership because they plan to keep the hospital nonprofit. Other potential bidders Hudson Holdco LLC and MHA would likely operate the facility as a for-profit hospital.

Jersey City Medical Center CEO says Christ Hospital takeover 'a recipe for disaster,'

Guess who would be the first person to get the ass - No wonder the CEO isn't happy !

What I love about this issue is that the decision to keep the hospital open seems to be taking place in a vacuum, as if there's no objective ways of determining the needed beds for a given population, and what's a reasonable distance from a trauma ER. It seems to be all emotion, not a good way to determine public policy.

Freeholders: Jersey City's Christ Hospital must stay open as acute care facility

Friday, March 09, 2012, 1:42 AM
By Charles Hack/The Jersey Journal

The Board of Chosen Freeholders unanimously passed a resolution tonight in support of keeping Christ Hospital in Jersey City Heights open and operating as an acute care hospital.

Freeholders voted to pass the resolution at their Board meeting at the Administration Building Annex, 567 Pavonia Avenue.

The resolution stated the community hospital has provided an "invaluable and irreplaceable service" to Jersey City and surrounding area.

Last month Christ Hospital filed for bankruptcy in U.S. Bankruptcy Court after the California-based for-profit Prime Healthcare Services withdrew a bid to acquire the hospital.

A request for new bids went out recently to seek new buyers to acquire the hospital.

"We will no longer be accepting the closure of any health facility, especially Christ Hospital," Freeholder Chairman Eliu Rivera said at the meeting. "As long as it continues to provide quality health care for the residents of Hudson County we have no problem, but anyone who wants to build luxury condos or whatever will have a tough fight."

The resolution also supports the aims of the Save Christ Hospital coalition, a group that has opposed the sale of the hospital to a for-profit entity.

The group wants an "open, public process with meaningful community participation" in the reorganization or sale of the hospital and members want the hospital to remain as a health care facility "in perpetuity."

"This is a unique issue," said the group's president Paul Bellan-Boyer, before the freeholders took a vote. "People from all over the county have come together on it, remarkably, because of how important the hospital is."

Freeholder Bill O?Dea predicted "dire" consequences if the hospital were to close.

"We?ve had two hospitals in the city close in recent years, which means we have cut the amount of coverage to 250,00 people," said Freeholder Bill O?Dea.

"The travel time for people that live in this area and people who live in the Heights to the closest acute care medical facility if the hospital (Christ Hospital) were to close would result in deadly and dire results," O'Dea added.

St. Francis Hospital in Hamilton Park closed in 2002 and Liberty Health's Greenville closed in 2008. St. Francis was converted into luxury condominiums and the former Greenville hospital is set to become a charter school.

http://www.nj.com/hudson/index.ssf/20 ... s_jersey_citys_chris.html

Dead on arrival - What sank the Christ Hospital sale?

by E. Assata Wright - Reporter staff writer
Feb 05, 2012

For Christ Hospital President and CEO Peter Kelly, last week began with a letter to Jersey City Heights residents touting the benefits of the hospital?s pending sale to a California-based company that ? he promised ? would invest millions in the medical facility and save it from closure.

By the week?s end, the hospital?s prospective buyer had backed out of the deal, and the hospital?s board of directors had agreed to file for bankruptcy, if necessary.

Christ Hospital is currently one of only three hospitals in Hudson County that remain non-profit, and one of two hospitals remaining open in Jersey City. Three other hospitals in the county have been sold to private owners, which sometimes resulted in their not accepting as many insurance plans as before.

For residents and community activists who for months questioned the track record of the prospective buyer of Christ Hospital, last week?s turn of events was hailed as something of a victory.

Just a few months ago, it was announced the hospital had accepted a purchase offer from Prime Healthcare Services. A company that already owns 14 for-profit hospitals in California, Prime had agreed to buy Christ for $15.7 million and had vowed to dedicate another $35 million for capital improvements.

But almost immediately, concerns were raised about Prime after it was learned that the company was the target of multiple investigations into its medical and business practices. This, coupled with the fact that Christ and Prime wanted the hospital sale to be expedited and completed by Dec. 31, 2011, led officials in New Jersey to closely scrutinize the deal. The added scrutiny may have proved too much for a company that tried to remain in the background while Kelly championed the deal to skeptics.

This past Wednesday, Feb. 1, Prime backed out, saying, ?Out of respect for the wishes of those in the Hudson County community that Christ Hospital remains as a not-for-profit hospital, we respectfully withdraw our bid to purchase the hospital.?

The future of the hospital is now in limbo.

?It?s up to Christ?s Board of Trustees to save the hospital now,? said Ann Twomey, president of the Health Professionals and Allied Employees (HPAE), the union that represents 400 registered nurses at Christ Hospital. ?They?re in a difficult position because they spent a lot of time on a problematic buyer. Many people predicted this sale would never go through.?

Other prospective buyers have made offers to purchase the facility, but whether Christ will consider them is unclear.

What killed the deal?

Early last week, when the deal to sell to Prime Healthcare Services was still alive, Peter Kelly wrote to residents in the Heights, asking them to ?pledge [their] support for this sale? by signing an online petition on the hospital?s web site.

?We are confident that the sale of Christ Hospital to Prime is in the best interest of our residents,? Kelly wrote. ?We share a common goal ? to sustain our community hospital so that we can continue to serve each and every one of you.?

These letters were still arriving in mailboxes when the deal died days later. So what led Prime to back out?

Some observes said the answer may lie in questions asked by the state attorney general and the New Jersey Department of Health and Senior Services, two of the agencies charged with reviewing the details of hospital sales and transfers.

?Certain aspects of this sale were being scrutinized in a way that probably made Prime uncomfortable,? one health care industry executive speculated.

Jeanne Otersen, spokesperson for HPAE, agreed. ?If you look at the questions that were being asked, especially by the attorney general, I think they?re very informative.?

Among the requests made by DHSS were ?track record reports for all of the listed facilities owned by Prime Healthcare for the preceding 12 months.? DHSS staff specifically requested that these documents ?come from the California state agencies responsible for licensing those facilities and indicate the degree of compliance with all state and federal requirements.?

Several California agencies either are or have investigated Prime Healthcare. Most recently the California Bureau of Investigation launched an inquiry into the company?s Medicare billing practices.

The DHSS also wanted to know ?the number and percentage of patients [who] were admitted through the Emergency Department over the past two years, [and] the number and percentage who were out-of-network in terms of insurance status.? In addition, DHSS staff wanted to know how Prime?s in-network/out-of-network emergency room admissions compared to those of other California hospitals.

Prime was investigated for admitting large numbers of out-of-network patients to its emergency rooms as a way to boost company profits.

Last year, California Attorney General Kamala Harris denied Prime?s application to buy Victor Valley Community Hospital. Publicly, Harris stated the sale would ?not be in the public interest.? New Jersey?s DHSS asked to see the full rationale she provided to Prime officials.

New Jersey?s attorney general also had questions about the sale. Specifically, the attorney general asked whether Kelly already had a contract with Prime to continue working for Christ after the sale was approved. Kelly has publically stated that he would remain at Christ after the sale was finalized, but insisted he did not yet have a contract with Prime. But the attorney general planned to make its approval contingent on seeing the details of any work offered to Kelly.

Oddly quiet about other offers

As questions about Prime?s track record continued to be raised by residents, public officials, and local newspapers, Prime CEO Lex Reddy remained completely silent and in the shadows. Requests for interviews were either ignored or were ?answered? by referring the reporter to old press releases on the company web site.

With Reddy absent from the debate surrounding the sale, this left Kelly to shoulder the responsibility of defending the sale and Prime?s track record, a role Kelly readily accepted ? at first. He was accessible for interviews. He appeared at a City Council meeting in October to ask the members not to pass a resolution opposing the sale. (The council ignored his plea and unanimously passed the resolution anyway.) He participated in a December community forum of the sale.

Eventually, though, Kelly withdrew from public discussions of the sale ? particularly when seemingly better offers were put on the table.

In late December, Hudson Hospital Holdco LLC? which already owns Bayonne Medical Center and Hoboken University Medical Center ? made a bid to buy Christ for $91.6 million. This offer also came with $10 million in emergency financing to help keep the hospital open to allow the Christ board an opportunity to explore purchase options from several prospective buyers.

Christ flatly rejected Holdco?s offer days after it was made.

LibertyHealth System, which owns Jersey City Medical Center, has made two offers to buy Christ, the most recent of which was a combined bid with Community Healthcare Associates (CHA) for $104.3 million.

These bids from Holdco and LibertyHealth/CHA dwarfed Prime?s $15.7 million offer. Still, Kelly remained committed to the Prime deal, leading some to speculate that the company had made him some very lucrative promises.

?You can?t have a financial gain from this kind of hospital conversion,? said one observer who believes Kelly may have navigated the agreement with Prime without much guidance from Christ?s Board of Trustees.

What?s next?

Last Wednesday the Christ Hospital board authorized a bankruptcy, should such a move be necessary to keep the facility open.

A statement issued on behalf of Christ?s board of trustees read, ?At this meeting the Board of Trustees of Christ Hospital unanimously approved authorizing the filing Chapter 11 reorganization ? if necessary ? in order to maintain financial stability and to preserve its commitment to its patients. A reorganization would ensure that Christ Hospital continues to serve the community as an acute care facility here in Hudson County.?

Spokesmen for Hudson Holdco and LibertyHealth said their offers are still on the table.

?We made an excellent offer, which still stands,? said Holdco spokesman Spencer Baretz. ?The ball is in their court.?

Mark Rabson, a spokesman for Jersey City Medical Center, said in a statement, ?Our first concern is to [ensure] Christ Hospital continues to operate and provide uninterrupted service to the people of Jersey City and Hudson County. We stand ready to work closely with the leadership at Christ Hospital, the board of trustees, the medical staff, the Department of Health and Senior Services, and the community to facilitate the process.?

Both offers include up-front cash financing for the hospital that would provide money for operating expenses until the purchase is complete.

Christ spokesman Paul Hebert refused to answer whether Christ will entertain either of these offers. Three attempts to contact Kelly for a response to Prime?s decision were not answered.

?The board has a fiduciary responsibility to get the best deal for the hospital and keep within its mission,? said Otersen. ?That means they have to move quickly. They have to be smart. They have to be transparent. Everybody has to keep the pressure on the board to do this differently from here on.?

California health-care chain withdraws offer to buy Christ Hospital in Jersey City

February 02, 2012, 3:03 AM
By Terrence T. McDonald/The Jersey Journal

The California health-care chain seeking to purchase Christ Hospital has pulled out of the deal, ending a six-month clash between hospital officials who said the deal was necessary to keep the hospital open and community groups that feared the proposed sale would lead to limited health-care options for Hudson County residents.

Christ Hospital CEO Peter Kelly said Prime Healthcare Services withdrew its bid ?out of respect for the wishes of? the community members who objected to a takeover of the nonprofit Palisade Avenue hospital by a for-profit entity.

?I still believe it would be a good thing for the hospital, for the community and for the state,? Kelly said yesterday. ? ?What now?? is ... a very good question.?

Opponents of the proposed sale were pleased with the turn of events, saying the acquisition would have been a ?bad deal? for patients. Paul Bellan-Boyer -- who led Save Christ Hospital, a local group formed to oppose the sale -- said the deal ?did not withstand the light of public scrutiny.?

?With other potential buyers, and the hospital?s financial fragility, it is important that the next steps be in the right direction,? Bellan-Boyer said in a statement.

Kelly announced the proposed sale last July, saying it was the best way for the hospital to survive in the near and long term. He said Christ ended $4 million in the red in 2010, even including a $7 million state grant.

Opponents immediately attacked Prime?s record in California, where reports say it is being investigated for possible Medicare fraud. Sources say a Jan. 25 letter from Deputy Attorney General Jay A. Ganzman to a lawyer representing Christ Hospital could hold some clues to the real reasons for Prime pulling out.

The 10-page missive lists dozens of questions and concerns that state officials had about the deal, including the details regarding Prime?s proposal to sell the hospital?s property to Medical Properties Trust, an Alabama-based real-estate firm that would have then leased the land back to Prime.

An appraisal of Christ Hospital by a firm that received an ?exclusive leasing assignment? to a Prime-owned shopping center in Arizona also raised eyebrows.

Kelly denies that Prime withdrew its bid because of the state?s questions.

?We provided all the information always readily,? Kelly said, adding that the hospital knew from the beginning that the state?s approval process involved ?tough questions.?

In partnership with Community Healthcare Associates (CHA), the Jersey City Medical Center made a $104 million bid for Christ Hospital last week.

JCMC spokesman Mark Rabson said in a statement yesterday that the JCMC?s purchase proposal is built on four tenets:

Continuing to operate Christ Hospital as a nonprofit acute care community hospital for at least 30 years; creating jobs while keeping the current labor unions in place; building a positive relationship with medical staff; and expanding Christ Hospital?s role as a health-care leader and educator in Jersey City, Hudson County and New Jersey.

Jersey City's Christ Hospital rejects $91M purchase offer from owner of Bayonne, Hoboken medical centers

December 28, 2011
By Travis Fedschun/The Jersey Journal

The owner of two Hudson County hospitals, Hudson Hospital Holdco LLC, is targeting a third hospital in the county.

In a letter sent to Christ Hospital CEO Peter Kelly dated Dec. 23, Hudson Hospital Holdco LLC, the parent company of Bayonne and Hoboken medical centers, made what it termed an ?initial? offer of $91.6 million for the debt-ridden Jersey City hospital.

Counted in the $91.6 million is $35 million for working capital and capital improvements. The remaining $56 million would be used to pay off Christ Hospital?s debt, bills and employee pension obligations.

The offer was quickly rejected by Christ Hospital officials, who are in the process of selling the hospital to California-based Prime Healthcare Services for $15.8 million. The terms of the sale are currently under review by the state Department of Health and Senior Services.

?Having received several offers over the past year, Christ Hospital is moving forward with the asset purchase agreement by Prime Healthcare Services, which we believe is in the best interests of the hospital and the community we serve,? Paul Hebert, a spokesman for Christ Hospital, said in a statement.

In the letter to Kelly, Hudson Hospital Holdco (HHH) also offered a $10 million loan to ?provide a necessary lifeline to help keep the hospital open.?

But the loan would come with a catch Christ Hospital would have to allow HHH and others to enter into the bidding process for the hospital.

HHH officials also said in the letter that they were ?in discussions with LibertyHealth,? the parent company of the Jersey City Medical Center, to see if the two could ?participate in a transaction through a joint venture.?

Joseph Scott, president and CEO of LibertyHealth said yesterday that although representatives from the two groups did meet once on the topic of Christ Hospital, there was never any talk of a potential joint venture.

As HHH has done with Bayonne Medical Center and Hoboken University Medical Center, Prime plans to change the nonprofit Christ to a for-profit business. Scott reiterated he does not support that business model.

PBS: Possible new owners of Christ Hospital eyed for possibly bilking Medicare for millions

Tuesday, December 20, 2011, 11:45 AM
By The Jersey Journal


NewsHour on PBS this week examined the controversial billing practices of Prime Healthcare Services, a California hospital chain that is seeking to purchase Christ Hospital in Jersey City.

Critics of the sale say that Prime's billing practices warrant further scrutiny. Christ Hospital CEO Peter Kelly, meanwhile, has vouched for Prime, and says the sale is the only way to keep the financially strapped medical center open.
NewHouse partner The Center for Investigative Reporting conducted a year-long probe into the chain's bills to Medicare. See the video below.

http://www.nj.com/hudson/index.ssf/20 ... le_new_owners_of_chr.html

State officials won't approve pending sale of Christ Hospital

December 16, 2011, 3:00 AM
By Terrence T. McDonald/The Jersey Journal

State officials will not approve the pending sale of Christ Hospital in Jersey City to a California for-profit healthcare chain by the end of the year, according to a letter from the state Attorney General?s Office to a city official.

Prime Healthcare Services, the California chain, told Christ Hospital CEO Peter Kelly in an Aug. 12 letter that it wanted the $15.8 million sale completed by Dec. 31, 2011, or else it could ?terminate? the agreement to buy the Palisade Avenue hospital.

But state Deputy Attorney General Jay A. Ganzman noted in a Nov. 22 letter to City Clerk Robert Byrne that the state approval process for the pending sale can take anywhere from 90 to 120 days, or more. Byrne had sent the Attorney General a resolution approved by the City Council expressing its opposition to an expedited sale.

?Given that it is already mid-November and the application has not yet been deemed complete, the process will not be completed before the end of this year,? Ganzman wrote.

This summer, Kelly announced the proposed sale, saying it would be the financially beleaguered hospital?s ?salvation.? At a packed community meeting Wednesday night, Kelly said if the sale does not go through, the hospital?s future is in doubt.

Critics of the deal have alleged that Prime?s controversial track record in California the FBI is reportedly investigating the chain?s billing practices warrants extra scrutiny. A provision in Prime?s agreement with Christ Hospital to sell the hospital?s property to an Alabama real-estate trust and then lease the property back has also raised eyebrows.

Hospital spokesman Paul Hebert said the Dec. 31 deadline was ?more of an internal goal? for Christ Hospital. Whether this deadline is met does not affect the sale, Hebert said.

Potential buyer plans to sell Christ Hospital in Jersey City to an Alabama-based real estate investment trust

December 14, 2011
By Terrence T. McDonald/The Jersey Journal

The prospective new owner of Christ Hospital plans to sell the Jersey City hospital?s property to an Alabama-based real-estate investment trust, and then lease back the land for $7 million annually, according to documents obtained by The Jersey Journal.

The lease-back plan, which Christ Hospital CEO Peter Kelly said is still just an idea, was revealed in a 92-page document the hospital filed with the state in September.

Christ Hospital officials hope the state will OK its sale to California-based Prime Healthcare Services for $15.8 million.

If both the sale and lease-back plan go through, Medical Properties Trust, the Alabama firm, would own three Hudson County hospitals. Earlier this year, it purchased Bayonne Medical Center for $58 million and Hoboken University Medical Center for $70 million.

MPT is intimately involved with Prime, a controversial healthcare company that operates 14 hospitals on the West Coast. Eleven of those are owned by MPT.

According to MPT?s Securities and Exchange Commission filings, revenue from Prime, including rent and interest from loans, accounted for roughly 30 percent of MPT?s total revenue for January through September 2010 and during the same time period this year.

The relationship between Prime and MPT worries critics of the pending sale.

?The contract is all private and proprietary, so that no one has the right including the state, at this point to see what is in that lease-back arrangement,? said Jeanne Otersen, spokeswoman for Health Professionals and Allied Employees. The labor union represents the nurses at Christ Hospital.

Otersen said she?s also concerned that the terms of the pending deal, which Prime wants state officials to OK by Dec. 31, call for Prime to run Christ Hospital as an acute-care facility for a minimum of five years.

?The property could be sold off in five years for condos, it could be made into a medical mall,? she said. ?In five years what happens??

A Prime spokesman did not return a request for comment.

When he announced the impending sale to Prime, Kelly stressed that Prime is a hospital operator, not a ?venture capitalist or real-estate firm.?

Last week, he called the lease-back proposal ?pretty standard practice,? comparing it to a mortgage that would allow Prime to raise the tens of millions of dollars it would need to implement capital improvements at Christ Hospital.

Even if MPT ends up purchasing the hospital and its land from Prime, Kelly said, that doesn?t mean the hospital could be easily shut.

?The state is involved in closures, too, to make sure it?s appropriate and that it?s done correctly,? he said. ?There are multiple checks and balances here, and people need to understand that.?

Christ Hospital and state officials will appear tonight at 7 o?clock at a community meeting at Abundant Joy Christian Center, 137 Bowers St., to discuss the sale.

There will be a community meeting about the proposed sale of Christ Hospital:

WHO: Community At Large Meeting
WHAT: Sale of Christ Hospital
WHEN: Wednesday, December 14, 2011 at 7pm
WHERE: Abundant Joy Christian Center (137 Bowers Street, between Central and Summit).
WHY: Invited guests include the Board of Director's of Christ Hospital, NJ Attorney General Paula T. Dow, NJ Commissioner of Health & Senior Services Mary E. O'Dowd.

This is a very important meeting because, based on their background, the proposed expedited sale to Prime Health will have an adverse effect on the city as a whole.

Since the closing of Greenville hospital in 2008, the sale of Bayonne hospital in 2008 and the sale of Hoboken hospital in 2011, should this sale go through in 2012 that will leave the Jersey City Medical Center as the only non-profit hospital servicing Bayonne, Hoboken, Union City and Jersey City.

Please come to the meeting and share the information with your neighbors. Check out the following website created by Paul Bellan-Boyer to get more information and download literature: www.savechristhospital.org or,

the Facebook page:
https://www.facebook.com/savechristhospital Thanks!

Who: Hilltop Neighborhood Association
What: Christ Hospital Sale
When: 7:30PM, December 12th
Where: St Joseph's Church Basement
Why: We are going to have representatives from the nurses union and the postal union at the meeting to answer questions about the pending sale of Christ Hospital and the proposed closure of the Post Office on Newark Ave.

On behalf of the residents of the Hilltop Neighborhood Association, I want to voice our strong opposition to the current handling of the Christ Hospital situation.

First and foremost, the fact that the hospital has been mismanaged does not mean that Christ Hospital doesn?t provide a vital service to the residents of Jersey City. With the closure of St Francis and Greenville hospitals, Christ Hospital is one of two remaining major medical facilities in this city. The other, the Jersey City Medical Center, has already stated that it does not have enough capacity to serve all of Jersey City by itself in the event Christ Hospital were to close.

Second, Prime Healthcare Services does not strike me as an organization with Jersey City?s best interests in mind. The for-profit Prime has been the target of several lawsuits alleging it has committed Medicare and Medicaid fraud by manipulating which patients are seen and their diagnoses to maximize their reimbursement rates from the government. Considering the employees at Christ Hospital have twice saved my life since I moved to Jersey City 40 years ago, it makes me sick to think Prime places their bottom line over the well being of their patients.

Third, Christ Hospital?s request for an expedited review of the sale from the state looks like a setup for a bait-and-switch where Prime would sell off all the hospital?s assets after a transaction closed. I have already heard that several developers are waiting in the wings to cash in on Christ Hospital?s ?prime? real estate at the top of the Palisades overlooking downtown and Manhattan.

I understand that Christ Hospital is in trouble, and a sale to a larger and more financially stable organization is one possible way out of the current situation, but I see no benefit to rushing through a transaction to an ethically dubious organization from out of state.

RICH BOGGIANO
PRESIDENT, HILLTOP NEIGHBORHOOD ASSOCIATION

CEO says Jersey City hospital's survival dependent on sale to California company

November 20, 2011, 3:50 PM
By Terrence T. McDonald/The Jersey Journal

Depending on who is asked, the pending sale of Christ Hospital in Jersey City to a for-profit healthcare company will save the community, or help to destroy it.

Christ Hospital officials announced this summer plans to sell the 139-year medical facility to Prime Healthcare Services, a California chain that operates 14 acute-care hospitals. The sale, they said, would be critical to hospital's survival.

But opponents of the pending sale -- labor unions, some elected officials, community groups -- point to Prime's track record in California, where it has been accused of submitting fraudulent bills to boost Medicare payments. U.S. Rep. Bob Filner, who represents San Diego, has asked federal officials to investigate the company for "possible systematic fraud."

Christ Hospital CEO Peter Kelly has stressed that there's nothing Jersey City residents should worry about. Prime officials were upfront about the charges leveled against them when they offered to buy Christ Hospital, Kelly said in an interview last week, adding the charges stem from "misinformation."

"I've spent time in their hospitals," he said. "They're a legitimate acute-care provider ... what they say they do, they do."

The sale would be the nonprofit hospital's "salvation," Kelly added. Prime has pledged to spend $30 million in upgrades to Christ Hospital, which ended last year $4 million in the red even with an $11 million state grant, he said.

"It's about preserving the institution," Kelly said.

Opponents of the pending sale feel otherwise. State watchdog New Jersey Citizen Action launched a petition drive last week to draw scrutiny to the impending sale, saying they want to "save Christ Hospital."

"It's our hospital," said Paulette Eberle, the group's co-chair and a Jersey City resident. "It's been a pillar of the community for nearly 140 years. We need to make sure decisions are made with the input of residents instead of behind closed doors."

Prime and Christ Hospital officials are scheduled to meet with hospital staff on Dec. 9, according to a hospital source.

Jersey City Medical Center CEO says Christ Hospital takeover 'a recipe for disaster,' offers to buy it

October 27, 2011
By Terrence T. McDonald
The Jersey Journal

Jersey Journal file photoLibertyHealth CEO Joseph Scott said last night that he'd be interested in purchasing Christ Hospital and operating it as a nonprofit medical center.

The CEO of the Jersey City Medical Center said at last night?s City Council meeting that the pending sale of Christ Hospital to a for-profit California healthcare chain is a ?recipe for disaster,? and said he would be interested in taking over the financially strapped hospital himself.

JCMC CEO Joseph Scott said the medical center is strained due to the recent takeover of Bayonne Medical Center and Meadowlands Hospital, both former nonprofits, by for-profit institutions. The impending takeovers of Hoboken University Medical Center and Christ Hospital by for-profit companies will create a healthcare crisis in Hudson County, which would then only have two nonprofit medical centers, Scott said.

He compared his fears of the Christ Hospital takeover to the city?s stance against the Spectra Energy natural-gas pipeline.

?Just like we?re concerned about the pipeline going through Jersey City and blowing up in our face, health care is going to blow up in Hudson County,? Scott said.

Christ Hospital announced this summer that it was in talks with California-based Prime Healthcare Services, a healthcare company that has been the subject of allegations that it improperly bills insurance companies to boost its profits.

Scott said last night that JCMC has a ?business partner? and is willing to takeover Christ Hospital, and operate both hospitals as nonprofit medical centers. JCMC spokesman Mark Rabson identified the partner as Bloomfield-based Community Healthcare Associates Inc.

That company describes itself on its website as a ?leading healthcare real estate owner and developer in New Jersey.? It purchased the former Barnert Hospital in Paterson in 2008, and with JCMC placed a bid to purchase the Hoboken University Medical Center last year.

At last night?s meeting, Christ Hospital CEO Peter Kelly was asked by a council member whether any entity aside from Prime had put in a bid to purchase the hospital.

Kelly said he views Prime?s offer as optimal because it offered an ?infusion of cash? that Christ Hospital needs to survive.

The council voted unanimously last night to oppose an expedited sale of Christ Hospital. Kelly wrote to state officials recently asking the sale be OK'd by the end of this year.