The Hoboken Hospital Authority wants CarePoint Health out of Hoboken University Medical Center and is willing to offer plenty of incentives, like a sweet tax deal, to find another operator.
The Hoboken Municipal Hospital Authority officially began looking for an operator to replace CarePoint Health last December, according to a document it quietly released last year.
The Request for Indications (RFI), obtained by The Jersey Journal through an Open Public Records Act request, shows a comprehensive effort by a city board to repair the hospital’s ownership, which financial records show lost nearly $38 million in 2020 during the height of the coronavirus pandemic.
The RFI tempts applicants with a possible Payment in Lieu of Taxes (PILOT) agreement, support in applications to build additions or improve the hospital, assistance in purchasing outpatient or office space and permission to access municipal parking – while showing no confidence in CarePoint Health’s plan for its future.
of The RFI dated December 20, 2021 calls for hospital operators interested in operating Hoboken University Medical Center to contact the board. The hospital authority hired consultant Raymond James to help with the RFI.
The document posits three ideal scenarios for the hospital’s future: one, that CarePoint donates its ownership interests to another nonprofit operator; two, that CarePoint sell its ownership to a nonprofit or for-profit operator; or three, to receive the Hoboken Municipal Hospital Authority the hospital and find an operator to manage it.
A fourth option, which says CarePoint Health will continue to operate it as a nonprofit, was stated and immediately dismissed as “impractical.”
“The process of forming, licensing and financing a new not-for-profit entity to operate HUMC and other hospitals in the CarePoint network is long and difficult,” RFI says. “HMHA believes CarePoint and the greater Hoboken community can benefit from CarePoint investigating the possibility of an existing health care system taking over its operations.”
CarePoint has since sued the hospital authority, alleging that its RFI interfered with partnerships it was developing with other medical operators and disclosed financial information it did not disclose. The RFI includes financial data for the hospital for the years 2015 to 2020.
Hudson County Superior Court Judge Mary Costello said in April that the hospital authority must disclose who received the RFI and destroy any confidential information it has about CarePoint Health. But in June, the court reversed the request, saying the hospital authority must return the confidential information to CarePoint instead of destroying it.
The RFI also stated that the city could exercise eminent domain to purchase the Willow Avenue property to help facilitate the sale of the hospital. The land is currently under contract with Hudson Regional Hospital. Recently, the city took a step in that direction by planning an appraisal of the hospital property.
It is unclear how many responses the RFI provided and from whom. A lawyer for the hospital authority declined to comment because of the pending litigation.
The RFI outlines the criteria for what a management agreement with a new operator might include. In addition to basic expectations such as acceptance of government medical insurance and a “commitment to provide certain key services,” it requires a minimum 10-year management commitment.
Financial charts in the document show the hospital operated at a loss of $9.4 million in 2019 and $37.9 million in 2020. While it had 858 employees in 2019, it had just 741 the following year, according to a chart the document cites as coming from a “proprietary database of third parties”.
Hoboken revived its hospital authority in late 2020 after CarePoint said it planned to exit the three Hudson hospitals it runs: Hoboken’s, Christ Hospital in Jersey City and Bayonne Medical Center.
CarePoint Health announced plans to stay and become a nonprofit last October. but recently it converted to non-profit status without state approval.
Hudson Regional Hospital in Secaucus, meanwhile, has indicated it wants to be the owner-operator of the Bayonne and Hoboken hospitals.
The Hoboken Municipal Hospital Authority Board consists of six members: Council President Michael Russo, who is an appointee of Mayor Ravi Bhalla, and Heather Saydah, Rajiv Goswami, Toni Tomarazzo, Keith Barksdale and Babette Cecotti.
The board was created in 2006 when the city took ownership of the former St. Mary’s Hospital, assuming millions of dollars in debt and finding an operator. In 2012 the operations were sold to a group led by Vivek Garipalli and became part of CarePoint Health.
Garipalli made a quick profit by selling the land at both Hoboken University Medical Center and Bayonne Medical to a real estate investment trust in leaseback deals. The land was later sold to Alaris Health founder Avery Eisenreich.