The Battle of Bayonne: Turf Wars Over Satellite Emergency Departments

Two hospital systems seek to expand coverage, tap underserved communities in Hudson County

RWJBarnabas Health was granted permission to open a satellite emergency department (SED) at this building in Bayonne.
Surrounded on three sides by parts of Upper New York Bay and fenced in by the New Jersey Turnpike on the fourth, Bayonne — with roughly 65,400 residents — feels like a small town far from the rest of Hudson County’s urban boom.

But in the past few years, this quiet, working-class community has become ground zero for a battle between two prominent healthcare organizations seeking to expand their reach by building detached emergency facilities.

These satellite emergency departments (SEDs) can provide urgent care on an outpatient basis, or connect patients to existing hospitals if they need long-term treatment. While costly to build and staff, and not always successful, SEDs can also benefit hospitals by serving as another “front door” for potential admissions, a significant source of revenue.

Both RWJBarnabas Health, New Jersey’s largest provider group, a not-for-profit with more than a dozen hospitals statewide and thousands of providers, and CarePoint Health, a for-profit company that operates three acute-care facilities and other services in Hudson County, have sought state permission to build SEDs in the area.

Unprecedented interest

Between them, some 10 sites are under discussion and applications have been filed for at least a half dozen — an unprecedented level of interest, according to state officials. In the past decade and a half, New Jersey regulators have approved a total of nine SEDs statewide. They have yet to turn down a request.

And while the state has granted approval for one request from Barnabas, to open an SED in Bayonne, at least a half-dozen others submitted by CarePoint are still pending. State officials declined to say if the Barnabas approval will affect their decision on the CarePoint submissions.

The dispute has also grown to include other powerful stakeholders. Community advocates and two-dozen clergy members associated with the National Action Network, a justice advocacy organization led by Rev. Al Sharpton, have raised concerns about the lack of healthcare services in one neighborhood central to the discussion. They have also urged the state to side with CarePoint.

Backing Barnabas

The Barnabas application was backed by a trio of health insurance companies, a variety of elected officials, and hundreds of people who signed a petition to support the Bayonne SED, according to state documents.

In fact, Barnabas Health president and CEO Barry Ostrowsky told NJ Spotlight last year that Horizon Blue Cross Blue Shield, the state’s largest insurance company with 3.8 million members, had encouraged his organization to construct a free-standing emergency facility as a way to connect more Horizon patients in the area with providers that are part of its network.

CarePoint has drawn fire from insurance companies for its reluctance to join their networks, a contractual arrangement designed to trade lower payments for higher patient volumes. CarePoint has defended this out-of-network strategy as a necessary business decision in its quest to revive financially struggling hospitals in a growing urban area.

This situation led CarePoint to challenge Horizon in court for an alleged $76 million in unpaid claims. Reports surfaced last week that the two may soon come to an agreement that brings CarePoint facilities into Horizon’s insurance network — something neither side disputed. Horizon declined to comment on the SED matter for this story.

Barnabas’ grand opening

On July 24, the state Department of Health granted Barnabas permission to open an SED in a sprawling new building it has constructed in Bayonne. Clinical care would be connected to Jersey City Medical Center, the organization’s only full hospital in Hudson County. The facility — expected to see a ribbon cutting in the weeks to come — is five blocks from an existing emergency room attached to the local community hospital, Bayonne Medical Center, which is owned by CarePoint.

In its November application, RWJBarnabas — the result of a 2015 merger — said the SED in Bayonne would help alleviate overcrowding at the JCMC emergency room and provide new healthcare options for residents in the Greenville section of Jersey City, who now have few options for medical care. In 2008, JCMC closed Greenville Hospital, a community hospital it operated there, which had served patients for more than a century but had fallen on hard times.

In approving the waiver for Barnabas, the DOH essentially overruled pleas from CarePoint to block the Bayonne SED, which it feared would cut into business at Bayonne Medical Center. CarePoint presented its own data to show there is no need for additional emergency services in Bayonne and argued that such a facility is not easily accessible to patients in Greenville. Barnabas has a responsibility to first exhaust all options for an SED location in Greenville. CarePoint urged the state in a January letter that “implored” regulators to deny the JCMC application for Bayonne.

Skeletal services

The former Greenville Hospital site reopened a few years ago and now provides some skeletal services, which Barnabas has pledged to sustain. But the organization has said the building does not have the capacity to support an SED at that location. Instead, the organization looked south, to Bayonne, and in late 2014 began the process to obtain a waiver and other approvals from the department to locate a remote emergency room in another location. (The campus for the new facility, which will offer a range of services, occupies much of the block southwest of Broadway and 24th Street in Bayonne.)

“RWJBarnabas Health is committed to improving health care for New Jersey residents,” the organization said in a statement. “We strongly support enhanced access for quality care for all of Hudson County, including Bayonne and the Greenville section of Jersey City.”

“We continue to move forward with our plans to expand medical services — including the Satellite Emergency Department at the new Bayonne facility — in the near future, and remain steadfastly committed to providing health care services through our Jersey City Medical Center at Greenville facility as well,” the statement continued. “Our services at Greenville as well as the soon-to-be-opened Bayonne facility promise a depth of services and activity which will generate access to high quality care throughout Hudson County.”

SEDs’ role in maintaining local care

In New Jersey, SEDs have traditionally been used to sustain a certain level of local emergency care after a community hospital closes. Regulation requires they be located “in as close proximity to the closed full service emergency department as possible.”

But hospitals can also ask the state to waive this requirement if they can “demonstrate to the satisfaction of the Department that the proposed location will serve to eliminate or substantially mitigate problems of access to appropriate emergency care.” The state considers emergency room data, hospital-volume trends, and patient preference, among many other factors, but geography is not part of the picture in assessing waivers.

To underscore its point about access, CarePoint submitted its own waiver request in January to build an SED in Greenville to address the need it said the Barnabas facility in Bayonne couldn’t meet. The organization is seeking to build a remote emergency operation in Greenville itself, about 14 blocks south of the former Greenville Hospital site on John F. Kennedy Boulevard. The SED would be linked to CarePoint’s Christ Hospital, about six miles away in Jersey City; a DOH representative said the waiver request was under review.

“By providing blended data of Bayonne and Greenville, an impoverished and largely minority section of Jersey City that (JCMC) abandoned nine years prior, they are trying to make the Department believe that the population in the two areas is the same,” CarePoint said in a letter to the state. According to its own study, CarePoint noted, “problems of access do not exist in Bayonne but instead exist ONLY in Greenville.”

More SEDs on way?

And between January and March, CarePoint officials said they have submitted applications for a half-dozen other SEDs at various locations in Hudson and Bergen counties; all would connect with the organization’s local hospitals, Bayonne Medical Center, Christ Hospital, and Hoboken University Medical Center.

If the state will grant a waiver based on a hospital system’s claims that there is a need for additional care, then they can demonstrate a need for each location, CarePoint insists, a situation it said could have significant impacts statewide in the future. The organization said it is prepared to spend tens of millions of dollars if these facilities are approved.

“CarePoint believes deeply in the principles of population health management,” said Kirat Kharode, the company’s executive vice president and chief strategy officer. “Our Satellite Emergency Departments will help address significant ACTUAL health care needs in Northern New Jersey by improving quality and reducing costs through appropriately enhancing access to care.”

Until it granted Barnabas the SED waiver for Bayonne – a separate licensing process is still pending – the DOH had approved eight satellite emergency facilities since 2004, according to a search on the department’s website. All but two are located in South Jersey or in shore counties. The most recent was in December 2014, when officials gave Virtua Health System permission to close its West Jersey Hospital in Berlin, a rural Camden County town, and open a remote emergency department. The department hasn’t OK’d a waiver request since 2010, when Lourdes Health System worked with Deborah Heart and Lung Center to open a new emergency site in Browns Mills, Burlington County.

According to the DOH approval of the Bayonne SED, based on data submitted by Barnabas and its own analysis, the new emergency facility there will serve an important need. The JCMC emergency room was designed to handle 57,000 visits annually, but regularly treats more than 80,000 annually, with more than a third coming from Bayonne and Greenville, according to the Barnabas application. The overcrowding is squeezing out vulnerable patients: nearly 4 percent of Greenville residents and more than 3 percent of Bayonne dwellers leave the ER without treatment, it said.

But that argument didn’t wash with representatives of the National Action Network, who wrote to state Health Commissioner Cathleen D. Bennett in late June to raise their concerns and request a meeting to discuss what they called a “healthcare crisis” in Jersey City and Hudson County in general. They noted the county’s high rate of premature death, a high teen birth rate, poor management of chronic diseases and a “near outbreak level” of sexually transmitted diseases.

“If JCMC cares so much about the future of community healthcare in New Jersey they should be building new services in Greenville, not building an emergency department that is not needed in Bayonne,” the clergy members wrote.

A spokesperson for the NAN said last week the group had yet to receive a response from the state.

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