Sale of Troubled Meadowlands Hospital Advances

Lilo H. Stainton | October 11, 2017 | Health Care
Public hearing on transfer of for-profit facility scheduled for October 19

New Jersey officials have advanced a potential deal to sell Meadowlands hospital some 15 months after a New York developer first submitted an application to purchase the struggling for-profit facility.

No formal decision has been made on the possible sale, but the Department of Health found the application to be complete from Yan Moshe, a Long Island man who also owns a plastic surgery center in Hackensack. Moshe has offered $12.2 million for the Secaucus hospital.

The review has now been passed to the State Health Planning Board, which will accept comments in writing and during a public hearing scheduled for October 19 in Secaucus, before eventually making a recommendation to the state health commissioner. The commissioner then has four months to make a final decision; the department can place conditions on the deal at several points during the process, officials said.

Reaping the benefits

Meadowlands Hospital and Medical Center — which NJ Spotlight wrote about in a series that won a 2017 Edward R. Murrow Award for investigative reporting — has had a troubled history, dating back to its sale to the current ownership group in 2010. Key owners have invested millions in what was a near-bankrupt facility, but have also reaped millions through payouts and transactions with other businesses they control.

Today, the 204-bed hospital continues to struggle financially, with a low patient volume and poor quality scores in certain areas, including maternity care. The owners have launched a number of unorthodox business models to boost revenue — including an effort to attract Russian mothers who would pay cash to give birth at the facility — and have faced federal tax liens and state fines for failing to file required financial disclosures.

State still waiting

The state is still awaiting annual reports for 2014, 2015, and 2016, officials said; it is not clear how this could impact the potential sale, since the DOH said the review process focuses on the financial fitness of the applicant, not the seller. (Moshe’s application, however, notes that the hospital’s audited financial statements reported total net operating revenues of $75.7 million, $78.5 million, and $77.8 million for those years, respectively.)

“We are looking forward to the process at DOH continuing,” said Princeton Public Affair’s Group’s Al Gaburo, a spokesman for the current ownership, which worked with Moshe for months to structure a potential sale before he submitted an application to the state last summer. “We believe strongly that the new owner is an accomplished entrepreneur and health care professional who will energize the community and move Meadowlands Hospital forward.”

In his 124-page application, Moshe stressed that he is not planning any immediate changes, other than to invest at least $3 million in facility upgrades and new equipment over the next five years. He said no change in services, or “decertification” of beds is anticipated, although at one point the submission notes: “Future evaluation and review of actual volume will determine the need to maintain or eliminate any bed capacity.”

Same-day surgeries

According to the application, Moshe predicts the facility will continue to treat about 5,400 people a year, nearly 40 percent of whom will involve same-day surgeries — a lucrative practice that has helped support the hospital operations in recent years. He said net operating revenues will continue to creep up and could reach nearly $80 million in 2018, up from $77.6 million this year.

Moshe – who has not responded to requests for comment — also notes, “There will be no impact on consumer access to health care at Meadowlands, including access by medically indigent and medically underserved populations.”

The impact on the community has long been a concern for healthcare advocates who worried about a lack of medical options if the hospital had gone out of business in 2010. The current ownership, led largely by Dr. Richard Lipsky and Tamara Dunaev, have stressed how their investment has protected patient options and downplayed criticism about patient quality and staffing concerns.

(The Health Professionals and Allied Employees union, which represents some 300 Meadowlands workers, won a labor relations case against the hospital management that involves an estimated $2.5 million in back pay and other lost benefits. Ownership has blamed HPAE for much of its bad publicity.)

One purpose of the planning board’s public hearing on October 19 is to attempt to understand the impact of such a sale on the local community. The process is required by the state regulations regarding Certificate of Need applications, or CNs, which outline the terms for transferring hospital assets or services through a sale. The planning board serves as a technical advisor to the health department on the CN process.

Members of the public can weigh in in person at the meeting, or submit written comments to the board directly until October 26. DOH staff will then review the testimony and board’s findings and prepare a recommendation on the CN application. Spokesperson Dawn Thomas said the department can require specific conditions, like the maintenance of key services, as part of this process.

Staff then presents this suggestion back to the board, which reviews the DOH’s findings and prepares a final recommendation to the state health commissioner. The commissioner then has 120 days to take a final action on the matter.