CarePoint Health and Hoboken Community Hospital Authority in legal battle over board practices

As Hoboken Community Hospital’s administration was reconstituted last year amid an uncertain future for CarePoint Health, which operates Hoboken University Medical Center, many of its meetings were closed-session discussions and minutes that would shed light on the board’s intentions have been elusive.

But CarePoint Health and the board created to ensure the hospital’s continued operations appear to be deeply at odds. A lawsuit CarePoint filed against the agency in February alleges it harmed the health network’s potential business deals, shared confidential information and exceeded its authority.

Allegations of wrongdoing are many and varied in the litigation. CarePoint has questioned the structure and purpose of the board in addition to the ways in which it gathers information from other potential hospital operators.

“This lawsuit was filed to protect Hoboken University Medical Center from its competitors and those with interests opposed to its future success,” said Phil Swibinski, a spokesman for CarePoint Health. “CarePoint Health will continue to vigorously pursue its right to operate the hospital as the rightful owner and is absolutely committed to providing exceptional patient-centered care to the residents of Hoboken and Hudson County as a not-for-profit organization.”

It said the hospital authority issued a “request for indications (RFI)” in December for potential hospital operators and that it should never have done so because it did not own the hospital property. It claims the request includes confidential information that CarePoint has never provided to the hospital authority, including financial statements that have not been made public.

The RFI was also issued after CarePoint announced plans to become a nonprofit, the lawsuit said, alleging the hospital authority’s claims about CarePoint’s plans to find a new operator for Hoboken University Medical Center were false.

As a result of interactions that hospital management later had with other hospital operators, CarePoint’s reputation and potential economic prospects with those other operators were damaged, the suit says.

“As a result of the distribution of the RFI, certain RFI recipients have suspended ongoing negotiations and reconsidered future business relationships with” CarePoint Health, it said. “More broadly, the RFI puts claimants at a disadvantage in entering into new agreements and retaining staff. The current RFI states that the current operator will be displaced.”

The lawsuit cites a “medical individual” with whom CarePoint was negotiating about potential new specialists for the hospital. After the RFI was circulated, “an intended partnership with the medical entity is called into question and may ultimately be terminated altogether, exceeding more than $100,000 in damages,” according to the lawsuit.

Other issues raised include the makeup of the hospital’s board, which the suit claims has too few members and a conflicted member, and its very existence, since hospital authorities are said to exist solely to buy hospitals, and Hoboken’s never has indicated that he is interested in it so.

The MHA board consists of six members appointed by the mayor — Russo — and five members appointed by the mayor with input from the City Council: Heather Saida, Rajiv Goswami, Tony Tommarazzo, Keith Barksdale and Babette Ceccotti. City code says there must be 11 members. The board was created in 2006 when the city took ownership of the former St. Mary’s Hospital. The hospital was eventually sold to a group led by Vivek Garipally and became part of CarePoint Health.

On April 14, Hudson County Superior Court Judge Mary Costello ruled that the hospital authority must disclose who received the RFI and destroy any confidential information it has about CarePoint. But in June, the court modified the requirement, saying the hospital authority must return the confidential information to CarePoint instead of destroying it.

The case continues.

“CarePoint’s claims against HMHA, as set forth in its civil complaint, speak for themselves, and we are confident that this case will reach a successful outcome in favor of CarePoint and the communities we serve,” Swibinski said.

A lawyer for the hospital declined to comment on the pending lawsuit.

The Hoboken City Council this week approved a city appraisal contract for the Hoboken University Medical Center property, an indication it may consider trying to buy the land, which is under contract with Hudson Regional Hospital. Russo said hospital officials and the city will look at all available routes to ensure the hospital remains open to residents.

CarePoint Health has said it intends to ensure the hospital stays open and is even interested in buying the land itself. The land is owned by Hudson Regional Hospital in Secaucus, which purchased the HUMC land and BMC property from Alaris Health founder Avery Eisenreich last year for $220 million. Hudson Regional Hospital made attempts to purchase both HUMC and Bayonne Hospital.

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