NJ Lawmaker Wants ‘Transparency’ When Hospitals Go Belly-Up

HUDSON COUNTY, NJ — A recently reelected state lawmaker from Hudson County is pushing for more financial transparency at hospitals in New Jersey as two companies prepare for a potential ownership swap in Hoboken, Jersey City and Bayonne.

Last week, Assemblyman Nicholas Chiaravalloti introduced a package of three bills that aim to give communities an early warning when hospitals are in “financial distress.”

The proposed laws would also force hospitals to reveal more information about revenue sources, ownership, investors and other associated ventures, said Chiaravalloti, who represents the state’s 31st District (Bayonne and Jersey City).

The bills come in the wake of a recent announcement that CarePoint Health – which owns Hoboken University Medical Center, Christ Hospital in Jersey City and the Bayonne Medical Center – has signed a letter of intent to sell two of the hospitals to RWJBarnabas Health (RWJBH).

According to a joint statement from the companies, Hoboken University Medical Center and Christ Hospital would become part of RWJBH. The October agreement is a major step towards reaching a definitive agreement on the sale, which is expected before the end of the year, pending state and federal approval.

CarePoint Health has started a separate process seeking a "strategic partner" for Bayonne Medical Center, leaving the future of that hospital uncertain for now. The company bought Bayonne Medical Center in 2008.

• See related article: CarePoint May Sell Hudson County Hospitals To RWJBarnabas

Bayonne Mayor Jimmy Davis has expressed worry that the deal could mean the closure of Bayonne Medical Center. Meanwhile, union members at the hospital have said workers also deserve to have a voice when it comes to the future of the facility.

“The Bayonne Medical Center is vital to the people of this city,” Chiaravalloti said. “If we had known sooner about a planned merger that could leave residents without access to healthcare, we could’ve had conversations with CarePoint Health to try to determine a better approach.”

“With more transparency and oversight, we can prevent hospitals from engaging in questionable business practices that could lead to over-priced medical bills for patients,” Chiaravalloti added. “We can also make sure that no hospital ever reaches a point where their previously undisclosed financial situation is so dire that they are forced to close the facility – leaving community members with a complete loss of access to care.”

Here's how the package of bills would work, according to Chiaravalloti:

• “One bill would give broader oversight capabilities to the Department of Health (DOH) by expanding its early warning system, whose purpose is to detect whether hospitals are nearing or already in financial distress. The new legislation would require the system to monitor the quantity and suitability of any fees, allocations and payments made to third parties.”
• “Another bill would allow the state commissioner of health to notify elected officials if certain hospitals are found to be in financial distress.”
• “Increased transparency would also be required of hospitals when it comes to providing financial information to the DOH. Newly proposed legislation would require non-profit hospitals to share IRS Form 990 and for-profit hospitals to submit equivalent information to the DOH in order to reveal aspects of their revenue and taxation.”
• “Further stipulations would require hospitals to submit information about ownership, leases and rentals of offices and properties. It would also require the identification of investors, business partners and other affiliates while sharing information about projects and ventures financially associated with the hospital.”

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