DECEMBER 2014 Visit us now online at www.NJPhysician.org
Compensation Changes Loom for Primary Care Physicians N.J. Hospitals are $21B Economic Engine Horizon BCBSNJ to Offer 24/7 Telephone, Online Access to Doctors For New Jersey Residents, Healthcare Landscape Saw Significant Shifts in 2014
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Contents
Compensation Changes Loom for Primary Care Physicians
6
CONTENTS
7
CMS Finalizes Changes to Medicare Enrollment Rules
9
N.J. Hospitals are $21B Economic Engine
10
Horizon BCBSNJ to Offer 24/7 Telephone, Online Access to Doctors
11 For New Jersey Residents, Healthcare Landscape Saw Significant Shifts
in 2014
12 Proposals Emerge for Easing Pain of ‘Sticker Shock’ from
Out-Of-Network Costs
13 Buyer Defends Sale Of Saint Michael’s Medical Center Amid Controversy 14 Valley and Mount Sinai Health Systems Team Up for “Academic Affiliation” 17 Union County Sells Berkeley Heights Hospital for $26M
4 New Jersey Physician
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Cover Story
Compensation Changes Loom for Primary Care Physicians By Ari Burd Giordano, Halleran and Ciesla
B
eginning January 1, 2015, a significant cut in physician fees for primary care services will go into effect. Estimates suggest that fee reductions will average approximately 40%, but could be even greater in New Jersey where Medicaid has expanded under the Affordable Care Act. The Affordable Care Act had temporarily increased federal Medicaid funding to physicians to match Medicare payment levels back in 2013. That temporary increase was limited to two years and is set to end in 2015. It was put in place to encourage physicians to see more Medicaid patients at a time when Medicaid patient rolls were vastly expanding. Presently, there is no sign that the increase will be extended before the cut goes into effect. The most recent fix which prevented a major cut to Medicare payments is scheduled to expire on March 31, 2015. It is assumed that Congress will review the cut in physician fees at that time as well. This could provide an opportunity for Congress to extend the temporary increase in Medicaid funding at that time. At the same time physician fess will be potentially cut, physicians will have the opportunity to make up some of that lost revenue by receiving monthly fees for providing care coordination of patients with two or more chronic conditions like diabetes and heart disease. Care coordination typically involves assessing a patient’s care coordination needs, exchanging information amongst care givers, monitoring and adjusting care and evaluating outcomes. While doctors traditionally performed these services, previously they were not paid for them. According to the Department of Health and Senior Services, two-thirds of Medicare beneficiaries have at least two chronic conditions. As a result, payments for coordinating the needs of these patients have the potential to be a significant new income stream for physicians. Presently, it is expected physicians will receive about $42 a month for managing the care of Medicare patients. Practices would be required to use a certified electronic health record (EHR), provide 24-hour access to staff, appoint a designated clinician for each patient, and coordinate care among hospitals, specialists, er providers. The new payments are for non-face-to-face services. These services can be provided by doctors, nurse practitioners, physician assistances and other health professionals. Medicare indicates that it expects doctors will focus on the sickest patients, generally those with four or more chronic conditions.
6 New Jersey Physician
Legal News
CMS Finalizes Changes to Medicare Enrollment Rules By Beth Christian Giordano, Halleran & Ciesla
O
n December 3, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a final rule concerning provider enrollment or re-enrollment in Medicare. The final rule will give CMS the ability to deny or revoke the enrollment of entities and individuals that pose a program integrity risk to Medicare, including those that have a managing employee that has been convicted of certain crimes. In addition, CMS will have the ability to deny Medicare enrollment of providers, suppliers, and owners affiliated with an entity that has unpaid Medicare debt. Providers and suppliers may have their Medicare enrollment revoked if (i) the provider or supplier demonstrates a “pattern and practice” of submitting claims that fail to meet Medicare requirements or (ii) the provider or supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of service. CMS is also making the effective date of Medicare enrollment uniform for all provider and supplier types. Providers and suppliers will only be able to submit claims for services rendered as of the filing date of their enrollment application or the date of first furnishing services at a new practice location, whichever is later.
December 2014 7
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Hospital Rounds
N.J. hospitals are $21B economic engine, report says By Beth Fitzgerald
N
ew Jersey hospitals contributed almost $21 billion to the state’s economy in 2013, according to the 2014 N.J. Hospitals Economic Impact Report released Wednesday by the New Jersey Hospital Association.
The report said New Jersey hospitals supplied 144,000 full- and part-time jobs in 2013, which saw increases in areas such as goods and services purchased from other businesses and state income taxes paid by employees. “Even as New Jersey hospitals are shouldering significant cuts in reimbursement under the Affordable Care Act, they continue to be a stable force in New Jersey’s economy by adding jobs while still giving back to their communities and providing $1.3 billion in charity care for our uninsured,” said NJHA President Betsy Ryan. The report uses data from New Jersey’s 72 acute care hospitals. Highlights include: • New Jersey hospitals purchased $2.8 billion in goods and services from other companies last year, an increase of $100 million over 2012. Key areas include contracted labor ($1.4 billion), pharmaceuticals ($962 million), utilities ($262 million), dietary, laundry and housekeeping ($138 million) and building supplies ($19 million). • New Jersey hospitals paid more than $8.3 billion in employee salaries last year, up from $7.9 billion in 2012. • Employees at New Jersey hospitals paid approximately $457 million in state income taxes last year, compared with $435 million in 2012. “New Jersey hospitals help provide economic stability to the state through employment and revenue. And their economic investments in their facilities help expand infrastructure, purchase new technology and maintain a highly skilled workforce,” said Sean Hopkins, NJHA senior vice president of health economics.
December 2014 9
Hospital Rounds
Horizon BCBSNJ to offer 24/7 telephone, online access to doctors By Beth Fitzgerald
H
orizon Blue Cross Blue Shield of New Jersey on Tuesday announced a new telehealth service, Horizon CareOnline, that provides access to a board certified, licensed doctor online 24 hours a day, seven days a week — at no change, and no appointments needed. Horizon said the new benefit, which will begin Jan. 1, is “part of an ongoing commitment to improve its members’ health care experience through innovation and technology.” Horizon CareOnline is available at no cost to individuals and families that purchase coverage from Horizon at HealthCare. gov, the website where New Jerseyans buy government-subsidized health plans under the Affordable Care Act, as well as those purchasing individual and family health plans directly from Horizon. Telemedicine is being offered by two other health insurers selling coverage to New Jerseyans via HealthCare.gov: Health Republic Insurance of New Jersey and Oscar Insurance. Open enrollment began Nov. 15 for health plans that go into effect in 2015, and individuals can continue to enroll online at HealthCare.gov through Feb. 15. Also selling coverage to New Jerseyans via HealthCare.gov are UnitedHealthcare/Oxford and AmeriHealth New Jersey. “Horizon recognizes that there are times when individuals cannot get to a doctor quickly or easily when they get sick, so Horizon CareOnline will go a long way to adding convenience to receiving care from a licensed physician,” said Christopher M. Lepre, senior vice president, market business units, for Horizon. Horizon said it’s offering CareOnline through a partnership with telehealth provider American Well. Horizon members also will be able to access CareOnline on their laptop or desktop computers by signing up at Horizon.Amwell.com, or calling (855) 818-DOCS (3627). Smartphone and tablet users can enroll by downloading American Well’s free Amwell app from the iTunes Store or Google Play. Members are then able to select from a list of doctors, including Spanish-speaking physicians, for their virtual visits. Horizon “is bringing health care home to members,” said Roy Schoenberg, chief executive of American Well. “We are proud to collaborate in this mission.” American Well said its web and mobile telehealth platform connects patients and clinicians for live visits through video, supplemented by secure text chat and telephone conversations.
Horizon said CareOnline is the latest service offered by the company to make health care more convenient through technology. Horizon said that, for more than a decade, it has offered members a 24/7 registered nurse phone service. Horizon also has a mobile app that enables users to create a virtual ID card, review the status of a claim, find a network physician and access other health insurance benefits
10 New Jersey Physician
Medical News
For New Jersey Residents, Healthcare Landscape Saw Significant Shifts in 2014 By Andrew Kitchenman
F
ewer people were uninsured thanks to Obamacare and Medicaid expansion, and there was more focus on homebased care More New Jerseyans than ever have health insurance as 2014 comes to an end; perhaps the most important change in an eventful year for healthcare in the state. Along with soaring insurance rolls, the state saw a major shift in how it provides long-term services to Medicaid recipients, due to a comprehensive federal waiver that is intended to concentrate care in residents’ homes and communities rather than in nursing homes. But much more happened throughout the year to change how healthcare policy affects residents. This included lively policy debates centered on the expansion of for-profit hospitals; what steps the state should take to counter a rising number of deaths from overdoses of opioid drugs; and how the state should handle the ongoing Ebola virus crisis. More than 500,000 state residents gained insurance due the expansion of Medicaid eligibility and the federally operated individual marketplace, healthcare.gov, essentially cutting the uninsured rate in half. While 161,775 enrolled in marketplace plans through April, policy advocates were sharply critical of a decision by Gov. Chris Christie’s administration to allow $7.67 million in federal ACA funding to be returned to the federal government. While advocates and federal officials said the money could have been used for marketplace outreach, state officials fruitlessly sought to use it to offset state costs related to Medicaid expansion. The marketplace saw two new insurers in 2014: Health Republic Insurance of New Jersey, joined the marketplace in January, and Oscar Health Insurance began selling its own marketplace insurance later in the year. Policy analysts expressed hope that the increased competition would contribute to lower insurance costs, in addition to more options for consumers.
The Medicaid eligibility expansion was the primary way that more residents became insured, with 382,077 additional residents covered by Medicaid by the end of November, reaching a total of 1.67 million Medicaid recipients. But the state was also plagued by backlogs in processing applications for Medicaid coverage, with some counties building multithousand-applicant backlogs throughout the year. These problems were complicated by an ongoing failure to launch the state’s new computer system for tracking recipients of Medicaid, food stamps, and other social services. In addition to those who receive health insurance for trips to doctors’ offices and hospitals through Medicaid, many others receive long-term services and supports from the program. On July 1, the state shifted to a managed-care approach for these patients, in which insurers to aim to provide services in residents’ homes or in community centers rather than in nursing homes. The transition, which is part of the state’s five-year Medicaid comprehensive waiver, appeared to go smoothly, although it remains to be seen whether the change will result in the budget savings that were once projected from it. Long-term care received a critical assessment from AARP, which in a report card found that New Jersey was among the worst-performing states in terms of the percentage of high-risk nursing home residents with bedsores. Industry advocates responded that nursing homes have already put policies in place that should lead to an improved ranking in future years. AARP scored a legislative victory when it successfully advocated for a new law that will provide more information to caregivers when senior patients leave the hospital. While the number of residents covered by Medicaid was driven by federal changes resulting from the Affordable Care Act, developments in New Jersey may determine how effective the healthcare that the sickest Medicaid recipients will be in the future.
December 2014 11
Medical News
Proposals Emerge for Easing Pain of ‘Sticker Shock’ from Out-OfNetwork Costs By Andrew Kitchenman
G
reater price transparency and arbitration identified as possible solutions to hefty and unexpected healthcare bills, but details remain unclear The “sticker shock” some patients experience when they are told they have to pay for an out-of-network doctor is prompting the Legislature to find ways to avoid such unpleasant surprises. The problem arises, for example, because some specialists like anesthesiologists are only assigned shortly before procedures, often leaving patients with no way to know if the specialists are part of the patient’s ’ insurance network. Doctors and hospitals are now uniting behind a legislative proposal to require insurers to disclose to patients how much the insurers will reimburse providers, as well as how much the patients could have to pay out of pocket, before patients receive services. Insurers and employers who pay for insurance also want changes in the system , but their motivation is lowering healthcare costs. Both those who provide healthcare services and those who pay for them, such as insurers, argue that current laws give too much leverage to the other side in contract negotiations, and can point to specific cases of apparent abuses. Both sides also are producing concrete proposals after three rounds of legislative testimony by stakeholders. But 12 New Jersey Physician
they are far apart on how to resolve their differences, and it’s unclear what legislative proposals will emerge. “The focus needs to be on consumers and how consumers are impacted,” said Assemblyman Craig J. Coughlin (D-Middlesex), chairman of the Assembly Financial Institutions and Insurance Committee. He’s convened three hearings to hear testimony from stakeholders on out-of-network costs. The last of those hearings was held yesterday. Dr. Nancy Staats of the New Jersey State Society of Anesthesiologists said the onus should be on insurers, not doctors, to inform patients about their potential exposure to out-of-network costs. She added that many anesthesiologists don’t know exactly which health plan networks they are in, noting that even with specific insurers their services might actually be covered in the networks for some plans but not for others. Staats said most doctors prefer to work in-network as much as possible, adding that at the ambulatory surgery center that her practice services, patients can learn if the anesthesiologist is in their network, since all of the anesthesiologists are in the same networks. But legislators said this isn’t the case at all facilities, since a single hospital may be served by multiple anesthesiology practices. Since anesthesiologists generally aren’t assigned for specific surgeries until 24 hours before a surgery, there is always a risk of the patient having an out-of-network anesthesiologist.
“It seems to me … that this situation cries out for some sort of legislation,” Coughlin said. He added that he had an experience in which he had a procedure at a hospital that was in his insurance network, with a doctor that was in network, but he wasn’t able to learn before the procedure whether his radiologist was in his insurer’s network. Consumers protected, but still foot bill The state does have some protections for consumers. For example, in cases where the hospital where a patient chooses to have a procedure is part of the patient’s insurance network, insurers must reimburse specialists who treat patients like Coughlin during the course of their treatment – frequently for whatever amount the specialist charges. In addition, insurers must cover emergency care at out-of-network hospitals. But both insurers and groups that represent employers --say this system has come at significant costs to patients. While they may not have to pay the costs directly for these costs, they indirectly pay through higher insurance premiums, as well as higher taxes to cover government insurance programs like Medicare and Medicaid. “These kinds of out-of-network providers’ surprise bills that are really high impact the cost of buying that coverage,” said Christine Stearns, vice president of health and legal affairs for the New Jersey Business and Industry Association. — cont’d
Hospital Rounds For their part, doctor groups said insurers should be required to inform patients exactly how much they will reimburse out-of-network providers, as well as how this compares to other payments that providers receive for the same procedure. Dr. Steven M. Reich of the New Jersey Spine Society and the New Jersey Orthopaedic Society expressed frustration that insurers won’t tell providers or patients before a procedure how much they will reimburse the doctor for the service. In some cases, insurers have later tried to pay as little as 5 percent of what a patient was originally told they would pay. Reich said it would be fair if insurers based on their reimbursements to outof-network providers on an index of what fees other doctors are paid for the same service. Instead, insurers are increasingly basing their out-of-network payments on a fixed percentage above the Medicaid reimbursement rate, which Reich said is too low. But Wardell Sanders, president of the New Jersey Association of Health Plans, noted that Medicare reimbursements are based on a calculation of the value of the services, while basing reimbursement on fees would be inflated by the astronomical sums charged by some providers and lead to higher costs to insurers and consumers -- in
some cases, as much are 10 times more than the Medicare rate. “That’s why they’re fine with their fee schedule,” Sanders said. He added that state regulations already require insurers to base out-of-network reimbursements on fees in the individual and small-group markets, leading most insurers to stop offering outof-network benefits in these markets. This leads to providers billing patients for the cost and also results in disputes between the providers and the patients’ insurers, he said. These regulations don’t apply to large employers who fund their employee health costs, which are increasingly seeking to reimburse providers an amount tied to the Medicare rates. Belinda Doyle Puglisi, director of payer services for Children’s Specialized Hospital, said hospitals must be able to use the ability to go outside of an insurer’s network as a way to gain leverage. “If you can’t go out of network, then you can’t get their attention,” she said. “That is unfortunate, but that is true.” Timothy Martin, a lobbyist for the medical society, added that four insurers control 70 percent of the market, leaving providers with little leverage. The issue extends beyond hospitals to
ambulatory surgery centers, according to Mark Manigan, a lawyer who represents such facilities . He said that the state offers no protection for doctors who perform outpatient procedures, with insurers frequently tying their reimbursements to the Medicare rates. He also said that he would like to see the state require that out-of-network benefits reimburse doctors based on an index of all prices paid for the same procedure. Sanders said the Legislature should give more weight to the position of those who pay for out-of-network specialists at in-network hospitals, as well as for out-of-network emergency care. “The status quo is harming consumers today,” he said, adding that some hospitals and doctors are engaged in “price gouging.” Coughlin said he doesn’t care how the money is divided between doctors, hospitals or insurers, as long as patients come out ahead. “How do we drive down the cost of healthcare?” he said. But Lawrence Downs, CEO of the Medical Society of New Jersey, the state’s largest doctors’ group, responded that each dollar paid to medical practices results in needed healthcare, as well as job creation and tax payments.
Buyer Defends Sale Of Saint Michael’s Medical Center Amid Controversy By Naomi Nix
T
he proposed for-profit buyer of Newark’s Saint Michael’s Medical Center defended its record today in the face of an onslaught of criticism from some activists. Prime Healthcare Services issued a statement today saying the opposition against the purchase of the struggling medical center was about politics not medicine. “A careful and thorough review will show that Prime Health-
care is the right partner,” said Edward Barrera, Prime Healthcare Services’s director of corporate communications. “We are already improving St. Mary’s Hospital in Passaic and plan to do the same elsewhere in New Jersey.” Barrera’s statement came just hours after Newark mayor Ras Baraka and group of activists and labor leaders held a press conference today to criticize the deal.
— cont’d
December 2014 13
Hospital Rounds The activists issued a host of criticisms including that Prime Healthcare Services has a reputation for dropping insurance carriers, charging expensive out-of-network procedures and decreasing the amount of the charity medical care it offers. “This deal should be renegotiated with a better buyer” said India Hayes Larrier, a New Jersey Citizen Action group organizer. “Go back and do this again.” But Barrera said the deal will save a struggling hospital to meet Newark residents’ health care needs. “It’s unfortunate that Newark Mayor Ras Baraka has taken a position against the sale without even meeting with any Prime representative. We agree with Mayor Baraka in that Newark cannot afford to have another hospital close,” Barrera said. “If those opposing the acquisition get their way, Saint Michael’s will likely close or be a shell of itself, certainly hundreds of well-paying jobs will vanish and Newark residents will once again be shortchanged.” But Baraka said in statement Wednesday that Prime Healthcare Service “They never attempted to come in this office and lay out a plan or strategy. We have a contract that says they plan to do other than what they stated,” he said. “One of their first plans of business should’ve been to meet with the Mayor of the city, our Dept of Health and our healthcare partners.”
Barrera said the healthcare company plans to maintain all the services St. Michael’s currently offers, maintain in-network status with managed health plans and keep the emergency department and other services open for 10 years or longer. The California company has never sold a hospital and is planning to invest $30 million in equipment upgrades and capital improvements at Saint Michael’s, Barrera said. But Baraka said details of such investment should make it into the contract. “If they are committing to maintaining services, avoiding layoffs, and investing in the community of 10 years or more lets see that in a contract form with appropriate signatures,” Baraka said. Prime’s pledge for capital investment was one of many reasons Saint Michael’s Medical Center chose the company as its buyer, the center said. “We selected Prime Healthcare as the most viable option to financially stabilize and secure a vibrant future for the medical center, ensuring it not only remains open as an acutecare facility, but also grows and prospers,” the medical center said in a statement. State health officials are currently reviewing the sale to Prime Healthcare Services. The California-based firm has offered to buy the struggling hospital for $43 million, which is more than $20 million less than was originally offered.
Valley and Mount Sinai health systems team up for ‘academic affiliation’ By Beth Fitzgerald
V
alley Health System in Ridgewood on Friday announced a strategic alliance with New York’s Mount Sinai Health System, a move Valley Chief Executive Audrey Meyers said does not foreshadow an eventual merger of the two institutions. A merger “is not the intent of this relationship,” Meyers said. “That is not at all what we are looking at. We’re looking at a strong academic affiliation.”
Meyers said affiliating with Mount Sinai, a major teaching and research system, will make Valley more attractive to physicians considering joining Valley’s medical staff. The relationship “will enhance our clinical programs and services, it will help us in our research endeavors and will provide educational opportunities for both physicians and our nursing team.” Mount Sinai has seven hospitals and the Icahn School of Medicine at Mount
Sinai. Valley Health System includes Valley Hospital, Valley Home Care and Valley Medical Group. Valley is not a teaching hospital, and does not plan to move in that direction, Meyers said. “Having a strong academic affiliation is attractive to physicians who are looking for practice sites,” she said. When Valley is recruiting physicians, the affiliation means Valley can offer them — cont’d
14 New Jersey Physician
Hospital Rounds as those big systems join forces. The latest is Hackensack University Health Network and Meridian Health, which last month announced a merger that will create the state’s largest health system with $3.44 billion in annual revenue. Annette Catino, chief executive of health plan provider QualCare, said hospitals are combining into larger systems to position themselves for a new era of population health management, where health care systems are compensated and incentivized to improve the health of the patients in their geographic territory.
“opportunities to collaborate on research, and to have an academic appointment at a very well-respected institution.” The extensive medical research conducted by Mount Sinai will strengthen Valley’s growing research activities, Meyers said. In early 2015, Valley will open an expanded research facility and, “given Sinai’s reputation in research, this will certainly be a great way to enhance what we can do.” Valley said its current research programs are focused on cardiac and oncology. Meyers said it’s too early to identify specific areas of collaboration, or new initiatives that will emerge from the affiliation. She said Valley and Mount Sinai will jointly recruit a new Mount Sinai associate dean who will “will help us oversee the development of joint initiatives in clinical services, research and educational programs.” Valley has been seeking an affiliation for “quite some time,” Meyers said. “From a strategic standpoint, Valley believes that having a strong academic affiliation is important and to our community and our physicians, and to attract the best and the brightest to our organization.” New Jersey hospitals for years have faced competition for patients from hospitals in New York and Pennsylvania, but Meyers said out-migration is on the decline, and the relationship with Mount Sinai will help Valley retain patients as it yields opportunities to enhance services for patients. And, she said, “Health care is local — people want to have their care delivered locally.” Meyers said Valley did not consider an academic affiliation with a New Jersey hospital system. She said that, as a result of Valley’s location in northern New Jersey, “We have many doctors who trained at Sinai. It was a great fit because our physician community knows the (Mount Sinai) organization well, and our community is aware of their academic standing and the standing of their clinical programs.” While the Valley/Mount Sinai relationship is an affiliation, not a merger, the New Jersey hospital landscape is being transformed as big systems acquire community hospitals — and
Asked if Valley could remain independent, Catino said, “Valley has been a very, very successful hospital, in a very affluent part of New Jersey, and they have very good quality scores, so they are going to do all right. “ But she said hospital systems are coming together “because they think you need to cover a larger geography and a larger population to be able to do all the things that they are going to need to do” in the realm of population health management. Mark Manigan, a health care attorney with Brach Eichler, said: “The relationship between the northern New Jersey hospital market, particularly in Bergen County, and the New York City hospital market, has always been an exceedingly competitive one. The proposed strategic/clinical alignment between Valley and Mount Sinai certainly speaks to that.” Manigan said it’s difficult to say if Valley and Mount Sinai will pursue a more robust affiliation or something more limited, “with the intent of doing some co-branding in order to capture business that both institutions may be losing to other New York competitors.” Manigan said, “There has, without question, over the past couple years been an uptick in the level of interest in the New Jersey market from New York institutions.” He cited Memorial Sloan Kettering Cancer Center, which broke ground in September in Middletown in Monmouth County for its second New Jersey outpatient cancer center, set to open in late 2016. Sloan Kettering opened its first New Jersey cancer center in 2006 in Basking Ridge, Somerset County. Manigan said, “The $64,000 question is really whether a New York Hospital system will seek to establish a hospital presence in New Jersey.” Dr. Kenneth L. Davis, chief executive of the Mount Sinai Health System, said in a statement, “We recognize the high quality of health care that Valley Health System has traditionally provided and see many opportunities as we partner in creating the foremost health care system in the metropolitan New York region.” “The best way to better serve our patients is to work with key strategic partners, and we are proud to enter into this relationship with Valley Health System as our network of affiliated medical providers continues to grow,” said Dr. Arthur Klein, president of the Mount Sinai Health Network. December 2014 15
16 New Jersey Physician
Hospital Rounds
Union County sells Berkeley Heights hospital for $26M By Beth Fitzgerald
U
nion County announced Tuesday that it has finalized the $26 million cash sale of its Runnells Specialized Hospital, a skilled nursing facility in Berkeley Heights, to the Center Management Group of Flushing, New York. The county said the deal will save up to $52 million over the next five years and generate an estimated $500,000 in new property taxes for Berkeley Heights. As part of the transaction, Union County said it has leased back the hospital’s 44-bed Cornerstone Psychiatric Unit from an affiliate of Center Management for up to 10 years.
In a statement, the county said the sale of Runnells Specialized Hospital marks the first ownership change in its 102-year history, and that the hospital will remain open under new ownership. Of the 391 employees impacted by the move, approximately 209 have either been rehired, kept their jobs or been transferred to other positions within the county and 63 have retired. The announcement of the sale also said Center Management is expected to continue to rehire more of the current employees. Union said it had set several conditions for completion of sale, requiring that Center Management: •
Pay not less than the appraised value of $26 million to the county;
•
Give current hospital patients the right to remain at the hospital;
•
Protect the hospital employees, in good standing, by offering the right of first refusal and providing as many employment opportunities as possible at the hospital and at Center Management Group’s other locations;
•
Guarantee a five-year capital improvement plan;
•
Commit to sharing revenue with the county for any new health care related services or facilities Center Management Group adds to the hospital;
•
Agree to a deed restriction that will require the hospital remain a health care facility for long-term patients;
• Agree that a certain percentage of beds at the Hospital shall remain available for Union County residents and to indigent patients. “This was a comprehensive effort that analyzed every facet of the hospital and every scenario for its continued operations,” said Freeholder Chairman Christopher Hudak, adding that a decision “of this magnitude” was “not an easy one and required well over two years of work.” “The bottom line is that we’ve made the best decision possible toward maintaining the financial viability of the hospital, keeping it open and guaranteeing the continuum of quality care for its patients,” Hudak said. The county said that, as a result of reduced Medicare and Medicaid reimbursement for long-term care facilities, it has paid a total of more than $30 million over the past two years to subsidize the facility.
December 2014 17
18 New Jersey Physician
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20 New Jersey Physician