CarePoint sues RWJBarnabas over alleged care monopolization scheme

A “year-long systemic effort” to “destroy the competition”.

Allegations of conspiracy with real estate investors to push a New Jersey healthcare system into bankruptcy. Accused of neglecting the poor and the uninsured.

All of the above made its way into a lawsuit between a three-hospital health system in New Jersey against the state’s largest health system, accusing it of conspiracy to eliminate competition.

CarePoint Health filed a lawsuit against RWJ Barnabas Health September 6. Plaintiff alleged that RWJBarnabas pursued a multi-year anti-competitive scheme to “monopolize the provision of general acute care hospital services and related health care services in northern New Jersey.”

CarePoint includes the 349-bed Christ Hospital, the 224-bed Bayonne Medical Center and the 348-bed Hoboken University Medical Center. RWJBarnabas Health includes 12 acute care hospitals and four children’s hospitals, as well as other locations and services including outpatient care centers, ambulatory care centers, home care and palliative care programs, and health care organizations. responsible care.

The lawsuit alleges that RWJBarnabas conspired with real estate investors, government officials, and Horizon Blue Cross Blue Shield (New Jersey’s largest payer) to usurp revenue from CarePoint patients and drive the healthcare system into bankruptcy.

CarePoint claimed that RWJBarnabas’ goal was to force Christ Hospital and Bayonne Medical Center to close, but acquire Hoboken University Medical Center because of its more lucrative payer mix. This alleged plan “did not consider the needs of the poor, underinsured and charitable patients that CarePoint serves in its role as a hospital safety net system in and around Jersey City,” the lawsuit said.

The complaint stated that RWJBarnabas had issued a false letter of intent to acquire Christ Hospital and Hoboken University Medical Center in 2019. Carepoint claimed that RWJBarnabas did not actually want to buy these hospitals – instead, RWJBarnabas was conspiring with “real estate players” to gather market intelligence and competitive intelligence to “freeze programmatic growth and any significant hiring or construction at Christ Hospital.”

At first, CarePoint believed the offer was made in good faith. Negotiations stalled after CarePoint began to believe that RWJBarnabas intended to hold the real estate “hostage”. RWJBarnabas circulated rumors about Christ Hospital being consolidated and closed or reduced to a small emergency department, which led to the attrition of doctors, staff and patients at the hospital, according to the trial.

The lawsuit drew attention to a satellite emergency service that RWJBarnabas opened “in coordination with Horizon” in 2017, just five blocks from CarePoint’s Bayonne Medical Center. The resulting discrepancy of urgent care patients has cost CarePoint at least $80 million over the past three years, according to the lawsuit. Carepoint alleged that the satellite emergency service was built and began operating without the required approval from the New Jersey Department of Health.

Carepoint also claimed to have lost at least $227 million as a result of RWJBarnabas’ efforts to turn away and head to its Jersey City medical center. RWJBarnabas has diverted EMS patient transportation from CarePoint facilities and to the medical center, especially patients with private medical insurance or the financial means to pay for transportation and any resulting emergency or hospitalization services , according to the lawsuit. He also alleged that RWJBarnabas referred uninsured patients and those covered by Medicare or Medicaid to CarePoint facilities.

Practices represent ‘flagrant disregard’ of 2016 deal settled earlier dispute over ambulance service in and around Jersey City, CarePoint said. The insurance information that RWJBarnabas uses to divert and direct EMS transportation was obtained through Horizon, according to the complaint.

The lawsuit also alleged that RWJBarnabas and his conspirators claimed “undue influence over the NJDOH and the Governor’s Office to prevent CarePoint from developing programs for the community, receiving funding to serve the underinsured and underserved and also creating barriers to CarePoint’s evolution into a regional powerhouse in the health care field with a stable financial base.

RWJBarnabas’ wrongdoing violates the Sherman Antitrust Act and the New Jersey Antitrust Act, according to the lawsuit.

A statement from RWJBarnabas forcefully denied the allegations.

The lawsuit is “yet another in a series of baseless complaints filed by CarePoint, an organization whose management apparently prefers to blame others rather than accept responsibility for the unsatisfactory results of their own poor business decisions and actions over the years. years,” a RWJBarnabas spokesperson said. The spokesperson would not comment on the specific claims beyond what the health system said in a statement last week.

This is not the first time RWJBarnabas’ alleged anti-competitive business practices have made headlines this year. In June, the health system canceled a merger with Saint Peter Health System after the Federal Trade Commission blocked the dealclaiming it would harm competition and raise prices.

Photo: Doug Kerr, Flickr user

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