Prime Healthcare Services could rob NJ taxpayers of millions

Source: Health Editorial
A for-profit company with a track record of buying struggling community hospitals and turning them into profit-making enterprises has set its sights on New Jersey. If it’s successful in its bid to purchase Saint Mary’s Hospital in Passaic, Saint Michael’s Medical Center in Newark and St. Clare’s Hospital in Morris County, New Jersey taxpayers will lose tens and maybe hundreds of millions of dollars.
Health care advocates, community-based organizations and labor unions have already raised questions about the California-based buyer, Prime Healthcare Services — with its record of investigations, allegations and lawsuits concerning its billing practices — wondering whether the pattern of increased health care bills and dwindling charity care at Prime hospitals is worth the cost.

Whether these business practices are imported to New Jersey or not, one group — New Jersey taxpayers — will unquestionably bear the cost, should any of these sales be approved by the state.

Every taxpayer in New Jersey will be saddled with millions of dollars in unpaid debt if Prime is successful in buying hospitals here. The portion of unpaid debt from Saint Mary’s Hospital alone will equal $30 million. Years ago, the state bailed this hospital out of its financial troubles with a loan to ensure the hospital stayed open. Prime’s bid will not assume this debt, and last month, the Department of Health’s State Health Planning Board agreed to those terms, recommending that the sale of Saint Mary’s be allowed to go through.
Add to it that Saint Michael’s Medical Center, another Prime Healthcare target, is sitting on hundreds of millions of dollars in debt that could also be passed onto the taxpayer. If that is allowed to happen, the potential weight of the taxpayer burden will be astronomical.
Prime has openly boasted that it acquires and runs struggling hospitals — more than 25 nationwide — at great profit to Prime. In New Jersey, such transactions would maximize the company’s profits, but saddle taxpayers with this enormous debt without even guaranteeing quality patient care and the servicing of community needs. The U.S. Department of Justice is investigating the allegations that this company is guilty of overbilling Medicare, a further hit to the taxpayers.
Additionally, Prime has already notified some insurance companies that it intends to terminate participation contracts signed by Saint Mary’s, possibly leaving patients with large out-of-network costs.

The Saint Mary’s community needs a hospital, and Saint Mary’s needs a buyer. It is, nonetheless, unacceptable that Prime should be allowed to hold a gun to the state’s head and rob the taxpayers of $30 million.

Saint Michael’s, by contrast, where the debt is much larger, is owned by Cathedral Health East and its partner, Trinity, which made more than $1 billion in the last two years. This hospital’s board can certainly afford to look for a buyer that will serve the community, and work with local health care providers, such as the equally struggling University Hospital, without making off with millions in taxpayer money.
Gov. Chris Christie, the Department of Health and the attorney general should safeguard the community and New Jersey taxpayer interests by seeing that no one walks away with a hospital or its assets without paying full price.

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