The New Jersey Department of Health has asked CarePoint Health to provide state officials with its "disaster plans" amid the three-hospital system's ongoing financial challenges, News12 New Jersey reported Feb. 12.
State officials argue that CarePoint's safety-net hospitals are at risk of further financial deterioration and "have consistently maintained low days cash on hand, maintained negative operating margins and a high number of days in accounts receivable," according to the report.
All hospitals in the state are required to have disaster plans, which should include a list of hospitals for relocating patients, emergency procedures for evacuating patients and plans in case there is an interruption in services.
"While it's clear that CarePoint's hospitals are in great financial need, it is absolutely, categorically false to claim that any of them are at imminent risk of closing, and doing so only creates unnecessary stress on the dedicated physicians and staff," CarePoint spokesperson Philip Swibinski said in a statement shared with Becker's. "It is unfortunate that someone chose to leak this confidential document in an effort to cause a panic."
Uncompensated care demands, escalating homelessness, workforce challenges and rising costs have left the system in a financial bind, reporting a $34.4 million loss for the nine months ended Sept. 30, 2023, down from a $7.5 million loss in the prior-year period.
In 2023, CarePoint saw a substantial spike in charity care and uninsured patients, with more than 50% of its patients now underinsured or uninsured. Almost 95,000 patients visit one of CarePoint's emergency departments each year, but since the pandemic, about 57,000 of those patients came under charity care or self-pay, according to data CarePoint shared with Becker's.
"The national median for charity care is 1.4%, and we're seeing more than 10%. That makes things very difficult," CarePoint President and CEO Achintya Moulick, MD, told Becker's. "It cannot be our burden to bear alone. It should be a collective burden due to the societal problems we are dealing with. We've seen almost 12,000 homeless people in our emergency rooms since the pandemic."
CarePoint's safety-net hospitals include Hoboken University Medical Center and Christ Hospital in Jersey City, N.J., two nonprofit facilities, and Bayonne Medical Center, a for-profit entity.
Last month, CarePoint and Hudson Regional Hospital in Secaucus, N.J., signed a letter of intent to combine under a new management company, Hudson Health System. Hudson Regional, a for-profit facility, would combine with CarePoint's three hospitals under a new operating company. The proposed transaction, which is subject to state approval, would help improve CarePoint's financial position as well as patient care and outcomes across the hospitals.
In response to CarePoint's financial uncertainty, for-profit Hudson Regional "has prepared to assume operational control of all three hospitals on a moment's notice," hospital spokesperson Ron Simoncini told NJ.com.
CarePoint says it received $10 million in state funding in 2023 and is requesting at least $100 million in state appropriations to continue optimal pace operations.
"Leaders have continuously asked for state assistance to support the system's operations, but those needs have largely been unmet —- that is the root of this crisis, and the solution is a dramatic increase in state support," a CarePoint spokesperson said in a statement.