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Senate Health Committee To Hear Testimony On Converting Non-Profit Hospitals To For-Profit Status Monday

A view of the Senate Chambers from the 2010-2011 Senate Reorganization.

Hearing Follows Weinberg Letters Urging Investigation of Allegations of Fraud in Hoboken University Medical Center Deal

TRENTON – On Monday, the Senate Health, Human Services and Senior Citizens Committee will hear from invited guests about issues surrounding the conversion of non-profit hospitals to for-profit status, at a time when impropriety and fraud has been alleged in the transfer of Hoboken University Medical Center (HUMC) to private owners.

“Given the high cost of health care, I think New Jerseyans have a right to know how these decisions are made, and what motives are behind them,” said Senator Weinberg. “When so many people can’t afford basic access to health care, I think it sends a bad message that non-profit hospitals are so quick to transfer to for-profit status. At the end of the day, we have to make sure that the mission of health care for all New Jerseyans is being preserved in any new business arrangements made at these facilities.”

The Senate committee – which was scheduled in advance of the latest allegations of fraud at HUMC had come to light – will take a broader view of the issue, examining problems which had risen in converting hospitals to for-profit status in recent years. However, Senator Weinberg has sent letters to the New Jersey Attorney General’s Office and the U.S. Attorney’s Office, requesting they investigate the transfer, and has urged the State Department of Health to delay signing-off on the deal until a full investigation can take place.

“If reports are true, the actions of the Hoboken Municipal Hospital Authority represent criminal fraud and malfeasance, and should be prosecuted to the highest standard of law,” said Senator Weinberg. “State and local taxpayers and health care consumers deserve to know that the deal struck to transfer HUMC to private owners was done following the letter and spirit of law, and that jobs and access to care will be preserved. The latest allegations cast a shadow on this deal, and I hope that State and federal regulators will get to the bottom of this sooner, rather than later, and that the Department of Health will withhold approval until all of the allegations are put to rest.”

Senator Weinberg noted that on Wednesday, The Star Ledger ran an article reporting that Donald Scarinci, the attorney representing the hospital authority, resigned from the position, citing fears of fraud over the transfer of ownership. Among the allegations made by Mr. Scarinci were a pattern of intimidation, abuse, threats, and the withholding of millions in contractual expenses to make it appear as if the hospital was in duress and to push it into bankruptcy. The Bergen County lawmaker noted that any deal to transfer ownership of the hospital, without answering the questions raised in allegations over the proceedings, would be tainted with at least the appearance of corruption.

“Unfortunately, we live in a society in which the administration of health care is big business, and with millions of dollars at stake, I wouldn’t be surprised if someone, somewhere along the line, crossed the line when it comes to transferring non-profit hospitals to for-profit hospitals,” said Senator Weinberg. “We need to take a look at how and why these transfers take place, and whether or not they make sense for the community being served by the hospital. Hopefully, our hearing on Monday will generate ideas to create a better system, in which the needs of health care consumers and the community as a whole are protected in transfer deals and fraud, malfeasance and abuse are not tolerated.”

The committee is scheduled to meet at 2 PM on Monday, September 19 in Committee Room 1 of the Statehouse Annex in Trenton.

Click here to read Senator Weinberg’s letter to Health Commissioner Mary O’Dowd on the HUMC deal.

Click here to read Senator Weinberg’s letter to NJ Attorney General Paula Dow on the HUMC deal.

Click here to read Senator Weinberg’s letter to U.S. Attorney Paul Fishman on the HUMC deal.