`
`DILWORTH PAXSON LLP
`457 Haddonfield Road, Suite 700
`Cherry Hill, NJ 08002
`Telephone: (856) 675-1900
`Facsimile: (856) 663-8855
`Attorneys for Plaintiffs
`CarePoint Health Management Associates, LLC; Hudson Hospital OPCO, LLC,
`d/b/a CarePoint Health—Christ Hospital; IJKG, LLC, IJKG PROPCO, LLC and
`IJKG OPCO, LLC, d/b/a CarePoint Health—Bayonne Medical Center; and
`HUMC OPCO, LLC, d/b/a CarePoint Health—Hoboken University Medical
`Center
`
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`
`CAREPOINT HEALTH
`MANAGEMENT ASSOCIATES LLC,
`HUDSON HOSPITAL OPCO LLC
`d/b/a CAREPOINT HEALTH –
`CHRIST HOSPITAL, IJGK, LLC,
`IJGK PROPCO LLC and IJGK OPCO
`LLC d/b/a CAREPOINT HEALTH –
`BAYONNE MEDICAL CENTER, and
`HUMC OPCO LLC d/b/a CAREPOINT
`HEALTH – HOBOKEN UNIVERSITY
`MEDICAL CENTER
`
`
`
`
`Hon. _______________, U.S.D.J
`
`Hon. _______________, U.S.M.J.
`
`Civil Action No.
`
`
`
`
`COMPLAINT AND
`JURY DEMAND
`
`Plaintiffs,
`
`
`
`
`
`v.
`
`
`RWJ BARNABAS HEALTH, INC.
`
`
`Defendant.
`
`
`For their Complaint against Defendant RWJ Barnabas Health, Inc. (“RWJ”),
`
`Plaintiffs CarePoint Health Management Associates, LLC d/b/a CarePoint Health
`
`(“CarePoint Health”); Hudson Hospital OPCO, LLC d/b/a CarePoint Health –
`
`122902214-8
`
`
`
`
`
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`Christ Hospital (“Christ Hospital”); IJGK, LLC, IJKG PROPCO, LLC and IJGK
`
`OPCO, LLC d/b/a CarePoint Health – Bayonne Medical Center (“Bayonne
`
`Medical”) and HUMC OPCO, LLC d/b/a CarePoint Health – Hoboken University
`
`Medical Center (“HUMC”) (together “Plaintiffs” or “CarePoint”), by and through
`
`their attorneys, Dilworth Paxson LLP hereby allege as follows:
`
`PRELIMINARY STATEMENT
`This case involves a years-long systematic effort by RWJ, in
`
`1.
`
`conspiracy with others, to destroy competition and to monopolize the provision of
`
`general acute care hospital services and related health care services in northern
`
`New Jersey. This effort particularly targeted Hudson County, New Jersey, to the
`
`detriment of CarePoint and the public by aiming to destroy the three hospitals
`
`operated by CarePoint as independent competitors.
`
`2.
`
`RWJ’s goal was to force CarePoint into insolvency and, through this:
`
`(i) force a shutdown of Christ Hospital – the preeminent hospital in Hudson
`
`County, (ii) force a shutdown of Bayonne Medical and (iii) acquire HUMC
`
`because of its demographics and better payor mix. RWJ’s goal explicitly
`
`disregarded the needs of the poor, underinsured and charity care patients which
`
`CarePoint serves in its role as the safety net hospital system in Jersey City and
`
`surrounding areas.
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`2
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`3.
`
`The facts of this case reveal an intertwined web of schemes by RWJ
`
`and its conspirators to stifle marketplace competition that would otherwise benefit
`
`the consuming public by destroying CarePoint, which has been creating centers of
`
`medical excellence which benefit the Hudson County community.
`
`4.
`
`This conduct is only part of the long history of RWJ’s monopolistic
`
`conduct to tighten its control on general acute care hospital services (“GAC”) and
`
`related health care services in New Jersey generally, and specifically in Hudson
`
`County.
`
`5.
`
`RWJ’s conspirators include real estate players Avery Eisenreich
`
`(“Eisenreich”) and Yan Moshe (“Moshe”) whose sole goals are profit and greed
`
`and who have little interest in safety net hospitals. These conspirators have faced
`
`numerous legal challenges including RICO complaints against Moshe and Nizar
`
`Kifaieh (“Kifaieh”) and a recent weapons-related federal investigation within
`
`Moshe-controlled and Kifaieh-run Hudson Regional Hospital (“HRH”).
`
`6.
`
`Eisenreich is the subject of longstanding litigation brought by
`
`CarePoint in the Delaware Chancery Court for tortious interference with
`
`CarePoint’s business dealings and has been involved in several actions adverse to
`
`CarePoint over the past few years.
`
`7.
`
`He has transacted in property under the hospitals in Hoboken and
`
`Bayonne with conspirators Medical Properties Trust (“MPT”) and HRH without
`
`3
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`review by the New Jersey Department of Health (“NJDOH”). These dubious land
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`transactions have been used to undermine CarePoint and create uncertainty among
`
`its employees.
`
`8.
`
`President and soon-to-be CEO of RWJ, Mark Manigan has been the
`
`strategist for RWJ working to drive CarePoint to insolvency. His background in
`
`healthcare, and specifically as a healthcare attorney, makes him familiar with some
`
`of the actors conspiring against CarePoint. He also has a close relationship with
`
`Eisenreich and influence with the Governor’s office, which he has used along with
`
`RWJ’s vast political, administrative and real estate lobby to undermine competition
`
`– with a specific goal of eliminating CarePoint as a competitor of RWJ.
`
`9.
`
`RWJ’s pattern of serial acquisitions of competing hospitals and health
`
`care providers, as well as of the real estate necessary to operate competing
`
`hospitals, has gone unchecked by the state and NJDOH and has been tailored to
`
`destroy competition. Indeed, the recent attempted acquisition by RWJ of St.
`
`Peter’s Hospital in New Brunswick was blessed by the state but later prevented by
`
`antitrust enforcement action taken by the Federal Trade Commission.
`
`10.
`
`In pursuing its plan to achieve and extend its dominance in Hudson
`
`County, RWJ recognized the critical importance of maintaining a preferred
`
`relationship with the state’s largest health insurer, Horizon Blue Cross-Blue Shield
`
`(“Horizon”), as a factor in attracting insured patients. It also recognized the
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`4
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`significance of emergency room traffic as a significant driver of inpatient volume,
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`particularly among the uninsured and those covered by government programs, such
`
`as Medicare, Medicaid and TriCare. Thus RWJ engaged, in coordination with
`
`Horizon, in the establishment of a Satellite Emergency Department (“SED”) in
`
`Bayonne (in an area adjoining Jersey City), specifically targeting the CarePoint
`
`Hospitals.
`
`11. RWJ engaged in improper efforts to increase its emergency room
`
`traffic at CarePoint’s expense both through the SED, which was constructed and
`
`began operation without having received the legally required approval of the
`
`NJDOH, and by the flagrant disregard of a 2016 agreement settling earlier
`
`litigation regarding ambulance service in Jersey City and its environs – whereby
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`RWJ improperly diverted ambulances to its wholly owned Jersey City Medical
`
`Center (“JCMC”) to boost RWJ’s revenue, at the expense of patient health.
`
`12.
`
`JCMC shut down the majority of its charity care clinics in Hudson
`
`County and effected a shift of uninsured or underinsured patients to CarePoint
`
`while using the ambulance service to move more lucrative, insured patients, to
`
`RWJ hospitals.
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`5
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`13. Further, RWJ and its conspirators including, without limitation,
`
`HRH,1 Eisenreich, Horizon, Moshe and Kifaieh, have asserted undue influence on
`
`the NJDOH and the Governor’s office to hinder CarePoint from growing programs
`
`for the community, from receiving funds for serving the underinsured and
`
`underserved and also to create roadblocks in CarePoint’s evolution into a regional
`
`powerhouse in healthcare with a stable financial base.
`
`14. The conspirators colluded to pursue a common objective: to
`
`destabilize and eventually shut down CarePoint such that patients and revenue flow
`
`to the conspirators instead. These parties’ efforts, both public and surreptitious,
`
`sowed uneasiness among CarePoint employees and doctors and have directly
`
`contributed to economic harm to the CarePoint Hospitals in the form of decreased
`
`revenue and increased costs, threatening their very existence.
`
`15. Of the CarePoint Hospitals, HUMC, is the most desirable target for
`
`RWJ to take over, either by arm’s length acquisition or through bankruptcy, as
`
`HUMC has the most profitable payor mix of any of the CarePoint Hospitals.
`
`Further, RWJ already had its SED in Bayonne, so it had little incentive to acquire
`
`Bayonne Medical and would have much preferred to continue to drive it into the
`
`ground.
`
`
`1
`As explained later herein, HRH and its principals, while not defendants in this litigation,
`were intimately involved with Eisenreich in efforts to advance RWJ’s goals including controlling
`the real estate under the Hospitals, decimating CarePoint financially, and poaching CarePoint
`doctors.
`
`6
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`16. The growth and success of HUMC, coupled with the decision to
`
`continue operating the CarePoint Hospitals through physician-led leadership, made
`
`RWJ leadership uneasy and prompted RWJ to use its political connections in
`
`Hoboken, including the Hoboken Municipal Hospital Authority (“HMHA”), to
`
`drive HUMC into dire financial straits.
`
`17. Eisenreich also was, and remains, close with RWJ management and
`
`has at all pertinent times engaged in detailed conversations about the plan to,
`
`together with RWJ, destroy CarePoint for their mutual financial and strategic
`
`benefit. Eisenreich has, on numerous occasions, used his control of the real estate
`
`under the Hospitals to frustrate potential transactions involving CarePoint.
`
`18. Another effort to push CarePoint toward bankruptcy was a sham effort
`
`by RWJ to sign a 2019 LOI for the acquisition of Christ Hospital and HUMC.
`
`RWJ’s real intent was to gain market knowledge and gather competitive
`
`intelligence, and use this newly-acquired information to freeze programmatic
`
`growth and any significant hiring or construction at Christ Hospital.
`
`19. Notably, the offer included a provision whereby RWJ would fund
`
`operational losses after a certain date in 2021. Based on this provision, RWJ was
`
`aware of the cash burn, and knew that Christ Hospital and CarePoint would
`
`experience drastic consequences without additional funding. Based on this fact,
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`7
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`RWJ knew it could push the CarePoint Hospitals closer to the brink of closure
`
`without having to buy them.
`
`20. While CarePoint welcomed this original offer from RWJ, reasonably
`
`expecting that the offer was brought in good faith, RWJ and Eisenreich were
`
`engaging in backroom negotiations concealed from CarePoint. RWJ’s interest in
`
`acquiring any of the CarePoint Hospitals was contingent upon controlling the real
`
`estate under them. Eisenreich endeavored to preclude direct contact between RWJ
`
`and CarePoint with respect to any potential transactions involving the real estate.
`
`21. Negotiations between RWJ and CarePoint broke down as Eisenreich
`
`held the real estate “hostage.” RWJ circulated rumors of consolidation and closing
`
`of Christ Hospital or reducing it to a small Emergency Department. This had a
`
`material adverse effect on Christ Hospital’s operations, leading to attrition of
`
`physicians, employees and patients.
`
`22. This type of rumor-mongering also negatively affected employee
`
`retention at HUMC, and the other CarePoint Hospitals where after the departure of
`
`a significant number of nurses as a result of this news, the Hospitals were forced to
`
`cover the departures with a large number agency nurses paid at a premium rate
`
`about three times the rate of a typically-employed nurse. Specifically, HUMC
`
`incurred expenses averaging nearly $120,000 per pay period during 2022, or $3.1
`
`million annually. Moreover, the CarePoint Hospitals, together, incurred an
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`8
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`average of nearly 6,200 contract nursing hours per pay period during 2022 which
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`totals approximately $20.1 million in additional cost to the Hospitals.
`
`23. RWJ’s interest was never to actually carry out a transaction, but rather
`
`to eliminate CarePoint. In 2021, HMHA improperly sent out a Request for
`
`Indications (“RFI”)
`
`through Raymond James
`
`to garner
`
`interest, without
`
`CarePoint’s consent, for the sale of HUMC. Ahead of this distribution, RWJ,
`
`through its leadership, John Doll and Mark Manigan, engaged with HMHA and its
`
`contractor, Raymond James. This interaction with HMHA and Raymond James
`
`was calculated to devalue HUMC, and RWJ used insider information to assist
`
`HMHA and Raymond James on a plan of attack. RWJ’s entering into of a letter of
`
`intent with CarePoint came two years after reneging on its prior LOI based upon
`
`the bogus issue that it was unable to obtain the hospital real estate from Eisenreich.
`
`24. RWJ continued to spread false information and undermine confidence
`
`in the CarePoint system, with no intention to actually acquire CarePoint, but rather
`
`inflict upon it a “death by a thousand cuts,” striking strategic blows and inflicting
`
`damage until it was eliminated as a competitor.
`
`25. Further, there is significant reason to believe that RWJ influenced
`
`NJDOH in its decision to prevent CarePoint from being granted one or more
`
`Certificates of Need (“CN”), which were necessary for many initiatives, including
`
`the addition of behavioral health beds at Bayonne Medical. It is believed that
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`9
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`RWJ’s purpose in interfering with the NJDOH’s decision-making process was for
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`RWJ to continue to monopolize the behavioral health beds for involuntary
`
`commitment in Hudson County. The effect of this was profound on patients and
`
`staff in the Emergency Department as beds were not available in other facilities
`
`due to the ongoing epidemic of mental health issues in the community.
`
`26. The cost to Bayonne Medical in lost revenue from these behavioral
`
`beds exceeds $80 million since the original Certificate of Need request submitted
`
`in 2018 through 2022.
`
`27. CarePoint also has not received any funds from the State of New
`
`Jersey from the American Rescue Plan Act (“ARPA”), through which the Federal
`
`Government earmarked billions of dollars for healthcare and other facilities
`
`suffering losses from COVID and provided these funds to states to administer.
`
`While CarePoint has provided care to a disproportionate share of underinsured
`
`patients and “HHS distributed $10 billion in Provider Relief Funds to safety net
`
`hospitals that serve our most vulnerable citizens,”2 including $292,828,986 to New
`
`Jersey hospitals, CarePoint has received no ARPA funds. This surprising result is
`
`a direct result of RWJ’s influence in Trenton and close ties between Mark Manigan
`
`and the Governor’s office.
`
`
`2
`Targeted distributions. HRSA.
`distribution)
`
`(https://www.hrsa.gov/provider-relief/data/targeted-
`
`10
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`
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`28. Upon information and belief, and along the same lines, RWJ has used
`
`its deep pockets to offer employment to influential government officials and
`
`administrators with the aim of helping RWJ push competing healthcare systems
`
`into financial trouble.
`
`29. Additionally,
`
`the
`
`intentional, ongoing disparaging remarks by
`
`principals of HRH to local politicians and NJDOH caused negative effects on the
`
`business operations of all of the CarePoint Hospitals.
`
`30. Further, RWJ tried to steer referrals away from CarePoint, using
`
`information obtained through Horizon. Letters were sent to certain doctors who
`
`regularly referred patients to CarePoint specialists and facilities to induce these
`
`physicians to refer patients to RWJ instead. These letters included discussion of
`
`incentives such as enhanced rates and patient management fees to physicians to
`
`refer patients to RWJ. Furthermore, RWJ poached one of the leading CarePoint
`
`practitioners, who RWJ encouraged to violate his restrictive covenant.
`
`31. After RWJ made clear its lack of interest in acquiring Bayonne
`
`Medical in late 2019, HRH made a hollow offer to purchase Bayonne Medical that
`
`left many of CarePoint’s requirements on the cutting room floor. HRH had no real
`
`incentive to expend significant resources to acquire Bayonne Hospital for itself.
`
`While licensed as a general acute care hospital, HRH had a significant focus on
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`11
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`same day surgery (primarily orthopedic). This was the same focus as BMC
`
`Hospital LLC (“BMC”), its rival to acquire the Bayonne facility from CarePoint.
`
`32.
`
`It was important for HRH that BMC not succeed in acquiring that
`
`facility. It is significant that HRH acquired the Bayonne real estate from
`
`Eisenreich the same day that CarePoint and BMC announced their sale of the
`
`Bayonne Medical assets to BMC. Moreover, HRH did not put up the money for
`
`the land acquisition, which was financed entirely by the seller, one of Eisenreich’s
`
`entities. HRH’s clear motivation, as facilitated by Eisenreich, was to block the sale
`
`and put Bayonne Medical Center out of business in collusion with RWJ.
`
`33. RWJ states its vision as to “[c]reate and sustain healthy communities,
`
`together,” noting that it is “committed to the ongoing improvement of the health,
`
`quality of life, and vitality of our communities.”3 The idea that RWJ would use its
`
`influence to jeopardize the health of that community and the care providers of a
`
`competing hospital not only directly contradicts its own vision, but clearly
`
`demonstrates that RWJ is far more interested in anti-competitive and predatory
`
`business activities than serving the New Jersey community.
`
`34. The efforts of RWJ and its conspirators have created a stalemate in the
`
`progress of health care in Hudson County, mired in litigation in two states with a
`
`
`3
`RWJBarnabas Health – (https://www.rwjbh.org/)
`
`12
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`very real risk of eliminating any Hudson County based provider from having a
`
`meaningful role in the delivery of acute hospital care.
`
`35. Plaintiffs seek relief from this Court under the Federal Antitrust Laws
`
`and the New Jersey Antitrust Act.
`
`PARTIES
`36. Plaintiff CarePoint Health is a limited liability company organized
`
`under the laws of the State of New Jersey, having a principal place of business
`
`located at 10 Exchange Place, 15th Floor, Jersey City, New Jersey 07302.
`
`37. Plaintiff Christ Hospital is a limited liability company, organized
`
`under the laws of the State of Delaware, with its principal place of business at 176
`
`Palisade Avenue, Jersey City, NJ 07306.
`
`38. Christ Hospital operates a 349-bed fully accredited acute care
`
`hospital. With a highly-qualified team – including more than 500 doctors with
`
`specialties ranging from allergies to vascular surgery – Christ Hospital offers a full
`
`spectrum of services and has been recognized for excellence in cardiovascular,
`
`respiratory, and newborn care. As a state-certified Stroke Center and Primary
`
`Angioplasty Center, Christ Hospital provides lifesaving emergency interventions
`
`with outcomes that rank among the best of New Jersey. In 2021, Christ Hospital
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`13
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`was ranked the most “Socially Responsible” hospital in the United States by the
`
`prestigious Lown Institute, for equitable care.4
`
`39. Plaintiff Bayonne Medical is a limited liability company, organized
`
`under the laws of the State of New Jersey, with its principal place of business at
`
`29th Street and Avenue E, Bayonne, New Jersey.
`
`40. Bayonne Medical operates a 244-bed, fully accredited acute care
`
`hospital that provides quality, comprehensive, community-based health care
`
`services to more than 70,000 people annually. Its facilities include 19 full-service
`
`emergency room bays, 205 medical/surgical beds, 10 obstetrical beds, 14 adult
`
`ICU/CCU beds, and 15 adult, acute psychiatric beds. The service complement
`
`consists of six inpatient operating rooms, two cystoscopy rooms, one full-service
`
`cardiac catheterization lab, 12 chronic hemodialysis stations, one MRI unit,
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`emergency angioplasty services, elective angioplasty, two hyperbaric chamber
`
`units, and a PET-CT diagnostic imaging unit.
`
`41. Plaintiff HUMC is a limited liability company, organized under the
`
`laws of the State of Delaware, with its principal place of business at 308 Willow
`
`Avenue, Hoboken, NJ 07030.
`
`
`4
`Christ Hospital ranked #1 on Lown Institute’s Most Socially Responsible Hospitals in
`America
`list
`–
`(https://carepointhealth.org/2021/09/21/christ-hospital-ranked-1-on-lown-
`institutes-most-socially-responsible-hospitals-in-america-list/)
`
`14
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`42. HUMC operates a 348-bed fully accredited general acute care
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`hospital. HUMC provides advanced medical technologies in support of its medical
`
`staff, nursing team, and other caregivers, to enable state-of-the-art care to citizens
`
`of Hoboken and the surrounding communities. HUMC offers excellence in
`
`emergency medicine in the 34-bay emergency room and the dedicated OB/GYN
`
`ED; inpatient rehabilitation; transitional care; child and adult behavioral health;
`
`women’s care; wound care; and numerous surgical subspecialties. The American
`
`Heart and Stroke Association awarded the Silver Award to HUMC for its
`
`dedication to improving quality of care for stroke patients. Overall, HUMC was
`
`ranked in the top ten hospitals in New Jersey for care quality among all hospitals in
`
`the state with 350 beds or fewer.
`
`43. Defendant RWJ is a New Jersey corporation with its principal place of
`
`business at 95 Old Short Hills Rd, West Orange, NJ 07052. RWJ is one of the
`
`largest health care systems in New Jersey. As described further below RWJ owns
`
`and operates Jersey City Medical Center (JCMC), a full service, acute care hospital
`
`in Hudson County, and many other healthcare facilities.
`
`VENUE AND JURISDICTION
`44. This Court has jurisdiction over the subject matter of this action
`
`pursuant to 28 U.S.C. §§ 1331 and 1337, and over the state law claims asserted
`
`herein under 28 U.S.C. § 1367.
`
`15
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`45. This Court has personal jurisdiction over the defendant RWJ as it
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`resides, does business in, and has a principal place of business in New Jersey.
`
`Venue in this district is proper because the parties are located in and/or a
`
`substantial part of the events took place in this district.
`
`FACTUAL BACKGROUND
`A. The CarePoint Hospitals
`46. Between 2008 and 2012, Vivek Garipalli, James Lawler and Jeffrey
`
`Mandler (together, the “Founders”), by and through various entities, purchased out
`
`of bankruptcy the assets of HUMC, Christ Hospital, and Bayonne Medical (the
`
`“CarePoint Hospitals” or “the Hospitals”).
`
`47. The CarePoint Hospitals are affiliated through overlapping ownership
`
`of entities and trusts associated with the Founders.
`
`48. After buying the Hospitals’ assets, the Founders invested time, labor,
`
`and capital to improve the Hospitals’ physical plants, equipment, and finances, as
`
`well as the overall quality of healthcare services provided by the Hospitals. Under
`
`the Founders’ leadership and with the incredible support of all the physicians,
`
`nurses and staff, the Hospitals became leading acute health care service facilities in
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`Hudson County and the State of New Jersey.
`
`49.
`
`In addition to demonstrably improving health care for New Jersey
`
`residents, the Founders’ efforts to rescue the Hospitals from bankruptcy have saved
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`thousands of jobs and generated substantial economic benefits to Hudson County
`
`and, more generally, to the State of New Jersey. The new owners’ efforts to rescue
`
`the Hospitals from bankruptcy generated huge economic benefits to Hudson
`
`County and the State. CarePoint Hospitals create a significant positive economic
`
`impact for New Jersey in terms of both in-state operating expenditures of hundreds
`
`of millions of dollars annually (e.g. $384 million in 2014) and significant capital
`
`expenditures (e.g. $177.8 million for the years 2014-2017).
`
`50. To illustrate, the economic impacts for New Jersey of the above-
`
`referenced CarePoint expenditures include:
`
`a.
`
`8,167 direct and indirect jobs or job-years (one job lasting more
`
`b.
`
`c.
`
`d.
`
`e.
`
`than one year);
`
`$815.2 million in gross domestic product;
`
`$653.9 million in compensation to employees;
`
`$23.5 million in state government revenues; and
`
`$8.7 million in local government (county, municipal, school
`
`district) revenues outside Hudson County.
`
`51. Most recently CarePoint’s leadership team have taken steps to
`
`transition the CarePoint Hospitals to a new non-profit entity – a move lauded by
`
`the communities which the Hospitals serve. Unless they are destroyed by the
`
`unlawful and predatory conduct of RWJ and others (which is the subject of this
`
`17
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`Case 2:22-cv-05421-EP-CLW Document 1 Filed 09/06/22 Page 18 of 69 PageID: 18
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`and other pending litigation), CarePoint Health’s three hospitals will continue to
`
`operate in their current form and will be controlled by a new nonprofit
`
`organization. CarePoint’s top priority as a non-profit is to work collaboratively
`
`with the Hudson County community to maintain critical health care for those who
`
`need it most. CarePoint has also taken significant strides in partnering with
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`Columbia University Hospital, New York Presbyterian, the Rothman Institute and
`
`has a pending memorandum of understanding with Mt Sinai Health Systems to
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`bring world class specialty care to Hudson County patients.
`
`52. The announcement of CarePoint’s conversion to non-profit status was
`
`praised by Jersey City Mayor Steve Fulop, who stated that “Christ Hospital and
`
`CarePoint have been critical partners with the city and the community before and
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`during the pandemic, ensuring residents throughout the area have access to the top-
`
`quality health care they deserve, and, so, if transitioning to a nonprofit organization
`
`is the best way to further the life-saving services they offer, then we will, of
`
`course, support that,” noting that the move “only strengthens the importance of
`
`Christ Hospital for the entire community.”5
`
`
`5
`Tom Bergeron - CarePoint Health beginning process of becoming a nonprofit (here’s
`next),
`ROI-NJ.com
`(https://www.roi-
`why
`—
`and
`what
`happens
`nj.com/2021/10/06/healthcare/carepoint-health-beginning-process-of-becoming-a-nonprofit-
`heres-why-and-what-happens-next/)
`
`
`18
`
`
`
`Case 2:22-cv-05421-EP-CLW Document 1 Filed 09/06/22 Page 19 of 69 PageID: 19
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`53. Further Bayonne Mayor Jimmy Davis stated that “CarePoint’s
`
`conversion into a nonprofit will allow the residents of Bayonne to continue having
`
`the broadest range of quality health care services made available to them.” Id.
`
`B. RWJ Barnabas Health
`54. RWJ is the largest and most comprehensive healthcare system in the
`
`state of New Jersey, providing treatment and services to more than three million
`
`patients each year.6 In 2021, RWJ reported approximately $6.6 billion in revenue.
`
`55. RWJ has become the largest healthcare system in New Jersey through
`
`a series of acquisitions. In 2016, Barnabas Health and Robert Wood Johnson
`
`Health System merged to create RWJ, which then controlled eleven general acute
`
`care hospitals across New Jersey.
`
`56. On January 1, 2022, RWJ closed on its acquisition of Trinitas
`
`Regional Medical Center in Union County. RWJ now operates 12 hospitals,
`
`several ambulatory surgical centers, a pediatric rehabilitation hospital, and a
`
`freestanding behavioral health center. RWJ also operates many other health care
`
`facilities and medical practices, especially in Hudson County, which generate
`
`significant patient revenue and provide increased patient flow to its inpatient acute
`
`care hospitals.
`
`
`6 RWJ Barnabas - https://www.rwjbh.org/why-rwjbarnabas-health-/
`
`19
`
`
`
`Case 2:22-cv-05421-EP-CLW Document 1 Filed 09/06/22 Page 20 of 69 PageID: 20
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`57. Starting in 2019, RWJ began discussions to acquire St. Peter’s
`
`Healthcare, based in New Brunswick, Middlesex County, which operates an
`
`independent hospital. In addition to the hospital, Saint Peter’s Healthcare employs
`
`physicians, and has other healthcare-related subsidiaries and joint ventures. In
`
`2021, Saint Peter’s Healthcare reported approximately $579 million in revenue.
`
`58. New Jersey State officials and the NJDOH quickly approved the
`
`merger in May 2022. However, the FTC unanimously moved to block it, stating
`
`the RWJ-Saint Peter’s merger would create an entity with control of 50% of the
`
`acute care market in Middlesex County. FTC Bureau of Competition Director
`
`Holly Vedova concluded that “There is overwhelming evidence that this
`
`acquisition would be bad for patients[.]”7
`
`59. After the Federal Trade Commission commenced its proceeding to
`
`block the St. Peters acquisition, RWJ abandoned the proposed transaction, stating
`
`that it was “disappointed” that the FTC had acted to block the transaction after it
`
`had “received full approval from New Jersey’s Attorney General” and received
`
`support from “managed care organizations and elected officials at all levels within
`
`the State of New Jersey.”8
`
`
`7
`Spencer Kent - Two N.J. health systems want to merge. But the feds say it’s bad for
`patients. NJ.com, June 3, 2022 (https://www.nj.com/healthfit/2022/06/two-nj-health-systems-
`want-to-merge-but-the-feds-say-its-bad-for-patients.html)
`
`Jeffrey Kanige - FTC moves to block RWJBarnabas-Saint Peter’s deal, NJBIZ June 3,
`
`2022 (https://njbiz.com/ftc-moves-to-block-rwjbarnabas-saint-peters-deal/)
`
` 8
`
`20
`
`
`
`Case 2:22-cv-05421-EP-CLW Document 1 Filed 09/06/22 Page 21 of 69 PageID: 21
`
`60.
`
`It is unsurprising that the RWJ/St. Peter’s merger required FTC
`
`intervention, as RWJ has a long history of “smooth sailing” at all levels of New
`
`Jersey local and state government and specifically with the NJDOH.
`
`61. To that end, RWJ CEO Barry Ostrowsky asked in a May 2022
`
`interview regarding the St. Peter’s acquisition “Who’s making health care policy in
`
`New Jersey?” – then posited that it should not be “the FTC, a federal agency that
`
`may not best know the needs of the people of New Jersey,” but rather should be
`
`“the government of New Jersey” and “the elected officials” noting specifically that
`
`RWJ has “a bunch of support from people at every level of elected officials[.]”9
`
`62. As noted later, RWJ’s confidence that it could operate unchecked at
`
`all levels of government in New Jersey led to RWJ making business decisions such
`
`as constructing and opening a facility in Bayonne before even being approved by
`
`the state. Clearly RWJ is so well entrenched in New Jersey bureaucracy that it
`
`views required governmental approvals as little more than a rubber stamp.
`
`
`9
`Tom Bergeron - Transformative academic medical center in N.J. is 1 approval away
`involved are concerned but hopeful, NJBIZ, May 12, 2022
`from reality —
`those
`(https://www.roi-nj.com/2022/05/12/healthcare/transformative-academic-medical-center-in-n-j-
`is-1-approval-away-from-reality-but-those-involved-fear-it-wont-come/)
`
`21
`
`
`
`Case 2:22-cv-05421-EP-CLW Document 1 Filed 09/06/22 Page 22 of 69 PageID: 22
`
`C. RWJ’s Decade-Long Mission to Monopolize New Jersey
`Healthcare Markets
`1.
`RWJ’s Efforts to Decimate CarePoint through Opening an
`SED in Bayonne Medical’s Backyard
`In its first foray directly into Hudson County, RWJ purchased Jersey
`
`63.
`
`City Medical Center in 2013. At that time, high-l