CarePoint Health, more than $100 million in debt, declares bankruptcy
Taken From NJ.com
By Ron Zeitlinger | The Jersey Journal
November 4, 2024
CarePoint Health, the Hudson County non-profit healthcare system teetering on the brink of collapse, filed for bankruptcy Sunday in documents that revealed its debt is more than $100 million.
The company issued a news release Monday morning, putting a positive spin the long-awaited Chapter 11 filing, saying it has obtained $67 million in new financing to ensure that its hospitals remain open and that there will be no interruptions to its ability to provide patient care in the communities it serves throughout this process.
Chapter 11 bankruptcy allows some breathing room for the debtor, CarePoint, to reorganize its finances and continue operating.
CarePoint Health oversees the operations of three hospitals, Bayonne Medical Center, Christ Hospital in Jersey City and Hoboken University Medical Center. Last week CarePoint and Hudson Regional Hospital announced they would merge to form a new healthcare system, Hudson Health.
Importantly, CarePoint officials say, necessary steps have been taken to ensure that salary and benefits continue for employees and that their ability to provide compassionate care to each patient will not be materially impacted.
A list of the top 30 creditors includes CarePoint Health Captive Assurance ($18.9 million), a related company, as well as the Internal Revenue Service ($16.9 million), PSE&G ($5.3 million), Hudson County ($15.7 million) and the state Division of Taxation ($3.5 million).
It does not appear the lists debt includes the millions CarePoint has fallen behind on rent payments on the three hospital properties.
A full list of creditors, including individuals, stands are approximately 7,500.
CarePoint officials blamed the dramatic increase in direct costs of operating the hospitals after COVID-19 pandemic, insufficient state funding, and persistent reimbursement challenges that hospitals across the country have been facing.
“We chose this path after we thoroughly evaluated all available options that would ensure the continued delivery of uninterrupted care while enabling this necessary financial restructuring,” said Dr. Achintya Moulick, the chairman of CarePoint’s board of trustees and also the CEO and president of the company. “Safety net hospitals like Christ Hospital and Hoboken University Medical Center are vital lifelines for the uninsured, underinsured, and most vulnerable populations. We are proud to have kept our doors open these past five years despite an extremely challenging environment.
“We are also grateful for our employees and physicians across the organization, whose deep commitment to addressing health inequities and delivering high-quality, compassionate care to our communities has been unwavering.”
Court filings and additional information are available at https://dm.epiq11.com/Carepoint.
According to the filings, the law group Dilworth Paxson was paid nearly $800,000 for bankruptcy preparation and more than $2.4 million to represent CarePoint Health in litigation, for a total of more than $3.2 million.