MINUTES OF THE STATE HEALTH PLANNING BOARD MEETING Thursday, November 2, 2017 DRAFT

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1 MINUTES OF THE STATE HEALTH PLANNING BOARD MEETING Thursday, November 2, 2017 Members Present: Connie Bentley McGhee, Chairperson Dr. Judy Donlen (via phone) Catherine Ainora (via phone) Henry Kane Susan Olzewski (via phone) Michael Gross Susan Dougherty (Representing Commissioner Bennett, Department of Health) Susan Brewen-Alvino (Representing Commissioner Blake, Department of Children & Families) Louise Patterson (Representing Commissioner Connolly, Department of Human Services) Excused Absent: Dr. Joseph Barone Michael Baker Dr. Poonam Alaigh Jon Brandt Staff: John Calabria Susan Dougherty Jamie Hernandez T. Nicole Williams-Parks, DAG CALL TO ORDER Connie Bentley McGhee, Chairperson opened the meeting at the Department of Health, Market and Warren St., H&A Bldg., 1 st Floor, Auditorium, NJ on Thursday, November 2, 2017.

2 MOTION SUMMARY 1. Approval of October 10, 2017 minutes Motion Ms. Olszewski, Second Mr. Kane 2. Approval of Certificate of Need Application for the Transfer of Ownership of Meadowlands Hospital Medical Center Motion Dr. Donlen, Second Mr. Gross

3 November 2, 2017 VOTING RECORD VOTING BOARD MEMBER ROLL 1 2 Dr. Donlen X Y Y Ms. Ainora X Y N Mr. Kane X Y Y Ms. Olszewski X Y N Ms. Bentley-McGhee X Y N Dr. Barone Mr. Baker Mr. Gross X - Y Dr. Alaigh Mr. Brandt Ms. Gibson non voting member X - - Ms. Patterson non voting member X - - Ms. Brewen-Alvino non voting member Total Total Absent X Y 0-N 0-A 0-R 3-Y 3-N 0-A 0-R KEY: Y=YES N=NO A=ABSTAIN R=RECUSE

4 1 STATE HEALTH PLANNING BOARD PUBLIC MEETING IN RE: MEADOWLANDS HOSPITAL MEDICAL CENTER November 2, Location: Department of Health 369 So. Warren Street 9 Trenton, New Jersey Time: Commencing at 9:46 a.m. Adjourning 11:27 a.m Chairperson, Connie Bentley-McGhee BOARD MEMBERS PRESENT: 17 Alison Gibson, Louise Patterson, Suzanne Brewen-Alvino, Henry Kane, 18 Michael Gross. Nicole Williams Parks, D.A.G ATTENDING VIA TELECONFERENCING: 21 Dr. Judy Donlen, Catherine Ainora, Susan Olszewski ROSENBERG & ASSOCIATES, INC Vreeland Road - Suite 204 Florham Park, New Jersey

5 2 1 2 INDEX OF SPEAKERS NAME PAGE 5 John A. Calabria 7 6 Bernie Gerard, Jr Yan Moshe 52 8 Felicia Karsos 56 9 John Grywalski Court Reporter: 13 Michelle Palamarchuk, Registered Merit Reporter and Certified Reporter of the State 14 of New Jersey

6 3 1 MS. McGHEE: Good morning. My 2 name is Connie McGhee. I would like 3 to call the meeting of the State 4 Health Planning Board to order and 5 I'm standing just so I can see 6 everyone at least one time because I 7 know you've got to come up and speak 8 and I don't want to miss who I'm 9 listening to. 10 MS. HERNANDEZ: This is a formal 11 meeting of the State Health Planning 12 Board. Notice of this meeting has 13 been published in accordance with the 14 provisions of Chapter 231, Public Law , C-10:4.10 of the State of New 16 Jersey entitled Open Public Meeting 17 Act. 18 I will call roll now. 19 Ms. Gibson. 20 MS. GIBSON: Yes. 21 MS. HERNANDEZ: Ms. Patterson. 22 MS. PATTERSON: Yes. 23 MS. HERNANDEZ: Ms. 24 Brewen-Alvino. 25 MS. BREWEN-ALVINO: Yes.

7 4 1 MS. HERNANDEZ: Ms. 2 Williams-Parks. 3 MS. WILLIAMS-PARKS: Yes. 4 MS. HERNANDEZ: Ms. Ainora. 5 MS. AINORA: Yes. 6 MS. HERNANDEZ: Mr. Kane. 7 MR. KANE: Yes. 8 MS. HERNANDEZ: Ms. Olszewski. 9 MS. OLSZEWSKI: Yes. 10 MS. HERNANDEZ: Ms. 11 Bentley-McGhee. 12 MS. McGHEE: Yes. 13 MS. HERNANDEZ: Dr. Barone. 14 (No response.) 15 MS. HERNANDEZ: Mr. Gross. 16 (No response. Arrives at 9:54) 17 MS. HERNANDEZ: Mr. Baker. 18 (No response.) 19 MS. HERNANDEZ: Dr. Alaigh. 20 (No response.) 21 MS. HERNANDEZ: Mr. Brandt. 22 (No response.) 23 MS. HERNANDEZ: Dr. Donlen. 24 MS. DONLEN: Here. 25 MS. HERNANDEZ: We have eight

8 5 1 members present, which does 2 constitute a forum. 3 MS. McGHEE: So at this time 4 we'll have an approval for the 5 reading for the October 10th, minutes. 7 Could I have a motion. 8 MS. OLSZEWSKI: Just a minute, 9 Connie. 10 Can you hear me, Ms. McGhee? 11 MS. McGHEE: Yes, we can. 12 MS. OLSZEWSKI: No? 13 MS. HERNANDEZ: Yes, we can. 14 MS. OLSZEWSKI: It's a material 15 change on page MS. HERNANDEZ: Wait one second. 17 MS. OLSZEWSKI: Okay. Line should be "16 open and 16 closed." 19 MS. HERNANDEZ: Okay. 20 MS. OLSZEWSKI: So if that was a 21 motion, we need to make sure it's 22 accurate. 23 MS. McGHEE: So is there a 24 motion to approve the minutes with 25 the corrections as noted by Ms.

9 6 1 Olszewski? 2 MR. KANE: Some of it. 3 MS. OLSZEWSKI: I so move. 4 MR. KANE: I'll second. 5 MS. McGHEE: Shall we have roll 6 call. 7 MS. HERNANDEZ: Yes. 8 MS. Ainora. 9 MS. AINORA: Here, yes. 10 MS. HERNANDEZ: Mr. Kane. 11 MR. KANE: Yes. 12 MS. HERNANDEZ: Ms. Olszewski. 13 MS. OLSZEWSKI: Yes. 14 MS. HERNANDEZ: Ms. 15 Bentley-McGhee. 16 MS. McGHEE: Yes. 17 MS. HERNANDEZ: Dr. Donlen. 18 MS. DONLEN: (No response.) 19 MS. HERNANDEZ: Dr. Donlen, do 20 you have your phone muted? 21 MS. DONLEN: In fact, I do and I 22 couldn't find the mute button. 23 Yes. 24 MS. HERNANDEZ: Thank you. 25 We have five yeses. Motion is

10 7 1 moved. Thank you. 2 MS. McGHEE: Do we have a 3 Commissioner's report this morning? 4 MS. GIBSON: There's no report 5 this morning. 6 MS. McGHEE: No report. Thank 7 you. 8 So at this point we'll go right 9 to the main reason why we're here, 10 it's for the Certificate of Need 11 application for the transfer of 12 ownership of Meadowlands Hospital 13 Medical Center. So I'll ask for the 14 Department's presentation at this 15 time. 16 MR. CALABRIA: Good morning to 17 members of the Board. My name is 18 John Calabria. I'm director of the 19 Department's MS. OLSZEWSKI: Excuse me. I 21 can't here John. 22 MR. CALABRIA: My name is John 23 Calabria. I'm the director of 24 Certificate of Need and Healthcare 25 Facility Licensing at the New Jersey

11 8 1 Department of Health and I'm here to 2 present the application submitted by 3 the applicant to acquire Meadowlands 4 Hospital Medical Center for the 5 transfer of ownership of the 6 hospital. 7 MS. HERNANDEZ: We're going to 8 move the speaker closer to John for 9 those of you on the phone. Let us 10 know if it's still a problem. 11 MS. McGHEE: John, if you don't 12 mind, before you start, have all the 13 board members had an opportunity to 14 read the Department's 15 recommendations? 16 MR. KANE: Yes. 17 MS. OLSZEWSKI: Yes. 18 MR. CALABRIA: Thank you very 19 much. So I'll be starting on page of the staff recommendations. 21 While staff have concerns with 22 the consistent low utilization at the 23 hospital and with the fact that the 24 applicant is borrowing a significant 25 amount of the purchase price from the

12 9 1 current owner, based on the 2 documentation of compliance with 3 regulatory and statutory criteria, 4 Department staff recommends approving 5 the transfer of ownership of the 6 hospital, Meadowlands Hospital 7 Associates, to the applicant for the 8 following reasons and with the 9 conditions that I will note below. 10 Reason number one: The 11 applicant is committed to continue to 12 operate the hospital as a general 13 hospital with no disruption of 14 services, no reduction of services 15 and at the same level of licensed bed 16 and services as currently operating 17 at the hospital. 18 Staff agrees that the 19 maintenance of the hospital with its 20 current bed and service complement 21 will not have a negative impact on 22 other area hospitals upon transfer. 23 Number two: The applicant has 24 committed to hire substantially all 25 the individuals who are employed at

13 10 1 the hospital at the time of the 2 closing of the transfer of ownership. 3 Three: The applicant has stated 4 that it will maintain all the 5 existing charity care policies 6 currently in place at the hospital 7 and that it will continue to ensure 8 access to quality healthcare services 9 to the Secaucus community without 10 regard to patients' ability to pay. 11 And number four: The applicant 12 complies with Department's general 13 transfer of ownership criteria, in 14 other words, there is a willing buyer 15 and a seller; the buyer has presented 16 a financially feasible project, and 17 the buyer has an acceptable licensing 18 track record. 19 Now I'll get into the 20 conditions, and most of these 21 conditions the Board has seen before. 22 Based on the documentation of 23 compliance with regulatory and 24 statutory criteria, Department staff 25 recommends approving this transfer

14 11 1 with the following conditions: 2 One, the applicant shall file a 3 licensing application with the 4 Department's Division of CN and 5 Licensing, the Division, to execute 6 the transfer of the ownership of the 7 assets from the current owner to the 8 applicant. 9 Number two, the applicant agrees 10 to retain substantially all of the 11 current employees at the hospital. 12 Six months after licensure the 13 applicant, the new owner if you 14 should approve this application, 15 shall document to the Division the 16 number of full time, part time and 17 per diem employees retained and 18 provide the rationale for any 19 workforce reductions. 20 MS. McGHEE: Excuse me just one 21 second. I would like to note that 22 board member Michael Gross has joined 23 us. 24 MR. GROSS: And I apologize for 25 my tardiness, Madame Chairman.

15 12 1 MS. McGHEE: You may continue. 2 MR. CALABRIA: Condition Number 3 Three: Within 60 days of licensure, 4 the applicant shall notify the 5 Division in writing of the individual 6 who is responsible for the 7 safekeeping and assessability of all 8 the hospital's patients' medical 9 records both active and stored in 10 accordance with law and regulation. 11 Number Four: Within 12 months 12 of licensure and annually thereafter 13 for five years the applicant shall 14 provide the Division with a written 15 report detailing: 16 (a) Its plan to reduce 17 unnecessary and duplicative services 18 and excess inpatient beds, if any. 19 (b) Its plan for addressing the 20 need to expand or add ambulatory care 21 services. 22 And (c) Capital improvement 23 plans including physical plant 24 improvements, equipment upgrades and 25 additions including IT and other

16 13 1 capital projects. 2 Five: The applicant shall 3 invest in programs designed to 4 improve public, health community 5 health services, and health and 6 wellness and within 12 months of 7 licensure shall provide the Division 8 with a written sustainability plan 9 detailing how it intends to ensure 10 the financial viability of such 11 programs. 12 The applicant's investment in 13 such programs shall be coordinated 14 with this development and 15 implementation of the community 16 health needs assessment referenced in 17 Condition Condition 6: The applicant 19 shall operate the hospital as a 20 general hospital in compliance with 21 all regulatory requirements. Any 22 changes involving either a reduction, 23 relocation out of the hospital's 24 current service area or elimination 25 of the clinical services or community

17 14 1 health programs offered by the 2 hospital's former ownership shall 3 require prior written approval from 4 the Department and shall be subject 5 to all applicable statutory and 6 regulatory requirements. 7 And I want to apologize to the 8 Board, Condition 6, which I just 9 read, 7 says virtually the same thing 10 and we did not notice that before we 11 sent it out. I apologize. Strike 12 out what's listed as Condition We'll change the numbers MS. McGHEE: Thank you. 15 MR. CALABRIA: The next 16 condition is 8 on the sheet: As 17 noted in the CN application, the 18 applicant shall continue all clinical 19 services currently offered at 20 Meadowlands and for the hospital 21 patients. Any changes in this 22 commitment involving either reduction 23 or relocation of the service area or 24 elimination shall require prior 25 written approval. That sound likes

18 15 1 the same one repeated again. I don't 2 know how that happened. I apologize. 3 Number Nine: The applicant 4 shall continue compliance with NJAC 5 8:43G-5.21(a), the hospital licensing 6 standard, which requires that all 7 hospitals provide on a regular and 8 continuing basis outpatient and 9 preventive services including 10 clinical services for medically 11 indigent patients for those services 12 provided on an inpatient basis. 13 Documentation of compliance shall be 14 submitted within 30 days of the 15 issuance of a license and annually 16 thereafter for a period of five 17 years. 18 In accordance -- Condition here but we'll have to change the 20 numbers, as I mentioned. 21 In accordance with law and 22 regulation, the applicant shall not 23 only comply with federal Emergency 24 Medical and Labor Act better known as 25 EMTALA requirements, but also provide

19 16 1 care for all patients who present 2 themselves at Meadowlands without 3 regard to their ability to pay or 4 payment source and shall provide 5 unimpaired access to all services 6 offered by the hospital. 7 Eleven: The value of indigent 8 care provided by the hospital shall 9 be determined by the dollar value of 10 documented charity care calculated at 11 the prevailing Medicaid rate and 12 shall not be limited to the amount of 13 charity care provided historically by 14 Meadowlands. 15 Within 60 days of licensing the 16 applicant shall establish a governing 17 board for the hospital responsible 18 for (a) representing the hospital in 19 the community and taking into account 20 the views of the community in its 21 deliberation. 22 (b) Participating in the 23 Meadowland Hospital Medical Center 24 community outreach programs. 25 (c) Supervising the hospital's

20 17 1 charity care policies and practices. 2 (d) Monitoring financial 3 indicators and benchmarks. 4 (e) Monitoring quality of care 5 indicators and benchmarks. 6 And (f) Developing and 7 implementing a community health needs 8 assessment that aligns itself with 9 Healthy New Jersey 2020, the State's 10 health improvement plan and health 11 promotion and disease prevention 12 agenda for the decade. 13 The governing board shall adopt 14 bylaws and maintain minutes of 15 monthly meetings. Applicant shall 16 submit to the Division on an annual 17 basis a current working description 18 of the governing board's authority, 19 roles and responsibilities and 20 governance authority. 21 On an annual basis hospital 22 shall submit to the Division the 23 governing board's roster and advise 24 the Division of any significant 25 changes to the governing board's

21 18 1 policies and governing board 2 composition, governance authority and 3 board appointments made during each 4 year that the hospital is in 5 operation. 6 The governing board shall 7 maintain suitable representation of 8 the residing population of the 9 hospital's service areas who are 10 neither themselves employees of, nor 11 related to, employees or owners of 12 MHA or any parent, subsidiary 13 corporation or any corporate 14 affiliate of MHA. 15 Within 30 days of licensing 16 applicant shall provide the Division 17 with an organization chart of the 18 hospital and each service that shows 19 lines of authority, responsibility, 20 and communication between the 21 applicant and hospital management and 22 the governing board. 23 Fourteen: Every 12 months for 24 the next five years, starting on the 25 date a license is issued to the

22 19 1 applicant, applicant shall report to 2 the Division the progress on the 3 implementation and measured outcomes 4 of the following initiatives noted in 5 the application and in these staff 6 recommendations which I'll mention 7 below to improve the operational 8 efficiency and quality of care at the 9 hospital and shall present the most 10 current report to the public at the 11 hospital's annual public meeting. 12 (a) Negotiations with health 13 insurers on new contracts to generate 14 better access for patients at the 15 hospital. 16 (b) Efforts to fill service gaps 17 to actively recruit new physicians 18 and encourage those physicians who 19 previously utilized the hospital to 20 once again return to provide care. 21 (c) Efforts to work in 22 conjunction with community leaders 23 and their own medical staff as well 24 as surrounding hospitals to identify 25 healthcare needs for more specialized

23 20 1 services and recruit appropriate 2 medical staff to fill in any service 3 gaps. 4 (d) Efforts to implement a 5 community outreach program to provide 6 more accessible primary care in an 7 effort to change the community 8 culture of using the emergency 9 department as a primary care 10 provider, thereby allowing the 11 emergency department to function as 12 intended for the delivery of 13 emergency care and: 14 (e) Efforts to expand outpatient 15 services and reduce or eliminate 16 duplicative services and excess 17 inpatient beds. 18 Fifteen: Within 90 days of 19 licensure applicant shall develop and 20 participate in a Community Advisory 21 Group (CAG) to provide ongoing 22 community input to the hospital's CEO 23 and the hospital's governing board on 24 ways that the hospital can better 25 meet the needs of the residents in

24 21 1 its service area. This would include 2 participating in the development and 3 updating of the Community Health 4 Needs Assessment referred to in 5 Condition 12 above. 6 (a) Applicant shall determine 7 the membership, structure, 8 governance, rules, goals, timeframes, 9 and the role of the CAG in accordance 10 with the primary objectives set forth 11 above and within 60 days from the 12 date of formation of the CAG shall 13 provide a written report to the 14 hospital's governing board setting 15 forth that information with a copy to 16 the Division and subject to the 17 Department's approval. 18 Applicant may petition the 19 Department to disband the CAG not 20 earlier than three years from the 21 date of licensure and on a showing 22 that all of the requirements in this 23 condition have been satisfied for at 24 least one year. 25 Sixteen: For the initial five

25 22 1 years following the transfer of 2 ownership, applicant shall submit 3 annual reports to the Division 4 detailing: 5 (a) The investments it has made 6 during the previous year at the 7 hospital including a detailed annual 8 accounting of any long- or short-term 9 debt or other liabilities incurred on 10 the hospital's behalf and reflected 11 on the balance sheet. 12 (b) The transfer of funds from 13 the hospital to any related entity 14 including detail regarding the amount 15 of funds transferred in order to 16 document that assets and profits 17 reasonably necessary to accomplish 18 the healthcare purposes remain within 19 the hospital. Transfer of funds 20 shall include, but not be limited to, 21 assessment for corporate services, 22 transfers of cash and investment 23 balances to centrally controlled 24 accounts, management fees, capital 25 assessments and/or special one-time

26 23 1 assessments for any purpose. 2 (c) All financial data and 3 measures required pursuant to 4 regulation and from the financial 5 indicators monthly reporting; 6 (d) A list of completed capital 7 projects itemized to reflect the 8 project, its expenditure, and the 9 date it was completed. 10 Seventeen: Within 15 business 11 days of approval of this application, 12 the applicant shall provide a report 13 to the Division detailing its plan 14 for communications to the Hospital 15 staff, the community, including but 16 not limited to elected officials, 17 clinical practitioners, and EMS 18 providers concerning the approval of 19 the transfer of the license and the 20 availability of fully-integrated and 21 comprehensive health services. 22 Eighteen: Within 180 days of the 23 close of its reporting period 24 applicant shall submit audited 25 financial statements for that period

27 24 1 to the Department pursuant to law. 2 Concurrent with the submission 3 thereof to the Department, the 4 applicant shall post on the home page 5 of the Hospital's website direct 6 links to its audited annual financial 7 statements. 8 The next couple conditions are 9 slightly different wording than you 10 may have seen before, and these are 11 coming from a transparency proposal 12 that the Department has proposed in 13 the New Jersey Register for Comment. 14 Nineteen: Within 45 days of the 15 close of each quarter of its 16 reporting period, the applicant shall 17 submit to the Department its 18 cumulative unaudited quarterly 19 financial statements through the 20 court. 21 Within the earlier of either days of the submission thereof to the 23 Department or 60 days of the close of 24 a reporting period quarter, applicant 25 shall post on the home page of the

28 25 1 hospital's website direct links to 2 its cumulative unaudited quarterly 3 financial statements either as a 4 stand-alone document or at the page 5 EMMA or the EDGAR systems. 6 Now, these are financial -- 7 electronic financial reporting 8 systems. I just recently learned 9 about these myself. 10 Twenty: Applicant can elect to 11 post, with or adjacent to the 12 unaudited annual financial statements 13 that it posts an accurate statement 14 that highlights and describes the 15 unaudited nature thereof and any 16 caveat associated therewith. 17 And again, that and the next one 18 here are the ones I talked about that 19 are in the transparency proposal. 20 The applicant can elect to apply 21 to the Department for a waiver of 22 compliance with Condition 19 above that was the first of these ones on the grounds that posting 25 unaudited financial statements would

29 26 1 conflict with applicable filing and 2 disclosure standards, or other 3 applicable law. 4 Twenty-two: All annual and 5 quarterly statements shall be 6 prepared in accordance with Generally 7 Accepted Accounting Principles. 8 Twenty-three: Prior to 9 licensure, applicant shall submit to 10 the Department all outstanding 11 audited annual financial statements 12 that were prepared for MHA prior to 13 the transfer of ownership. 14 Twenty-four: Within 60 days of 15 posting its audited annual financial 16 statements to its website, the 17 governing board shall hold an annual 18 public meeting in the hospital's 19 primary services area pursuant to law 20 and shall make copies of those 21 audited annual financial statements 22 available at the annual public 23 meeting. Shall develop mechanisms 24 for the meeting that address the 25 following --

30 27 1 (a) An explanation, in 2 layperson's terms, of the audited 3 annual financial statement; 4 (b) An opportunity for members 5 of the local community to present 6 their concerns to the hospital's 7 governing board regarding local 8 health care needs and hospital 9 operations. 10 (C): A method for the applicant 11 to publicly respond in layperson's 12 terms to the concerns expressed by 13 community members at the Annual 14 Public Meeting and; 15 Applicant shall develop these 16 methods, a through c above within days of the date of this approval 18 letter and provide them to the 19 Division. 20 And that's assuming that the 21 Board approves and the Commissioner 22 takes the Board approval for 23 recommendation for approval. 24 Twenty-five: After the transfer 25 is implemented:

31 28 1 (a) Hospital shall use its 2 commercially reasonable efforts to 3 negotiate in good faith for 4 in-network HMO and commercial 5 insurance contracts with commercially 6 reasonable rates based on the rates 7 that HMOs and commercial insurance 8 companies pay to similarly situated 9 in-network hospitals in the Northern 10 New Jersey region. 11 (b) Applicant shall convene 12 periodic meetings with the Department 13 and the Department of Banking and 14 Insurance (DOBI) to review and 15 evaluate all issues arising in 16 contract negotiations within the 17 first year of licensure that may 18 result in increases in out-of-network 19 coverages. At a minimum, applicant 20 shall have routine contact with the 21 existing HMO and commercial insurers. 22 If the existing HMO and commercial 23 insurers fail to respond to requests 24 for negotiations, then applicant 25 shall notify the Department and DOBI

32 29 1 to request assistance. 2 (c) And some language in (c) 3 here is a little bit different from 4 those transparency proposals that I 5 mentioned. 6 Within ten days of licensure, 7 applicant shall post in a conspicuous 8 place on the home page of the 9 hospital's website a link to 10 information, of which it maintains 11 the accuracy, identifying the health 12 benefits plans in which the hospital 13 participates. The applicant shall 14 provide in writing the information it 15 posts to any person upon written, 16 electronic, telephonic or in-person 17 request therefor. 18 Upon making or amending an 19 Internet posting that regulation 20 requires, the applicant concurrently 21 shall notify the Department of the 22 occurrence of the posting by 23 transmitting an containing a 24 link to the posting to the following 25 address, and that's

33 30 1 financial.reports@doh.nj.gov. 2 (d) Within the first year of 3 licensure, applicant shall notify the 4 Department of the status of the 5 notices to terminate any HMO or 6 commercial insurance contract that 7 will expand out-of-network coverage. 8 Applicant shall document how it will 9 provide notice to patients and 10 providers as well as the impact that 11 such action is reasonably expected to 12 have on access to healthcare. 13 (E) During the first year from 14 the date of licensing applicant shall 15 report to the Department for each six 16 month period the hospital's payer mix 17 and the number and percent of total 18 hospital admissions that came through 19 the emergency department. For four 20 years thereafter, hospital shall 21 report the aforesaid information to 22 the Department on an annual basis. 23 Twenty-six: In accordance with 24 the provisions of law, the hospital 25 shall offer to its employees who are

34 31 1 affected by the transfer health 2 insurance coverage at substantially 3 equivalent levels, terms and 4 conditions to those that were offered 5 to the employees prior to the 6 transfer. This condition does not 7 prohibit good faith contract 8 negotiations in the future. 9 Twenty-seven: Applicant shall 10 continue compliance with regulations 11 which require that all hospitals 12 provide on a regular and continuing 13 basis outpatient and preventive 14 services including clinical services 15 for medically indigent patients, for 16 those services provided on an 17 inpatient basis. 18 Twenty-eight: Hospital shall 19 maintain compliance with the United 20 States Department of Health and Human 21 Services standards for Culturally and 22 Linguistically Appropriate Services 23 in Health and Healthcare. Compliance 24 shall be documented and filed with 25 the division with the annual

35 32 1 licensing renewal. 2 Twenty-nine: For at least five 3 years the applicant shall not enter 4 into any contract or other service or 5 purchasing arrangements or provide 6 any corporate allocation or 7 equivalent charge to affiliated 8 organizations within applicant's 9 organization except for contracts or 10 arrangements to provide services or 11 products that are reasonably 12 necessary to accomplish the 13 healthcare purposes of the hospital 14 and for compensation that is 15 consistent with fair market value for 16 the services actually rendered, or 17 the products actually provided. 18 Thirty: Applicant shall submit 19 any proposed plan including 20 documented compliance with law and 21 recollections as it relates to 22 out-of-network cost sharing with 23 patients to DOBI prior to the 24 implementation. Applicant shall not 25 implement any out-of-network cost

36 33 1 sharing plans if DOBI objects 2 thereto. 3 Thirty-one: Applicant shall 4 comply with requirements of the 5 Department of Labor's Division of 6 Wage and Hour Compliance that address 7 conditions of employment and the 8 method and manner of payment of 9 wages. 10 And finally, Thirty-two: Prior 11 to licensure applicant shall identify 12 a single point of contact to report 13 to the Division concerning the status 14 of all these conditions and within 15 the time frames noted in the 16 conditions. 17 I know that's a lot of stuff to 18 hear, a lot of stuff to speak. I'll 19 be happy to try to answer any 20 questions the applicant may have MS. McGHEE: That the Board has. 22 MR. CALABRIA: That the Board 23 may have. Sorry. 24 MS. McGHEE: Board members, 25 shall we start with you, Michael?

37 34 1 MR. GROSS: I'm fine. 2 MS. McGHEE: If you think of 3 questions as we go along... 4 MR. GROSS: I will. Thank you. 5 MS. McGHEE: So to my left, Mr. 6 Kane. 7 MR. KANE: No questions. 8 MS. McGHEE: Ms. Brewen-Alvino. 9 MS. BREWEN-ALVINO: No 10 questions. 11 MS. McGHEE: Ms. Gibson. 12 MS. GIBSON: No questions. 13 MS. OLSZEWSKI: It's Susan. I 14 couldn't quite hear Connie. Is 15 somebody getting ready to ask a 16 question? 17 MS. McGHEE: No one has any 18 questions so far. 19 Do you have a question? 20 MS. OLSZEWSKI: Oh, I have 21 several, yes. 22 John, it's Susan. Listen, did 23 you ever receive audited financial 24 reports from Meadowlands for their, 25 like, 2014, '15, 16?

38 35 1 MR. CALABRIA: No, the 2 Department has not received those 3 audited financial statements from the 4 current owner. 5 MS. OLSZEWSKI: Okay. Because I 6 have -- you know, I got the letter 7 that was written by HPAE I think it 8 was about the application not being 9 complete because we never received 10 all the financial information. 11 I am really concerned that with 12 an occupancy level on average of 26, 13 that this hospital is in such a deep 14 hole that it could never dig itself 15 out of it. 16 Did you -- I know you asked many 17 questions and you got not a lot of 18 information back mostly. But has 19 someone really looked, is it viable 20 to operate this medical center 21 anymore? 22 MR. CALABRIA: We have looked excuse me -- as I mentioned up front, 24 we look at the general transfer of 25 ownership criteria. There is a

39 36 1 willing buyer and seller and the 2 buyer, not the seller, is financially 3 feasible and has an acceptable track 4 record. 5 Yes, both the Department staff 6 and the staff of the healthcare 7 facility's finance authority have 8 looked at past financial 9 information -- applicant responded to 10 that financial information -- and 11 based on what was given to us by the 12 buyer, we are confident that this is 13 a financially viable project. 14 MS. OLSZEWSKI: By "financially 15 viable," it means that the buyer has 16 the funds to buy the hospital? 17 MR. CALABRIA: That's correct. 18 MS. OLSZEWSKI: It doesn't mean 19 that the hospital can function, 20 right, is that correct? 21 MR. CALABRIA: Well, you know I 22 guess in a limited term that's 23 correct. But, obviously, as noted in 24 the application, the applicant has 25 described a number of means by which

40 37 1 it intends to increase occupancy and 2 utilization. 3 MS. OLSZEWSKI: Uh-huh. You 4 know, I read those and the thing is 5 when I look at the occupancy levels, 6 it basically -- basically you'd have 7 to like quadruple that to have them 8 be in a range that I would think you 9 could operate a profitable medical 10 center from, so I was a little 11 concerned about that. 12 And their charity care at 13 one percent seems awfully low to me. 14 I'm wondering if the folks that we 15 think of as under-served folks are 16 trying to go to a medical center that 17 in the past has operated basically on 18 a private pay basis -- because 19 they've really not made contracts 20 with -- they're basically 21 out-of-network, which is extremely 22 expensive if or a individual seeking 23 medical care -- that the under-served 24 I'm thinking in that community have 25 probably found other places to go,

41 38 1 and there are certainly a lot of 2 medical centers in the surrounding 3 areas, to get their Medicare. 4 Does that -- I mean, one percent 5 is very low, is it not to you? 6 MR. CALABRIA: But remember all 7 this data is on the current owner, 8 it's not on the buyer, and that's who 9 we're looking at in this application. 10 And you noticed in their 11 application they talked about their 12 negotiations for insurance contracts 13 with more insurers. 14 MR. GROSS: We are going to be 15 hearing from the new owner. 16 MS. OLSZEWSKI: Where I'm 17 heading with this is after reading 18 the application, and I was very 19 concerned that the buyer is not 20 already, does not already own a 21 hospital or medical center, has 22 limited, very limited, new and very 23 limited experience in that area, yet 24 they're able to do it, but I'm very 25 concerned about that.

42 39 1 In the past when we had 2 transferred ownership, it had most 3 often been to surrounding hospitals 4 or a medical center or consortium of 5 medical centers or a corporation even 6 who brings with it the knowledge, 7 expertise, personnel, maybe volume, 8 access to volume purchasing 9 contracts, that they understand and 10 know that they come in running, you 11 know, sort of they understand what 12 it's going to take to pull this 13 medical center out. And even in 14 cases where we've approved purchases 15 to other entities where it seemed 16 like we weren't -- I personally was 17 not convinced that it would succeed. 18 I felt it had a chance, and that 19 because it was somebody who already 20 had experience there, you know, they 21 would give it their, you know, they 22 would give it their best try and if 23 they couldn't succeed, they would 24 find a better alternative so that it 25 maybe bought a few years for the

43 40 1 community and maybe something better 2 would come along. 3 But in this case, I am truly 4 concerned that that's not the case 5 here. That this medical center I 6 liken it to somebody with a terminal 7 illness and you think for a while 8 you're prolonging life and then you 9 realize you're prolonging death and I 10 never thought I would say this, but 11 this is the first instance I've come 12 across where I really think it would 13 better suit the needs of the 14 community to have this medical center 15 not go on, to close, than to have 16 this take place, this sale take 17 place. 18 And I'm saying that because when 19 you've been with somebody who is 20 terminally ill and dying, the impact 21 is not just on the individual but on 22 everyone around the individual who 23 supports him, services and loves and 24 cares for that individual. It's a 25 tremendous impact.

44 41 1 And in that the community has 2 other medical centers nearby, so I 3 just find it very difficult to 4 support this sale. I just did not 5 find any compelling reason in the 6 applicant's, in their initial 7 application or in their follow-up 8 questions that made me feel 9 comfortable that they would be able 10 to carry this off. And we don't even 11 know what they're going to be able to 12 carry off because we haven't seen the 13 financial reports. We don't know 14 what they are starting from other 15 than an occupancy of 26 beds. Not 16 good. 17 MS. AINORA: John, if I may. 18 This is Cathy Ainora. Can you just 19 put on the record how many times has 20 the State Health Planning Board 21 actually transferred ownership of 22 this Meadowlands Hospital. 23 MR. CALABRIA: This might be the 24 second time that I recall off the top 25 of my head.

45 42 1 MS. AINORA: I think it's more 2 than that. 3 MR. CALABRIA: It might be. I 4 don't know. I don't actually recall. 5 It might be the third but I don't 6 think it's more than three. 7 MS. AINORA: So three times 8 we've transferred and three times 9 it's failed. I guess that's kind of 10 Susan's point. 11 MS. OLSZEWSKI: Yes. And 12 transferring it to somebody who's not 13 experienced in the medical field and 14 the turnaround, to me it sets it up 15 for failure again. 16 MR. CALABRIA: I think the staff 17 understands your concerns. I can 18 just note that the applicant will be 19 speaking later on and can address, 20 hopefully address the concerns that 21 you've all expressed. 22 I did attend the public hearing 23 and I know that all of you have read 24 the transcript of the public hearing 25 and there was tremendous community

46 43 1 support for this facility. 2 MS. OLSZEWSKI: Yes. 3 MR. CALABRIA: And, you know, 4 again I can only state that the 5 applicant, the applicant itself is an 6 acceptable applicant. It's a willing 7 buyer, willing seller. The applicant 8 has a financially, has submitted a 9 financially feasible project and the 10 applicant has an acceptable track 11 record. 12 There are no rules, requirements 13 or regulations about experience when 14 we're doing any kind of transfer of 15 ownership of any healthcare facility. 16 And, of course -- but this 17 applicant in terms of quality will 18 have to the meet all of our licensing 19 standards and comply with all of the 20 conditions that we put on this should 21 the Board recommend them. 22 MS. OLSZEWSKI: Joe, what 23 happens if the applicant doesn't 24 comply with a lot of the conditions? 25 Your staff is going to be extremely

47 44 1 busy making sure they are all being 2 met, I guess. What happens if 3 they're not met? 4 MR. CALABRIA: Well, these are 5 going to be licensing conditions and 6 so they'll be subject to licensing 7 requirements and any licensing 8 penalty should it come to that. 9 As I noted, these are very 10 similar conditions that we put on 11 many other transfers and the staff 12 has a lot of experience in making and 13 ensuring there's compliance with 14 them. 15 MS. OLSZEWSKI: Uh-huh. 16 MS. McGHEE: Any other questions 17 from the Board? 18 I have one. It has to do with 19 Condition Number Eighteen and it's 20 following along the line of what 21 Susan and Cathy have brought out. 22 But you asked within 180 days of the 23 close of its reporting period the 24 applicant shall submit audited annual 25 financial statements. So I'm just

48 45 1 wondering what assurances you may 2 have had from the applicant that 3 they'd be able to comply with this 4 condition. 5 MR. CALABRIA: Well, all 6 hospitals have to comply with these 7 audited conditions, so we expect all 8 hospital to do that and this 9 applicant will be expected to do so. 10 If they accept that condition, which 11 I expect them to do, then they will 12 comply with that condition. 13 MS. McGHEE: I understand what 14 you're saying but I'm wondering if 15 they actually gave you any assurance 16 of how they are going to be able to 17 meet that condition, especially in 18 light of, you know, transparency, 19 accountability. The fact that they 20 haven't had prior -- you haven't had 21 prior audited statements from either 22 the applicant or the buyer or the 23 seller. 24 MR. CALABRIA: The buyer is the 25 new, remember.

49 46 1 MS. McGHEE: Right. 2 MR. CALABRIA: So the entity 3 that has not submitted over the last 4 couple of years is the seller. So 5 the buyer has agreed to do this. I 6 mean, I noticed in one of their 7 applications, I can't give you page 8 numbers or anything, and again, they 9 have seen this condition and the 10 Board I'm sure will ask if they 11 accept all the conditions; and so if 12 they accept this condition, then 13 you'll have their word on the record 14 that they will do it. 15 MR. GROSS: Madame Chairman? 16 MS. McGHEE: Yes. 17 MR. GROSS: One question I have 18 is worst-case scenario, if our 19 applicant wasn't capable of 20 fulfilling the requirements of what 21 you recommended here today, what's 22 the worst-case scenario that would 23 happen? 24 MR. CALABRIA: Well, I think it 25 depends on -- that's really a

50 47 1 hypothetical which I'm a little 2 reluctant to discuss here at this 3 time. 4 MR. GROSS: I understand. 5 MR. CALABRIA: There may have to 6 be another transfer, perhaps the 7 hospital will close, maybe another 8 buyer will come along that has a 9 different approach to it. 10 MR. GROSS: Okay. 11 MR. CALABRIA: But it will have 12 to come back to the Board. 13 MS. McGHEE: Thank you. Any 14 other questions from the Board? 15 Hearing none, then we'll move on. 16 Thank you very much. 17 This is the public portion of 18 our meeting and so those of you that 19 want to speak, from what I can see 20 from our list, we have one person 21 that signed up to speak. And if 22 there's anyone else, you need to come 23 and sign now before you lose your 24 time. 25 So that's a Mr. Bernie Girard,

51 48 1 if I said that right. 2 MR. GERARD: Yes. 3 MS. McGHEE: Good morning. 4 Would you state your name and spell 5 it for our record. 6 MR. GERARD: Sure. My name is 7 Bernie Gerard. B-E-R-N-I-E. 8 G-E-R-A-R-D. 9 Good morning. I'm the vice 10 president of the Health Professionals 11 and Allied Employees, the state's 12 largest healthcare union which 13 represents the nursing, technical and 14 service employees at Meadowlands 15 Hospital Medical Center. 16 I'm here today to comment on the 17 Department of Health staff's 18 recommendations. I provided the 19 written comments -- I provided 20 written comments. You have them 21 before you. I would just like to 22 summarize them now. 23 HPAE believes that approval of 24 the application by the State Health 25 Planning Board is appropriate only

52 49 1 under the following conditions, which 2 are largely consistent with the 3 assurances that the buyer NJMHMC has 4 already provided to the Department of 5 Health during the application review 6 process. 7 The first condition is employee 8 retention and union recognition. At 9 various times during the Department's 10 review of the pending application, 11 the buyer has committed to retain 12 substantially all of the current 13 employees at the hospital, uphold 14 existing contracts with professional 15 staff, maintain all existing beds and 16 services that are currently provided, 17 and preserve the buildings and 18 equipment in the hospital. 19 Moreover, the buyer has made a 20 commitment to invest a minimum of 21 3 million dollars in the facility and 22 equipment upgrades to keep the 23 hospital open for a period of years 24 and to maintain existing services. 25 Consistent with these

53 50 1 commitments, HPAE is requesting that 2 the buyer recognize HPAE as the 3 bargaining representative for the 4 bargaining units of nurse, technical 5 and service employees that we 6 currently represent and agree to 7 bargaining with HPAE consistent with 8 its obligations as prospective 9 employer of those HPAE represented 10 employees. 11 The second condition is 12 continuity of benefits. The buyer 13 has committed to offer its employees 14 who are affected by the transfer 15 health insurance coverage at 16 substantially equivalent levels and 17 terms and conditions to those that 18 were offered to employees prior to 19 the transfer. 20 HPAE requests that the State 21 Health Planning Board clarify that 22 this condition applies to benefit 23 levels in effect at the time of the Certificate of Need approval 25 issued by the current owner MHA. The

54 51 1 Department imposed this condition on 2 MHA when it assumed control of the 3 hospital yet MHA failed to maintain 4 the same level of benefits. 5 It is HPAE's position that this 6 condition must be extended to the 7 buyer requiring MHA's successor to 8 provide health insurance benefits at 9 the level that existed upon the 10 Department's approval of MHA's 11 Certificate of Need in 2010 would be 12 consistent with the legislative 13 intent and with departmental policy 14 underlying its earlier approval. 15 Because hospital employees have 16 not received the level of health 17 insurance coverage which the 18 Department of Health intended that 19 they would receive for the seven 20 years that MHA has operated the 21 hospital, HPAE requests that the 22 Department of Health require that the 23 buyer must provide to hospital 24 employees health insurance coverage 25 at substantially equivalent levels,

55 52 1 terms and conditions as those that 2 were offered to employees prior to 3 the Department-approved transfer of 4 the hospital to MHA in MS. McGHEE: Thank you, sir. 6 Your time is up. We appreciate -- 7 MR. GERARD: And my statement is 8 up. I want to thank you for your 9 consideration of these conditions. 10 Are there any questions? 11 MS. McGHEE: Hearing none. 12 Thank you. 13 Are there any more members of 14 the public that wish to speak and 15 have not yet signed in? 16 (No response.) 17 MS. McGHEE: Thank you. No 18 response. We'll go to the 19 applicant's presentation and you'll 20 have ten minutes to present. 21 And, sir, would you state your 22 name and spell it for the record. 23 MR. MOSHE: Yan Moshe. Y-A-N. 24 M-O-S-H-E. 25 Good morning, Members of the

56 53 1 Board. 2 MS. McGHEE: Good morning. 3 MR. MOSHE: I'm the principal 4 owner of NJMHMC, LLC and it is my 5 pleasure to present to you our vision 6 for the transformation of Meadowlands 7 Hospital Medical Center. 8 Here with me this morning to 9 answer any questions you may have are 10 some of the members of the management 11 team for the hospital: Felicia 12 Karsos, CEO, John Grywalski, CFO and 13 Mark Caliguire, general counsel. 14 It's our view that the hospital 15 has been a greatly under utilized 16 asset and that there is much more 17 that can be done to enable it to 18 achieve its full potential for high 19 quality and cost effective healthcare 20 services to residents of Hudson 21 County. 22 Upon approval of the transfer, 23 it's our intention to enact several 24 new measures that will greatly 25 improve the number and types of

57 54 1 services offered at the hospital's 2 patient base and occupant count. 3 While improving both the quality and 4 accessibility of those services, 5 although we have made already various 6 detailed submissions to the 7 Department outlining the measures by 8 which those goals will be achieved, 9 we would like to use our allotted 10 time to summarize some of them for 11 you. 12 My plans include retaining all 13 existing services including all 14 current inpatient, outpatient, 15 emergency, ambulatory and EMS 16 services. 17 Adding new technology. For 18 example, we intend to purchase a new 19 state of the art open MRI for the 20 hospital. We have committed to a 21 minimum of capital infusion of 22 $3 million into the hospital, some of 23 which will be used to invest in new 24 technology, for recruiting additional 25 physicians and multi-specialty

58 55 1 practices, moving away from an 2 out-of-network model for 3 reimbursement and negotiating 4 in-network relationships with 5 commercial payors. 6 In addition, I plan to adopt a 7 different approach for the management 8 of the hospital. I have built 9 several successful businesses in my 10 career including some in the 11 healthcare industry. I found that 12 one of the keys to this success has 13 been to put appropriate leadership in 14 place and give those with the 15 knowledge and expertise and authority 16 to manage the day-to-day operations. 17 I've accomplished this by using 18 a hands-off approach to governance 19 and found that giving the key 20 executives the authority to manage 21 has proven to be a successful way to 22 operate a healthcare business. 23 I plan to use the same approach 24 in Meadowlands. I am retaining the 25 leadership team, some of whom are

59 56 1 here with me this morning, and I have 2 every confidence and am certain they 3 will be successful if given the 4 freedom to operate that day-to-day 5 affairs of the hospital. 6 On that note it is my pleasure 7 to introduce Ms. Felicia Karsos who 8 has over thirty years of experience 9 in the hospital industry and has been 10 the CEO of the hospital since and will continue to occupy that 12 position once the transfer of 13 ownership has been completed. 14 Ms. Karsos will explain to you 15 in greater detail our plans for the 16 hospital. 17 MS. McGHEE: Thank you. 18 MS. KARSOS: Thank you. My name 19 is Felicia Karsos. F-E-L-I-C-I-A. 20 K-A-R-S-O-S. I have over this years of healthcare experience and I 22 have been at Meadowlands for the last 23 seven years. As Yan stated, there is 24 an essential difference in the 25 proposed new governance for

60 57 1 Meadowlands Hospital. The plan that 2 we're putting forward is one key 3 example that the strategies that have 4 been developed were not developed in 5 a silo. Yan recognizes that it takes 6 a team to run a hospital not just one 7 person and so the strategies that 8 you're going to hear have come from 9 the leadership at the hospital, which 10 is a very, very different approach 11 from the current ownership. 12 Yan also understands that 13 physicians are key to the success of 14 the hospital. Again, very different 15 from the current ownership. 16 One of our first goals is to 17 expand physician recruitment at the 18 hospital. Several physicians over 19 the last several years have left. I 20 personally have reached out to 21 several of them over the last two 22 years and the response has always 23 been the same: As long as the 24 current owners are there, I'm not 25 going to set foot back into

61 58 1 Meadowlands Hospital. Now as we've 2 had new discussions with them talking 3 about the proposed changes, the new 4 management style as well as the new 5 ownership, they've all been very 6 positive, expressed that they would 7 be more than willing to come and give 8 us a try. It will then be up to the 9 management team to make the services 10 available to them to make the 11 hospital what it once was for them to 12 come back and practice within the 13 facility. 14 We've also recognized that it's 15 not just enough for those physicians, 16 we're reaching out to other 17 physicians. Yan has run several 18 surgery centers. There are primary 19 care physicians and surgeons that use 20 those centers that are also 21 expressing interest in bringing 22 patients to Meadowlands. 23 We've also looked at former 24 residents as well as residents from 25 other facilities to possibly set up

62 59 1 practice within the facility. 2 We also recognize that 3 physicians aren't enough. We need to 4 have a change in our approach to the 5 commercial payers. Meadowlands under 6 the current ownership has had an 7 out-of-network approach as you all 8 know. We have started to negotiate 9 several contracts including the 10 Horizon contract. We are now 11 starting to see increased 12 reimbursement and an increase in 13 patient volume. So our intent is to 14 continue those negotiations with the 15 other commercial payers and succeed 16 in bringing this transformation to an 17 in-network that model wherever that 18 is possible. We know that physicians 19 can bring patients but they're not 20 going to be willing to come if 21 they're going to have those 22 additional costs related to those 23 out-of-network contracts. 24 We also recognize that we also 25 need to improve and expand certain