Criticism Grows Over Saint Michael’s Medical Center Sale

By Briana Vannozzi

As a final sale grows closer, there’s mounting criticism over the proposed buyer of Saint Michael’s Medical Center in Newark. Prime Healthcare Services, a California based for-profit company is coming under fire for its business practices at the other hospitals it owns around the country, including one recently acquired in Passaic.

“We believe Prime, their main motivation is profit,” said Campaign to Protect Community Healthcare Spokesperson India Hayes Larrier.

Larrier is part of a coalition of groups urging the state to reject the sale. Prime Healthcare, they say, has a history of taking over financially-strapped hospitals and instituting policies that boost profits by doing what’s called upcoding, also known as overbilling.

“Right now there are pending lawsuits and a pending federal investigation into their Medicare coding that’s pending. No one has been convicted of anything,” she said.

According to the groups, the current contract doesn’t guard against layoffs, require the company to keep Saint Michael’s open longer than five years or keep current in-network health plans. Larrier pointed to numerous articles written by news outlets from around the country blasting prime’s leadership. She says quote the proof is in the recent takeover of Saint Mary’s Hospital in Passaic.

“Even before the deal was signed, sealed and delivered by the court, there were layoffs at Saint Mary’s,” she said.

According to a representative for Prime Healthcare, the company currently owns 29 hospitals in nine states around the country. It’s in the process of acquiring 14 more.

The state Health Department tells us the contract is still under review. A spokesperson said they’ve asked Prime for additional information, but wouldn’t provide details as to what. And they added there’s no set timeline for submitting.

A statement from Prime Healthcare’s spokesperson says, “Unfortunately, if those opposing the acquisition get their way, Saint Michael’s will likely close or be a shell of itself. Certainly hundreds of well-paying jobs will vanish and Newark residents will once again be shortchanged.”

Barrera went on to say that Prime “has never closed a service line or department, and has no intention of doing that at Saint Michael’s. In fact, Prime Healthcare is committed to keeping the hospital open, including the emergency department and all other service lines, for 10 years or longer. We will retain substantially all employees and commit to maintaining staffing levels necessary to ensure safe patient care.”

“None of those things are included in the agreement as it stands right now and that’s what we’re asking. We’re asking for a new agreement,” Larrier said.

When pressed, Prime’s spokesperson conceded that several of those stipulations are in fact pledges by the company, but are not in writing. Larrier says her groups won’t stop until these regulations are put in ink.