Legal action over SUNY scoring could shake up LICH bids in Brooklyn

Successful suit would move Prime Healthcare into second place

May 8, 2014 By Mary Frost Brooklyn Daily Eagle

LICH RFP challenge. Photos by Mary Frost

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Brooklyn community groups and doctors fighting to save embattled Long Island College Hospital (LICH) are headed back to court to ask the judge to throw out some questionable scores submitted by panelists in the state’s RFP (Request for Proposals) bidding process.

If they are successful in their bid, a full-service hospital proposal by the Prime Healthcare Foundation would move into second place, knocking the current second-place finisher into third.

LICH advocates also want the judge to make the State University of New York (SUNY) restore medical services they are required to provide until the May 22 deadline. SUNY has already discontinued a number of services, and plans to stop admitting patients and accepting ambulances starting on May 12.

The bidding rules and deadline were hammered out under the guidance of state Supreme Court Justice Johnny Lee Baynes by attorneys for the LICH coalition, SUNY and the state Department of health after more than a year of hard-fought litigation.

This will be the second legal action against SUNY taking place on Thursday. In a separate suit, the top-ranked bidder for LICH is suing SUNY over its decision to reject its bid for the hospital, located on valuable real estate in Cobble Hill, Brooklyn.

Attorney Jim Walden, of Gibson, Dunn & Crutcher told the Brooklyn Eagle that the coalition filed a motion on Thursday “to disqualify certain scores” turned in by panelists ranking the nine suitors vying for LICH.

According to the legal settlement, panelists on the “Technical Committee” were supposed to rank proposals providing full-service hospitals higher than proposals offering fewer medical services.

Several panelists, however, appeared to thumb their noses at these instructions. Six of the evaluators gave their highest score to non-hospital operators, none of whom offered any of the minimum medical services, such as an ICU.

One evaluator gave every one of the four hospital proposals a score of zero, and gave developer Fortis, a non-hospital bidder failing to meet the minimum healthcare requirements, a perfect score of 70.

Technical Committee members chosen by SUNY gave their top collective scores to three non-hospital proposals.

Throwing out the non-compliant votes would maintain the current first-place hospital bidder — Brooklyn Health Partners (BHP) — in the pole position, but would move the Prime Healthcare Foundation’s $220 million bid into second-place.

The Prime Healthcare Foundation, together with its affiliate Prime Healthcare Services, operates 25 hospitals across six states, and is in the process of acquiring three hospitals in New Jersey. Prime proposes to operate LICH from four core buildings, immediately return services to previous levels and beyond, and improve efficiency. Prime also commits to investing $40 million in infrastructure improvements and capital expenditures.

SUNY rejected BHP’s bid on Monday, and has already started negotiations with developer Peebles Corporation, which came in second under the contested bidding process.

Peebles, offering a “stand-alone” ER and ambulatory services but no hospital, would move down into third place if the disputed scores were thrown out.

BHP – in a different lawsuit altogether — is suing SUNY, claiming that the state did not negotiate in good faith. BHP is scheduled to appear before Justice Baynes on Thursday.

Mr. Walden said the community and LICH doctors stand behind BHP’s right to sue SUNY.

“We fully support BHP’s right to its day in court, and we will critically assess the basis for SUNY’s decision to terminate negotiations and its apparent decision to reject BHP’s request for a temporary-operator-license application,” Walden said.

“At the same time, the Community Groups and Concerned Physicians of LICH filed a motion today seeking to align the RFP scoring with the letter and spirit of our settlement agreement. Some Technical Committee members chose to rank nonhospital proposals over proposals including a full-service hospital, and these decisions are indefensible under the plain terms of the settlement. Those scores should be disqualified,” he said.

He added, “If our motion is granted, Prime Healthcare, with its plan for a full-service hospital, would be the second-highest scoring proposal.”

Walden said rescoring the proposals won’t hurt BHP’s chances in court, because BHP comes out on top no matter how the proposals are scored. “Our application does no violence to BHP’s legal claims, as even the revised scoring places BHP first,” he said.

The LICH community and doctors would also be starting their own negotiations with Peebles, Walden said — even as their case made its way through court.

“Since SUNY and elected officials may be negotiating with Peebles while our motion is being considered by Justice Johnny Lee Baynes, we will participate in that process in good faith and meet with Peebles representatives as well to explain the critical need for a full-serve hospital in this community. Lives depend on it,” he said.

SUNY shutting LICH early?

The settlement agreed to by all parties requires SUNY to “maintain the current level of medical services at LICH” until May 22.

Medical services, including colonoscopies, specialty services and inpatient services, have already been discontinued, doctors said in affirmations in support of this latest legal action. Because SUNY has fired so many staff members, SUNY has “effectively closed the pediatric area,” a doctor wrote.

On April 14, the hospital tried to turn away an expectant mother who arrived at the LICH emergency room. Nurses had to intervene, a doctor wrote, and the woman gave birth there. In other cases, specialists have “routinely been prohibited from assisting doctors at LICH.”

According to the petitioners, SUNY plans to transfer 182 particularly vulnerable patients to other dialysis services that do not have daytime slots available for them. Many of them, including the frail elderly in wheelchairs, would be forced into distant clinics in the middle of the night.

The state Department of Health (DOH) has refused to release details of LICH’s closure plan, details of which violate the settlement, Walden said.

The settlement also requires that SUNY provide documents from the state Attorney General related to the Othmer endowment funds. Brooklyn Heights residents Dr. Donald and Mildred Othmer, who made a fortune by investing in Berkshire Hathaway stock, bequeathed roughly $140 million to LICH upon their deaths in 1995 and 1998 to be held “in perpetuity” with the income used for LICH.

In 2000, 2006 and 2011, the Attorney General’s Office Charities Bureau allowed LICH to drain the Othmer endowment. By law, this money must be replenished. The AG has not provided the stipulated documents.

The community groups involved in this lawsuit include the Boerum Hill Association, Brooklyn Heights Association, Carroll Gardens Neighborhood Association, Cobble Hill Association, Riverside Tenants Association, and Wyckoff Gardens Association. They are joined by the Concerned Physicians of LICH.