Top LICH bidders discuss joint purchase of hospital
Justice Baynes moves to cut through the clutter of litigation
State Supreme Court Justice Johnny Lee Baynes astounded a courtroom filled with lawyers, litigants and residents on Thursday when he asked attorneys for three competing bidders for Brooklyn’s Long Island College Hospital (LICH) to gather behind closed doors to try to work out a joint plan to keep the embattled hospital in operation.
The unusual settlement negotiations could break through a logjam of burgeoning litigation threatening to tie up SUNY’s sale of the hospital for months or even years.
Community groups and doctors had entered the courtroom prepared to ask the judge to throw out questionable proposal rankings in the state’s RFP process for LICH, but put off that arguement until May 20. Fortis Property Group was set to present arguments against the community groups’ claims.
Other litigation is pending as well. Brooklyn Healthcare Partners, the first place bidder eliminated in a court decision earlier this week, has filed an appeal.
The community groups asked to suspend their RFP rankings case for several days, attorney Jim Walden of Gibson, Dunn & Crutcher said, at the request of an unnamed entity assumed to be affiliated with the city’s administration.
Peebles Corp., Fortis and Prime Healthcare Foundation all bring something to the table, but “no one entity is going to be able to get the real estate unencumbered,” Justice Baynes said. If a deal is worked out, each operator would handle what they did best. “There’s enough for everybody,” he said.
Developers Peebles and Fortis have both teamed up with respected area hospitals (Peebles with Maimonides Medical Center and North Shore-LIJ, and Fortis with NYU-Langone and Lutheran HealthCare) which have the ability to provide immediate ambulatory care services, but not a hospital. Prime is seeking to operate LICH as a full-service hospital. All three impressed Justice Baynes with their ability to provide a piece of the puzzle, he said.
Peebles and Fortis’s medical affiliates have the ability to extend their operating licenses to LICH, while Prime, based in California, would need to apply for a New York state license.
After almost 15 months of protests and litigation by community groups, officials, unions, patients and bidders in a disputed RFP process, LICH is a hospital teetering on the edge. SUNY, which will be locking LICH’s doors on May 22, has already laid off hundreds of staffers.
On Thursday morning the hospital was placed on ambulance diversion, and SUNY began halting admissions and shutting down departments and services.
The goal remains to find the outfit “who can come in on May 23 and start operations,” Justice Baynes said. “I don’t think SUNY has a problem with that. The driving force is SUNY wants to sell LICH.
“Three entities get together before five today and come up with something that provides for continuation of health care so the place will not close. That’s where this should be going,” he said. “One entity is strong in one point, and one is strong in another. There are three major healthcare players who have proven their skills to do the job. That’s the logical conclusion.
“I have no predispositions,” Baynes added. “My goal above everything is to be fair in fostering a climate to get this thing done in the best interest of everyone.”
Lawyers for the three bidders agreed to begin the talks immediately, on condition that the discussions remain private in light of pending litigation and SUNY’s ongoing discussion with Peebles, the next bidder in line. Attorneys for community groups and doctors, 1199 SEIU healthcare workers union and the New York State Nurses Association (NYSNA) also agreed to join the discussion.
The judge said his decision would not usurp SUNY’s negotiations with Peebles.
Attorney Walden, representing the community and LICH doctors, told the judge, “Here we have three collective entities with the financial wherewithal and expertise to run a hospital and make a hell of a lot of money on the real estate. We’re ready, able and willing to sit down with all the folks together today.”
Justice Baynes also urged the state Department of Health, which has been accused of throwing up unnecessary obstacles to obtaining an operating license, to collaborate with the resulting entity so that LICH could remain open throughout the process.
DOH attorney Nicole Gueron refuted the claim, saying that no party had yet to apply for a license. But Justice Baynes did not appear to be entirely convinced, given statements from bidders and the fact that DOH had still not supplied him with LICH’s closing plan a week after he had requested it. “I am prepared to resolve that issue,” he said.
While Justice Baynes said he would reserve his decision on reversing the ambulance diversion already in effect, he ordered SUNY to maintain health care services at LICH until May 22. SUNY attorney Edward Spiro fought this, saying that admitting patients would be detrimental to their health if the hospital closed as planned on that date.
The judge, however, told SUNY to simply screen the patients before admitting them. “If you have reason to believe it would be dangerous to a patient, do not admit them.”
LICH case never fails to surprise
Justice Baynes praised the lawyers for the community and for SUNY, who have been fighting the case alongside him through a number of unusual ups and downs.
“Mr. Walden, Mr. Carone, you managed to get the job done. I’m not concerned. You know where I stand and what I bargained for. I want the benefit of my bargain as well,” he said.
Supporters of LICH appeared to be dazed – a familiar condition for those following the case.
“If all parties meet in good faith, so there is continuity of care on May 23, that is a victory,” said Susan Raboy, spokesperson for Patients for LICH. “I’m shocked, elated. I did not expect any of this.”
“When all is said and done, this case is going to be in all the law journals,” said Dr. Daniel Berman, an ICU doctor at LICH. “This was a good day, beyond my wildest dreams. The time for a miracle was here, and I believe we have seen the parting of the Red Sea with a possible path to the Promised Land.”
Troy Schell, general counsel for Prime Health care Foundation, told the Brooklyn Eagle, “Our goal is to operate the hospital as an acute care facility. We welcome involvement in the group deal.” He said that Prime, which operates 25 hospitals, could have LICH up and running on May 23. “In California we purchased a hospital through bankruptcy and had it open in seven days with no reduction in services and no ambulance diversion. We saved a community asset.”
“We’re ready to roll. I have a cashier’s check for $22 million in my briefcase,” he said, adding that the rest of the $220 million bid “will not be a problem.”
Schell said Prime looked forward to working with the unions. “Prime can’t save LICH without the support of 1199 and NYSNA,” he said.
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