Cobble Hill

LICH ER stays open as deal with Peebles a ‘whisper away’

Final agreement expected Thursday in Brooklyn court

May 22, 2014 By Mary Frost Brooklyn Daily Eagle
Long Island College Hospital. Photo by Mary Frost
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Attorneys from community groups, SUNY and developer Peebles Corp., the frontrunner to buy Long Island College Hospital (LICH), asked state Supreme Court Justice Johnny Lee Baynes on Wednesday for one more day to resolve a snag in a deal that would keep an free-standing emergency department open on the Cobble Hill site, along with primary and urgent care.

Developer Peebles plans a mixed use development on the LICH campus, and has partnered with Maimonides Medical Center, North Shore-LIJ, and ProHEALTH to deliver health-related services.

Armies of lawyers and LICH advocates have been packing the almost-daily hearings, which will continue on Thursday morning in Downtown Brooklyn.

Attorney Jim Walden (Gibson, Dunn & Crutcher), who represents community groups, doctors and the NYC Public Advocate, said the parties were a “whisper away” from a deal, which was expected to be announced Thursday.


UPDATE: Peebles is out! SUNY turns to next developer


SUNY volunteered to keep the ER and its related services open for walk-ins for a few days beyond the May 22 deadline as long as the deal was being solidified.

Most LICH staffers, however, are set to lose their jobs at midnight.

The undisputed aspects of the arrangement – which would need to be approved by Justice Baynes and state agencies — were described in court by Peebles attorney Meredith Kane (Paul, Weiss) late Wednesday.

A “transitional” emergency room would continue to be operated by SUNY until the end of June, with North Shore-LIJ providing staffing assistance. On July 1, North Shore would provide ER staffing and management while still operating under SUNY’s license. North Shore would “proceed expeditiously to receive our own license by September 1,” she said. “By that point the ER would be entirely owned and operated by North Shore.”

In this scenario, ambulance service would resume on July 15.

Attorney Walden told Justice Baynes that the ER would remain in place “from now until the end of the deed restriction,” a period of 20 years.

The hitch involved the second aspect of the deal. To counter “the constant refrain that we don’t need a hospital in this part of Brooklyn,” Walden said a “meaningful health care assessment” would be carried out by a neutral party. If the assessment shows a hospital is needed, as SUNY and the state Department of Health argued in 2011, the community would participate in discussions of financing and other issues with Peebles, which would not be solely responsible for its cost.

If, on the other hand, the study determines an acute care hospital is not necessary, “the community will abide by it,” Walden said.

Peebles’ attorney Allen Arffa (Paul-Weiss) said that the health care partners and lawyers had not yet signed on to this part of the deal, but he expected to clear it with them Wednesday evening.

If the deal with Peebles falls through, SUNY would have the option of moving on to Fortis Development Group, next in line after Peebles as ranked in SUNY’s disputed RFP process. Justice Baynes emphasized on Wednesday that the RFP process allows SUNY to continue negotiations, even as all parties explore the possibility of a settlement.

Legal isssues still pending

Unresolved litigation litters the playing field. Fortis claimed that there are legal issues with Peebles’ bid, and plans to protest their rank of third. On Wednesday, Fortis’ attorneys agreed to put off their legal motion as they follow a built-in appeals process.

“We’re confident that a legitimate protest process will end up with Fortis/NYU winning because we believe there are many problems with the Peebles bid –- including non-disclosure of significant law suits and investigation –- and we strongly believe that the Fortis/NYU proposal is far superior to the Peebles bid, especially in terms of the medical services for the community,” said attorney Will Phillips (Covington & Burling).

Peebles’ attorney Allan Arffa (Paul, Weiss) protested what he called “smears at my client.” A lawsuit in Florida was a complicated bankruptcy case, he said, and “totally irrelevant” to LICH. He added that he would “not respond in kind” to Fortis’ claim.

“Our motion became moot because SUNY agreed to everything we asked for and the Judge directed them to provide Peebles’ vendor responsibility questionnaire,” Fortis’ Phillips said after the hearing. “We wanted assurance that our protest would be meaningfully considered and determined prior to any contract being approved, which SUNY confirmed in the papers it filed yesterday.”

RFP rankings still questioned

On another legal front, pending the outcome of negotiations with Peebles, the community groups and doctors have delayed filing a motion to eliminate six scores in SUNY’s RFP voting process that appear to fall outside of settlement guidelines. That motion, if successful, would upend Peebles’ rank, moving Prime Healthcare Foundation, a hospital group, to the top.

“Are you ready for oral arguments if everything falls apart?” Justice Baynes asked Walden. “I truly hope not, but I’m being realistic.” Walden said he would be ready.

Prime’s attorney Andrew Zwerling (Garfunkel Wild) said Prime was “ready, willing and able to provide a full-service acute care hospital.”  Despite their original fourth-place status, the hospital group has already begun the process of filing for a 2806 operating license. Prime has linked their application to intervene with Mr. Walden’s; if a deal is cut with Peebles and Mr. Walden withdraws his application, Prime will do so as well.

Dr. Jon Berall is also contesting the apparently non-compliant RFP scores. “The RFP has so many irregularities it must be examined. Everybody in this room knows about evaluator number nine. The SUNY technical results run in the same pattern as number nine,” Berall said.

The settlement calls for ranking hospital proposals higher than non-hospital proposals. Evaluator number nine, however, gave a score of “0” to all four hospital bids, and the highest possible amount of points to developer Fortis.

Dr. Berall told the court that it didn’t make sense to close “a 250-bed full-service hospital in Downtown Brooklyn with its exploding population, both residential and visitors. Emergency departments across Brooklyn are already overwhelmed, he said. “New York Methodist has ambulances lined up in their emergency room bay. At Maimonides they’re delivering babies in the hallways. ERs are in shambles. To remove a maajor player at this time is cruel and unusual punishment for the 460,000 individuals served by LICH.”

He added that once medical care was halted at LICH, “restarting is many times more difficult. “

Frank Carone (Abrams, Fensterman, Fensterman), representing SUNY, said that Dr. Berall supplied “no affidavits to support the facts he argued.

“When we structured the elements, the language we used was artful,” he said. As an example, Carone cited wording on the RFP to the effect that proposals offering a hospital “will be eligible for a higher technical score,” though not necessarily entitled to one. “Evaluators used common sense,” he argued.

Attorney Walden countered that Dr. Berall’s application was “wholly consistant” with the community groups’ arguments, and requested a joint hearing with Berall, should it come to that.

The first-place bidder in SUNY’s RFP process, Brooklyn Health Partners, was eliminated from consideration by SUNY earlier this month, and by Justice Baynes on May 13. Moses Reser, affiliated with BHP’s Brooklyn investor Harry Miller, told the Brooklyn Eagle that BHP’s attorneys had filed a motion on Tuesday to reconsider that decision, and that an appeal was pending. On Wednesday, BHP withdrew their motion for injunctive relief.

Attorneys from all sides praised the judge’s fairness, dignity and patience through more than a year of some  of the most vexing litigation seen in Brooklyn in recent memory. An unusual atmosphere of decorum prevailes in the courtroom, punctuated by moments of camaraderie among legal adversaries.

Walden noted that all parties had compromised and acted collaboratively, “putting more on the table” than previously.

After court was dismissed for the day, some spectators seemed confused by what exactly was happening.

“We are further away now than ever for continuing acute care services in the hospital known as Long Island College Hospital,” said Dr. Al Giwa.

“I’m a little disappointed in the outcome,” said laid-off patient care associate Sheila Brown. “At one time we thought we scored something much better.”

Susan Raboy, spokesperson for Patients for LICH, said, “It’s easy for the lawyers to spend their time talking about legal issues when it’s really about the patients whose lives are at risk and the trained staff which takes care of them. They forgot the main issue: patients and staff.”

Nurse Julie Semente said a stand-alone ER, if that was the outcome, would’t solve the problem of traveling through traffic to life-saving emergency care. “When they say ER, it’s a public deception,” she said. “They don’t have the services to back up a life-threatening emergency. If your appendix is bursting you have to go directly into an operating room. Minutes matter. “

She added that the New York State Nurses Association (NYSNA) had been saying from the very beginning that a community needs assessment was essential. “The entire hospital may have to shut down before the community gets that.”

The deal would leave the community ahead of where it was a year ago, achieving continuity of emergency services and restoration of the ambulances no later than mid-July, Walden said. “Every day we see more progress towards a solution that will address the short and long-term needs of the community.

The case will resume at state Supreme Court at 10 a.m. Thursday.


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