Assemblywoman Joan Quigley (D-32nd Dist.) didn’t mean to step into a hornet’s nest at Meadowview Hospital in Secaucus and Pollack Hospital in Jersey City recently. But when people from the Local 1199HJ national union of hospital and health care employees representing 500 workers in the two facilities started telling her that their paychecks bounced and that payments to their retirement and workmen’s compensation had not been made, she decided to look at little closer at the situation.
Both hospitals are run by a private health care contractor called Progressive Healthcare of Hudson County, a group that took over operations of skilled nursing long term care facilities at Pollack Hospital in Jersey City and Meadowview hospital in Secaucus in 1995 during a massive downsizing of employment by the county. The firm was expected to purchase the buildings within the next two years.
“I worked in Meadowview Hospital in the 1970s,” Quigley said last week, during a telephone interview. “I investigated problems back then, and over the years, helped improve conditions there. I know that [County Executive] Robert Janiszewski continued that progress.”
But Quigley’s personal investigation began to uncover other problems, and so on June 21, she wrote to the state Attorney General asking for a state investigation.
“During the last several months questions concerning patient care have been raised by employees at the facilities,” she said. “On more than one occasion, employees have not been paid on schedule and complaints of non-payment of healthcare and pension benefits have been reported.”
Quigley also said in her letter that Progressive:
• does not carry liability insurance,
• owes vendors several millions of dollars,
• owes Jersey City more than $1 million in water and sewerage bills,
• owes Hudson County millions in over due lease payments.
“Moreover, I believe Progressive Healthcare of Hudson County and/or the companion company owned by one of the Progressive partners that leased employees to Progressive has failed to pay the required 941 payroll taxes and failed to make appropriate payments to the state of New Jersey Employee Workmen’s Unemployment Compensation Fund,” Quigley wrote.
Progressive, meanwhile, has filed for Chapter 11 bankruptcy – claiming it has $5.9 million in debts it cannot pay. Chapter 11 would protect it from creditors, but would allow it to continue operations. Repeated calls to Fox Rothschild O’Brien and Frankel of Philadelphia, Progressive’s attorney, have not been answered.
Freeholders looking into the matter as well
Meanwhile, the Hudson County Freeholders have called for an investigation of their own. Freeholder William O’Dea said he believes Progressive owes much more than it is declaring.
Progressive was supposed to purchase buildings from the Hudson County Improvement Authority in the late 1990s. In 1995, the HCIA had purchased property from the county for $20 million in an attempt to help the county balance its budget. Then the HCIA entered into an agreement with Progressive that would eventually have Progressive purchase two hospitals.
Progressive, which was supposed to make a $4.9 million payment in 1999 and an additional $10 million in 2003, restructured its debt last year, promising to make a payment of $13 million. When this payment was not made to the HCIA for the purchase of the buildings, the HCIA sued for the original $4.9 million – a case still in litigation. During a telephone interview, O’Dea said he has issued a letter to the Board of Freeholders asking for an independent investigation of Progressive. He said he there might be additional debt not reported in the bankruptcy statement.
“I’ve uncovered a few things,” he said. “I would like the county to look into possible contracts with other autonomous county agencies.”
Quigley and O’Dea both said they are concerned about the care the elderly at the two hospitals may be getting as a result of Progressive’s economic problems. Freeholder Nina Davila-Colon has asked the state department of Health and Senior Services to look into the situation.
The Gloucester County Times, based in Woodbury, N.J., has been reporting on troubles in facilities run by an affiliate of Progressive. In Gloucester County, Progressive’s affiliate is called Professional Services. Officials in Gloucester have asked for an investigation by the Attorney General’s office.
Bankruptcy may affect HCIA lawsuit
Joe Lauro, spokesperson for the HCIA, said while Progressive’s bankruptcy came at about the same time as the HCIA’s suit, the county’s move might not have been the cause.
“They have a very long list of creditors,” Lauro said. “From what we’ve learned, they are still managing the whole program there.”
Lauro said Progressive has not made payments in “quite a while,” prompting the county’s action.
“We became aware of Quigley’s letter, but it was not done in concert with anything we were doing,” he said. “Before we filed at the end of June, we also asked the state Department of Health and the Attorney General to join us in our suit. They declined. They seemed to feel the issues were fiscal rather than over how the facility was being managed. In their view, the facility was operating up to their standards.”
Lauro said the county is concerned over both the fiscal management and the health care management, since one can have an effect on the other.
The bankruptcy also puts the HCIA in a somewhat precarious position, since the county now becomes one of many creditors.
“The bankruptcy court is going to decided what kind of payments are going to be made and how each creditor gets ranked,” he said.
If the county is placed too low on the list, there may not be enough assets left for the county to collect. “We have to wait and see,” he said.