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Jersey City Medical Center-What You Don’t Know Can Kill You

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Posted by Steven Glazer, Urban Times News on July 16, 2003 at 10:32:01:

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Jersey City Medical Center Documents

The board of the Medical Center includes Zulima Farber, State Senator Bernard Kenny and Jersey City Councilman Mariano Vega.

Steven Glazer, Email: sglazer@urbantimesnews.com
Urban Times News

Jersey City—Through a long history beginning with Frank Hague, the WPA, the Great Depression and FDR, the Jersey City Medical Center has gone from being the jewel in the crown to the bottom of the barrel of medical practice. It is hazardous to the health of patients since it has fallen in to the hands of a third party provider of management services for healthcare facilities, Liberty Healthcare Services and its bewildering array of 20 plus subsidiaries.

Under Liberty, the JCMC has engaged in Medicare Fraud, Insurance Fraud, Securities Fraud, Income Tax Fraud, and has contractually defrauded the City of Jersey City, for whom it acts as turnkey operator of the city-owned facility. Although constantly clamoring for additional funding, Liberty, through its offshore holding, a captive insurance company in Bermuda, has accumulated more than $150 Million in cash. That is far more than could reasonably be needed in reserves for a self-insured risk management plan.

A number of patients have lost their lives needlessly due to financial mismanagement, through improper staffing and lack of critical equipment and supplies and the causes of their deaths have been deliberately concealed. Recently the hospital was out of stock of syringes, unable to administer injections of medications.

These practices continue with the full knowledge and, in some cases, the active assistance of management and other interested outside parties such as board members, and elected officials in North New Jersey, including Congressman Robert Menendez, D-13th.

A good example is the case of Vernon Lee. Lee was a driver for Liberty’s CEO, Jonathan Metsch. Lee was a well-known and popular local figure in Jersey City. Vernon Lee died after a simple operation that proved to be the wrong procedure for his condition. He simply underwent the wrong operation. He died as a result and Liberty lied about the true cause of Lee’s death.

Liberty has consistently shown a flagrant disregard for the purpose for which the JCMC was established by Mayor Frank Hague: “To provide medical care to the residents of Jersey City without regard to the ability to pay.” There is another keycovenant with the people of Jersey City. That covenant is two-fold requiring that the hospital be run as a nonprofit organization “in perpetuity.” The covenant also requires that Jersey City residents be given first consideration in any opportunity for employment. Liberty employs few if any Jersey City residents except in lower-level capacity and Liberty also allowed its tax exempt status to lapse for five years after diligently filing the necessary paperwork year after year for 14 years prior to the lapse. During the time of the lapse, when it was not duly recognized as a nonprofit organization, the hospital issued $200 Million in municipal bonds for the construction of a new hospital building. The loan was facilitated by the state’s Healthcare Finance Agency and the loan was also guaranteed by the Federal Housing and Finance Agency. The loan guarantee was arranged with much fanfare by Congressman Robert Menendez, D-13.

Liberty operates to maximize financial benefit to itself, its shareholders and key outsiders with relationships to the company such as numerous consultants, political office holders both elected and appointed, and members of the medical and managerial staff of the JCMC.

Funds are directed to purposes that have nothing to do with medical care, leaving insufficient funds available for medical care. A young woman, about 18 years old, died when she was given the wrong medication while in a comma. The attending physician misread the chart on her bed and prescribed the wrong medication. He misread the chart because it was handwritten and illegible to him. The hospital had run out of computer labels to print the chart legibly. The hospital is constantly running out of supplies and cash because cash is diverted to the payment of consultants, exorbitant salaries of top-heavy management, over billing by “Faculty Practices,” and bogus self-insured insurance premiums, amongst other things.

The insurance premium is $20 Million annually. Meanwhile, Liberty faithfully sends the premium to its own captive offshore insurance company Mutual Indemnity of Hamilton Bermuda where roughly $150 Million in cash has accumulated in the years since the subsidiary was established. It is not clear why a tax exempt organization would require a tax shelter in the first place. However financial consultants have said that the amount of reserves at $150 Million far exceeds what might be required for an in-house risk managment plan of self insurance. Yet the cash piles up offshore leaving little for medical supplies and equipment and medical staff. Representatives of the Medical Center generally have been unwilling to communicate with this publication and have made it clear that they are "not available," whenever explanations of this type are needed. Management of the Medical Center has made it abundantly clear that they do not wish to speak with the press, unless they are reasonably sure the resulting article will be upbeat.

Jonathan Metsch, the CEO of the ostensibly cash strangled institution gives himself a $100,000 raise each year. Metsch is currently at $850,000 a year, while crying poverty.

Cash flow problems are exacerbated by poor credit. Vendors are unwilling to supply the hospital except on COD terms.There are currently about $40 Million in delinquent payables. Consequently, suppliers ship urgently needed supplies overnight with the hospital paying express charges, and the suppliers charge top prices because of the poor credit and payment history. For example, an accident victim may have dire need to have an airway opened to be able to breath. This is best done with a tracheotomy tube, a plastic tube that opens a hole in the throat directly into the windpipe of the victim. The plastic gadget that does this is just a couple of dollars, yet are frequently out of stock. Accident victims have died for this reason. Ironically, JCMC is the designated trauma center for Hudson County.

The shortage of cash also results in staffing levels that are dangerously low, but also in violation of the law, requiring certain staff-to-patient ratios, particularly in the Emergency Room, and Intensive Care and Critical Care areas. Lack of qualified staff on duty aves management money but can cost patients their lives.

  1. An accident victim had to wait overnight for critical care with a severe trauma to the head. The surgeon refused to come to hospital during the night and would not be on duty until the next morning. The patient waited but by the time the surgeon arrived the patient was brain dead. Had the patient received proper medical attention at the time of a life could have been saved.

  2. State law requires the presences of an attending pediatrician at premature births in the event of fetal distress, a not-uncommon circumstance. A premature birth was recently attended by a 29-year-old pediatric resident with less than 30 days “on the job.” The resident’s inexperience resulted in the death of the newborn. The medical staff lied about the cause of death and told the mother that the baby was born dead.

  3. There are not less than 7 cases of wrongful deaths that have been covered up by outright lies with the encouragement and tacit approval of top management.
Despite the claimed shortage of cash for medical staff, medical supplies and equipment and the consistent refusal to pay vendors and other creditors, management has engaged in a pattern of operation to maximize revenues. These revenue enhancements are fraudulent.

Members of the Medical Staff maintain “faculty practices.” These are flatly prohibited by law as the “corporate practice of medicine.” Liberty and its board of trustees, including counsel Zulima Farber, were cautioned against the “corporate practice of medicine,” more than three years ago by its then Chief Operating Officer (see memo attached).

Yet Liberty today has 11 subsidiary corporations that supply specialized areas of medical practice to patients at the hospital. Medical Staff members supply medical treatment in their area of specialty, pediatrics, for example. The pediatrician receives a salary from the JCMC, through Liberty. Liberty, through its pediatric subsidiary, Liberty Pediatric Associates, bills the patient for the treatment, sometimes without the knowledge of the doctor, sometimes with the connivance of the doctor.

Dr. Calvin Strand, for example, is the head of Pathology. Dr. Strand draws a generous salary from the JCMC as department head. He is also the owner of Cal Labs at 575 Newark Avenue. Routine tests are performed by Cal Labs on samples of blood, urine, saliva, etc. taken from patients at JCMC. Cal Labs then bills JCMC, JCMC pays Cal Labs, siphoning off funds that could be used for other purposes.Alternately, Cal Labs may be reimbursed by insurance.

Every member of the board of trustees has some financial arrangement with the hospital. Scott Harwood is a trustee. Until recently Harwood enjoyed the franchise, and operated the parking concession. Every member has some arrangement and some incentive to support the management. Zulima Farber is a trustee and is also counsel, for which her firm is paid $30,000 a month.

Scott Ring is publisher of the Jersey Journal.The JCMC and Liberty advertise in the Jersey Journal. The Jersey Journal, in the last 12 months has written nothing about the hospital that was not extremely positive. The Medical Center employs former Jersey Journal reporter Sally Deering as head of media relations. Though these rumors float around the hospital with great frequency, almost constantly, there is never a mention of the hospital except for PR puff pieces appearing from time to time.

This apparently fraudulent insurance billing practice came to the attention of one doctor when insurance claims mailed to insurance companies and some checks for reimbursement were delivered by mail to the doctor. A reimbursement check was made to the order of the doctor by an insurance company for a procedure he never performed and a claim he never submitted.

The doctor learned of this by accident when the check was erroneously made to his order and mailed to him at the hospital. In conversation with other members of the medical staff he learned that he was not the only one to have received such returned billing forms, claim forms and checks. One reimbursed procedure was performed at a time the doctor was on vacation in England with his wife.

The doctor carefully documented all of this and detailed the incidents minutely in a letter to the board of the hospital in January, including the hospital’s counsel, Zulima Farber.The doctor claims that he was subjected to harassment by management for advising the board and criticizing management in an open forum. One of the chief complaints of medical staff is that any criticism is met with browbeating and harassment however well intentioned and constructive it may be.

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