East Orange, N.J.-based CareWell Health Medical Center is pushing back against the state's depiction of its financial situation as the state health department seeks a disaster plan, NJ.com reported May 8.
The New Jersey Department of Health sent a letter May 6 to the hospital's CEO asking for Carewell to submit a disaster plan within 24 hours. The department said due to the hospital's financial distress, it "may experience a disruption in services or be forced to close abruptly." The plan is to ensure the health of its patients in such an event.
The department said it has been monitoring CareWell's financial health and determined the hospital was in financial distress; the agency appointed a monitor on March 11. The department has since determined that the hospital is "in serious financial distress and at risk of further financial deterioration."
Specifically, the department found that CareWell has consistently maintained low days of cash on hand, maintained negative operating margins and a high number of days in accounts receivable and accounts payable. It said the hospital also requested an advance on its charity care subsidy payments for two fiscal years in a row, citing emergency cash flow and other financial issues.
"Additionally, the hospital has not made any payments for the entire fiscal year for the assessments it owes to the department," the letter said. "After repeated warnings, the department recently took action to offset the unpaid revenue with reductions in the hospital's Medicaid payments."
In a statement to NJ.com, CareWell accused the department of spreading inaccuracies regarding the hospital's finances. The hospital said the "context, reason and content of the letter … amongst other assertions in the last few months are not factual." CareWell also said it has demonstrated time and again to the health department that it is providing the highest-quality care and patient experience.
"CareWell Health brought the inaccuracies to the department’s attention, the department arrived yesterday in person, validated that they were incorrect, yet the request has not been rescinded," the statement said. "The inaccurate statements about CareWell Health over the past few months are coming at the expense of a vulnerable and underserved community and creating an impression about their local community hospital which simply is not true."
A health department spokesperson told NJ.com the state does not plan to rescind or amend the letter ordering a disaster plan, adding that every hospital in the state is required to maintain a plan in case of a pandemic, severe weather, financial distress or other event that can disrupt services.