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As it continues to face financial headwinds, Hudson County-based CarePoint Health announced Nov. 4 a financial restructuring to improve its capital structure and avoid service interruptions.

The nonprofit oversees three hospitals: Bayonne Medical Center, Christ Hospital in Jersey City and Hoboken University Medical Center. As NJBIZ reported, CarePoint has explored a range of options – such as filing bankruptcy, layoffs and a merger – to shore up its finances.

The organization filed for Chapter 11 relief in the U.S. Bankruptcy Court in Delaware Monday. CarePoint says the decision was driven by several factors, including a dramatic increase in direct costs of operating the hospitals after the pandemic, insufficient state funding, and persistent reimbursement challenges like all hospitals across the country are facing.

To ensure that the hospitals remain open with no interruptions, CarePoint obtained $67 million in new financing. It says the funds will allow the organization to continue providing high-quality care as well as ensure that salary and benefits continue for employees.

CarePoint Health chairman and CEO Dr. Achintya Moulick will lead the organization through this next phase. Moulick has overseen the transition of the system to a nonprofit as well as helped keep the hospitals open post-pandemic. Last week, CarePoint Health and Hudson Regional Hospital advanced merger plans to create the new Hudson Health System.

In a press release announcing these latest developments, Moulick said that CarePoint chose this path after thoroughly evaluating all available options to ensure continued delivery of uninterrupted care while enabling this “necessary financial restructuring.”

‘Great news’ for residents

“Safety net hospitals like Christ Hospital and Hoboken University Medical Center are vital lifelines for the uninsured, underinsured, and most vulnerable populations,” said Moulick. “We are proud to have kept our doors open these past five years despite an extremely challenging environment. We are also grateful for our employees and physicians across the organization, whose deep commitment to addressing health inequities and delivering high-quality, compassionate care to our communities has been unwavering.”

Area mayors applauded the announcement.

“This financial restructuring will allow Christ Hospital and CarePoint’s other facilities to remain open while the system works to integrate its operations within the new Hudson Health System, and that is great news for Jersey City residents,” said Jersey City Mayor Steven Fulop. “I am confident that this is the right direction and that it will put these essential community hospitals on more solid financial footing moving forward, which is critically important for Hudson County.”

“I offer my sincere thanks to all of the CarePoint leadership for their contributions to the Hoboken community,” said Hoboken Mayor Ravi Bhalla. “This restructuring is a critical step in the right direction to ensure the finances are now aligned to offer continued, quality healthcare to Hoboken with Hudson Health Systems leading the way. It is welcome news for residents of Hoboken and Hudson County as we were able to ensure that a hospital continues to remain right here in our Mile Square.”

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