400 layoff notices a sign hospital sale is moving forward

Action comes as deal is under review to sell the facility to New Jersey-based firm.

More than 400 layoff notices have gone out to employees of The Memorial Hospital of Salem County and its related entities, in what officials say is a routine action in a pending sale.

More on Inewsguru:

North-Jersey based Community Health Associates in March announced it planned to acquire the hospital in Mannington Township from its owner, Tennessee’s Community Health Systems.




Memorial Hospital spokesman George Gennaoui said Friday the layoff notices are required by New Jersey law and are “customary with ownership transitions.”

“As part of the sale agreement, Community Health Associates committed to hire substantially all employees into their same positions and compensation, with seniority recognized,” Gennaoui said.

New Jersey’s WARN (Worker Adjustment and Retraining Notification) Act requires employers to provide 60 days’ notice to communities and families ahead of any closings or mass layoffs.

More on Inewsguru:

The notice lists 339 employees at the Salem Hospital Corporation, 39 at Salem Clinic Corporation, 19 at Salem Home Care Service, LLC, and 11 from Salem Medical Professionals, P.C.

The effective layoff date for the 408 workers is Dec. 31, according to the state. Law requires the notices go out 60 days ahead of any action.

Steve Lenox, a spokesman for CHA, on Friday said the target date for the sale to close is still Dec. 31.

Lenox said earlier this week four information sessions were held by CHA for Memorial Hospital employees and more than 200 attended, he said.

“The employees were informed that they would be getting both the notice as standard procedure in a transaction such as this as well as an offer of new employment in the coming weeks,” Lenox said.

Documents filed with the New Jersey Department of Health and obtained by NJ Advance Media through a public records request show the sale price would be $3 million.

Listen to NJ.com on Alexa or via a daily podcast

Under its application to the Department of Health for a certificate of need, CHA outlined changes in its operations.

The hospital is currently licensed for 126 beds — 114 medical/surgical spots and 12 in the intensive care unit.

CHA proposes a change to 65 medical surgical beds, keep 12 for ICU patients, but dedicate 26 beds to adult psychiatric care and 30 beds for long-term care, for a total of 133 licensed beds.

At one time the hospital was licensed for 140 beds, but that number was reduced under CHS.

Founded in 1919 as a non-profit, Memorial Hospital has been owned by the for-profit Tennessee-based Community Health Systems since 2002 when it was bought for $35 million.

CHA is a Bloomfield-based organization founded in 2008. According to its website, CHA is “a healthcare real estate developer that specializes in repurposing medical facilities.”

In New Jersey, the company owns The Barnert Hospital in Paterson, Muhlenberg Hospital in Plainfield, William B. Kessler Memorial Hospital in Hammonton and Greenville Hospital in Jersey City, along with medical arts complexes in New Jersey and New York.

CHA says it would operate the Salem hospital, under a subsidiary, Salem County Hospital Corp., as a non-profit. 

This is the second time a deal to sell the hospital has moved this far.

In December 2015, the California-based Prime Healthcare Foundation said it wanted to buy Memorial. The process dragged on for a year and a half. Prime was to pay $15 million for Memorial.

But on the same day in May 2017 that the New Jersey Department of Health gave its final OK, Prime backed out of the deal.

A Department of Health spokesperson Friday said the deal between CHS and CHA remains on track.

A public hearing is planned Nov. 8 at 6 p.m. at Salem High School so the State Health Planning Board can hear public comment on the proposed sale.

After the event in Salem County, the State Health Planning Board meets Dec. 6 to review and make a recommendation on the proposed deal to health Commissioner Shereef Elnahal.

The commissioner then has up to 120 days to make a final decision on whether the sale is a “go.”

Bill Gallo Jr. may be reached at bgallo@njadvancemedia.com. Follow Bill Gallo Jr. on Twitter @bgallojr. Find NJ.com on Facebook. Have a tip? Tell us. nj.com/tips

This article was originally published by Nj.com. Read the original article here.

Latest on Inewsguru: