Rothman Institute is in legal fight with two onetime partners in North Jersey expansion effort

Rothman Orthopaedic Institute has hit a bump in its yearslong quest to expand beyond its core Philadelphia market.

Five years after starting an ill-fated push into North Jersey, Rothman is now fighting both of its onetime partners there in court: over Hackensack Meridian Health’s alleged poaching of doctors in one case and CarePoint Health’s $336,555 in unpaid bills in another.

The lawsuits Rothman filed this year against Hackensack Meridian and CarePoint came as the company was already embroiled in litigation with its former CEO Christopher T. Olivia, who was hired to help with a planned national expansion. Olivia alleged in a lawsuit last fall that he was fired in March 2023 for blowing the whistle on financial mismanagement.

The problems in North Jersey followed Rothman’s move into Manhattan and its New York suburbs. Rothman announced that push in partnership with Northwell Health in 2017, but has since switched its affiliation to NYU Langone Health. In March 2021, Rothman opened what it calls its flagship location in Manhattan on Madison Avenue.

Rothman has also launched an ambitious expansion in Florida, far outside its Northeast home base. In 2020, Rothman formed a joint venture with AdventHealth and now has nine offices and more than 30 doctors around the Orlando region, according to its website.

Rothman declined to comment on the lawsuits involving New Jersey partners.

Rothman, a physicians’ group, describes itself as the nation’s largest privately owned orthopedic surgical practice. It approached Hackensack Meridian Health Inc. in 2019 about forming a joint venture to open a surgery center in Hackensack.

By the time that center opened in October 2020, the talks had expanded to include the potential for Rothman and Hackensack Meridian to forge an exclusive relationship in North and Central Jersey, according to a Hackensack Meridian court filing.

Hackensack Meridian, based in Edison, is an 18-hospital system with $7.8 billion in revenue and $231 million in operating profit last year.

But five months after the Hackensack center opened, Rothman announced the first stage of an affiliation with financially struggling CarePoint Health, which owns hospitals in Bayonne, Hoboken, and Jersey City.

Hackensack Meridian said it continued its talks with Rothman after being told that Rothman “was working with CarePoint primarily to fill in coverage for night shifts.”

After that, Hackensack Meridian continued investing in the Rothman partnership, spending $150,000 for courtside advertisements during a Big East basketball tournament, a court filing said.

Then in August 2022, Rothman announced a 10-year agreement with CarePoint, including the planned opening of a surgery center in Hudson County. That’s when Hackensack Meridian terminated its talks with Rothman.

Hackensack Meridian declined to comment.

Rothman’s lawsuit in Bergen County against Hackensack Meridian came after six of the 10 doctors in its North Jersey office decided last year to go work for Hackensack Meridian. The Superior Court lawsuit, filed in January, claims that Hackensack Meridian “used improper, tortious and unlawful means to lure and entice” the doctors to leave Rothman.

“As a direct result of [Hackensack Meridian Health’s] tortious and unlawful actions, Rothman was forced to suspend its operations in Northern New Jersey and abandon its plans to expand its practice throughout New Jersey,” the lawsuit said.

Meanwhile, Rothman has also sued CarePoint twice for unpaid bills. Rothman claimed in a Hudson County Superior Court case that CarePoint’s Christ Hospital owed it $76,680 for 54 days of on-call coverage by its physicians.

In another lawsuit filed in Philadelphia Common Pleas Court in January, Rothman claims CarePoint failed to pay fees for using the Rothman brand at its facilities — even after Rothman dropped the annual fee to $283,500 from $300,000.

The lawsuit says CarePoint still owes $259,875 under the agreement, which Rothman terminated last July.

CarePoint declined to comment but said in its February response to the complaint: “The alleged damages resulted from circumstances and conditions beyond the control of CarePoint.”

CarePoint converted from a for-profit to a nonprofit last year, but has run into deep financial trouble since then.

The end result for Rothman: It now has no offices in North Jersey associated with either Hackensack Meridian or CarePoint.