Concern new Flatiron surgical center is ‘ploy to replace’ NY Eye and Ear Infirmary, Beth Israel Hospital

BY MARY REINHOLZ | Construction is nearing completion on a $13 million ambulatory surgical center in the Flatiron District owned by a group of doctors and healthcare entities affiliated with the New York Eye and Ear Infirmary of Mount Sinai Health System, The Village Sun has learned.

The project, shrouded in secrecy and operating as Peakpoint Flatiron, LLC, spreads across 16,672 square feet on the second floor of a building near Madison Square Park, according to construction workers, physicians and public records from the New York State Department of Health.

Peakpoint Flatiron, LLC is a Delaware limited-liability company registered to conduct business in New York as the Eye and Ear of Mount Sinai Surgery Center, D.O.H. records reveal.

Workers at the site, at 16 W. 25th St., are creating two operating rooms, four recovery rooms and requisite support spaces for the freestanding ASC that will accommodate surgeries performed by both ophthalmologists (eye doctors) and otolaryngologists (head and neck physicians, as well as ear, nose and throat physicians).

All outpatients will be referred from Mount Sinai facilities, including Beth Israel Hospital, which will be involved in backup emergency services for the new center, documents show.

Partners include 34 individual physicians who each hold a small percentage of ownership in the venture, typically 1.59 percent, amounting to nearly 54 percent. Other partners are executives at Merritt Healthcare, as well as Mount Sinai’s Ambulatory Ventures, Inc. (36 percent), which, when combined with the partner-physicians, all together total 100 percent.

Sarah Sanford, Merritt’s president of finance, who owns 0.75 percent of the initiative, is listed as a manager at the site. She did not respond to requests for information from The Village Sun. One of her colleagues at Merritt hung up his phone when this reporter called.

Merritt is a privately held, Connecticut-based developer and manager of surgical ambulatory centers that has previously worked on joint ventures with Mount Sinai. Merritt is the contractor on the Flatiron site where construction could conclude in a month, claimed an easygoing manager on the second floor.

“Four weeks,” he said in recent remarks to this reporter, holding up his fingers to designate the time frame. He gave his name as Jim but would not provide his full name. Jim said that Merritt retained the Bar Construction Company in New Hyde, New York, to oversee the work, an assertion confirmed by a Bar operative on Long Island. When it’s completed, the project will become one of an increasing number of same-day medical centers in the U.S. that perform surgeries like cataract and gall bladder removal without requiring overnight stays for out-patients. ASCs are less expensive than hospitals for parties responsible for payment.

Questions about the forthcoming Flatiron ASC were not always greeted with clarity or enthusiasm by physicians, public-relations operatives and political figures. One NYEE doctor who has worked for years at the iconic, 200-year-old medical institution at E. 14th Street and Second Avenue, denounced the project as a ploy by Mount Sinai to offer a replacement for both the infirmary and Beth Israel Hospital, claiming the medical giant seeks to shutter both facilities in order to realize profits from Downtown properties “worth a combined $700,000 million.”

“What’s going to happen to operating rooms at the infirmary?” he asked during a conversation with The Village Sun. “Why would [Peakpoint] duplicate services from the infirmary and place them 10 blocks away? The answer is that Sinai is cleaning house and will try to close both the infimary and Beth Israel,” opined the physician, who requested anonymity to safeguard his employment. Obviously, the new ASC center is far smaller than the hospital and infirmary.

Unremarkably, Mount Sinai officials do not agree with that assessment or claims by East Side Assemblymember Harvey Epstein, who regards the forthcoming Flatiron ASC as a “violation” of Sinai’s 2023 merger agreement between NYEE and Beth Israel Hospital, the latter which is facing a bitterly contested closure date of July 12.

“This $13 million project provides our Downtown patients with more options and access for their care and will expand care Downtown,” said Loren Riegelhaupt, an outside Sinai spokesperson in an exchange of e-mails with The Village Sun. “The similar existing services at NYEE will remain at 14th Street.”

Riegelhaupt noted that the CON (certificate of need) for the Flatiron ASC project was submitted in September 2022 to the New York State Public Health and Health Planning Council, which approved it in February 2023.

“D.O.H. gave the full approval in November of 2023,” he said. “Construction began last year and we expect the new, joint venture, state-of-the-art Article 28 freestanding ambulatory surgery center (FASC) to open later this summer pending final regulatory approval.”

The certificate of need for the Peakpoint surgery center projected 9,180 procedures “in Year One” and 9,738 “in Year Three,” with reimbursement from Medicaid at 20 percent and “Charity Care” at 2 percent. The project also accepts Medicare and commercial insurance, Riegelhaupt said.

Kew Gardens ophthalmologist Richard Najac has been named medical director at the new W. 25th Street ASC. He will oversee a project with hours of operation from 7 a.m. to 5 p.m. weekdays and a 24-hour emergency service for post-surgery telephone calls. Dr. Najac, who owns 1.59 percent of the Flatiron ASC, did not respond to an e-mail from The Village Sun requesting comment.

Riegelhaupt, the aforementioned Sinai spokesperson, did not provide any information on Dr. Najac, as requested, nor did he respond to questions about the delay of the required opening date of the Flatiron surgery center, which was originally set for this April 15.

The ASC project has been in the works for several years. It was formally announced in a September 2022 article on Mount Sinai’s Web site, in which NYEE President James C. Tsai, MD, touted the forthcoming facility as a transformative joint venture spearheaded by NYEE (“New and Advanced Ambulatory Surgery Center Will Become Leading Edge of Transformation”).

“Our focus is on meaningful change to become more what state-of-the-art health care looks like — and where it’s headed — in the twenty-first century,” Tsai stated in the article. “The new ASC is a critical part of that transformation by migrating many of our surgical procedures from the hospital to the community, and significantly enhancing the patient experience within a smaller and more intimate setting.”

Fast-forward to late this spring and some local East Village leaders had not even heard about the Flatiron project. Andrew Berman, executive director of Village Preservation, said the ASC was news to him but a reminder that community activists and political figures must more aggressively step up to landmark the historic infirmary and protect its properties from a real estate grab.

Berman said he believes that if NYEE moves out of its second building, at 13th Street and Second Avenue, “That building — so rich in history — will no doubt be sold off to the highest bidder and likely be replaced with more luxury condos. The time is now for the city to act and finally landmark this building. And the city and state must work with local communities to ensure that these vital services are not reduced or scattered to the four winds.”

An ophthalmologist who has performed numerous surgeries at NYEE declined to comment for this article. But, speaking earlier, he said there would be “more space” for operations at the Flatiron facility — a claim that a number of NYEE affiliated surgeons contest. He’s listed as one of the physicians with an ownership of 1.59 percent. Meanwhile, though, his surgical coordinator, who requested anonymity, seems convinced that the beloved E. 14th Street infirmary will eventually close.

“It’s so sad,” she said. “I grew up with it in the East Village.”