Corzine Signs Band-Aid Legislation To Protect Ailing Hospital System

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TRENTON–Last week, Gov. Jon S. Corzine signed into law a multi-bill legislative package aimed at stabilizing the long-term financial health of the state’s hospital industry to stave-off future hospital closings.

Four acute-care hospitals have closed already this year. A fifth, Muhlenberg Regional Medical Center in Plainfield, planned to stop admitting new patients Wednesday in preparation for closure.

“When avoidable financial hardships force hospitals to shut their doors, New Jerseyans in need are forced to travel longer distances to receive immediate medical care,” said Assemblyman Herb Conaway (D-Burlington), chairman of the Assembly health committee and a practicing physician.  “We cannot allow fiscal issues to cause another hospital to close its doors and further jeopardize the quality and availability of health care in New Jersey.”

The multi-bill package is intended to enhance the fiscal transparency, accountability, and efficiency at general hospitals across New Jersey. The governor hopes the new laws will help to counteract some of the significant issues feeding the current hospital fiscal crunch, but it’s unclear how much impact they will have.

The New Jersey Hospital Association contends that the state must address the underlying issue of charity care reimbursement to ensure the future financial viability of New Jersey hospitals. State law requires New Jersey hospitals to treat all patients regardless of their ability to pay, yet the state chronically underfunds charity care. Hospitals currently receive just 70 percent of their costs for treating Medicaid patients, and physicians often receive even less.

The package of bills signed into law by Corzine does not address the charity care issue, but it does attempt to reslove several other issues.

One measure will require all general hospital board trustees to complete a training program approved by the commissioner of the state Department of Health and Senior Services.

“Hospital trustees must be trained in their role and responsibilities to ensure that a hospital is operating efficiently and managing its finances responsibly,” said Assemblywoman Connie Wagner (D-Middlesex/Mercer).  “Appropriate education and training are key to ensuring that hospital boards are staffed with the most capable and knowledgeable individuals to prevent mismanagement of precious hospital resources.”

Another will require every New Jersey hospital to hold at least one annual public meeting to allow the community to discuss concerns related to the delivery of health services.

“It is imperative that New Jersey communities are part of the decision-making process regarding the delivery of health care services to ensure that hospitals are providing quality care to the communities that rely on its services the most,” said Assemblyman Jerry Green (D-Union).

Another bill in the package will authorize the state Department of Health and Senior Services to perform enhanced monitoring of financial performance and intervene in cases where a hospital is found to be in fiscal distress.

“Audits and monitoring by state officials will bring accountability and transparency to New Jersey’s healthcare industry,” said Assemblywoman Bonnie Watson-Coleman (D-Mercer).  “The state has a responsibility to step in and hold hospitals accountable for how health care dollars are spent and managed.”

The final measure will prohibit hospitals from charging uninsured patients an amount greater than 15 percent of the Medicare rate while creating a sliding-scale based on income to determine how much an uninsured patient is charged for services rendered.

All of the measures are based on recommendations for improving the fiscal accountability and financial health of the state’s hospital industry from the New Jersey Commission on Rationalizing Health Care Resources. The commission released its final report earlier this year.


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