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September 2008

New Jersey Governor Signs Bill to Improve Access and Hospital Functioning

New Jersey Governor Jon S. Corzine signed a four-bill legislative package on August 4 that contains measures to protect the uninsured, improve access to health care and enable greater monitoring and transparency of hospital financial operations. These bills implement the recommendations of the Commission on Rationalizing Health Care Resources, which was created by Governor Corzine on October 12, 2006 and released its Final Report on January 24, 2008. As explained in the report, the Commission was given a mandate “to explore (1) why so many hospitals in this State are struggling financially, (2) which among hospitals approaching the State for financial assistance warrant that assistance and (3) what steps might be taken to rationalize the functioning of New Jersey’s hospital system and other components of the health care delivery system that interact with the hospital system.”  A summary of each of the bills follows:

  • A. 2609 caps hospital charges at no more then 15 percent above the Medicare payment rate for residents with a gross family income less than 500 percent of the federal poverty level. The law also requires that the state Department of Health and Human Services develop a sliding fee scale based on family income to be used in order to determine reasonable costs for hospital services.
  • S. 1796 gives the Health Department the authority and the information it needs to monitor hospital finances, identify struggling hospitals early, and attempt to resolve their financial problems by introducing a system of progressive monitoring and intervention.
  • A. 2607 mandates general acute-care and psychiatric hospitals to hold public meetings at least annually to discuss issues relating to hospital operations and services delivery.
  • S. 1795 requires comprehensive training for all hospital trustees to ensure they provide effective financial oversight and hold hospital management accountable.

Bill A. 2607 will become effective 60 days after enactment while the other three bills will take effect 180 days after enactment.