Vitale Bill To Ease Economic Pressures On Closing Hospitals Receives Final Legislative Approval

TRENTON – A bill sponsored by Senate Health, Human Services and Senior Citizens Committee Chairman, Senator Joseph F. Vitale, which would make changes to the Hospital Asset Transformation Program to provide financial assistance to nonprofit hospitals in the process of closing was approved by the Senate today by a vote of 25-11, receiving final legislative approval.

“During these times of economic uncertainty, hospital closings unfortunately have become more and more frequent,” said Senator Vitale, D-Middlesex. “New Jersey has an existing program to help staunch some of the fiscal hemorrhaging that many health care providers face when closing down a hospital, but when the closure is tied up in the appeals process, the financial assistance is blocked. People served by a hospital have every right to fight as hard as they can to keep that facility open, but at the same time, we need to continue providing transitional health care to the community at large.”

The bill, S-2352, would clarify provisions under the “New Jersey Health Care Facilities Financing Authority Law,” which governs the hospital asset transformation program. Under the bill, hospitals would be authorized to apply for and receive transitional aid to pay off any outstanding bonds or existing debt service, regardless of the status of any third-party appeals into the closure of the hospital. The Department of Health recommended the change because the appeals process, in regards to hospital closure, can sometimes take up to two years, exhausting the hospital’s resources to provide a seamless transition to a more sustainable community health care model.

“We can’t hold the health care system hostage while advocates argue in court on the merits or negatives of keeping a hospital open,” said Senator Vitale. “By providing financial assistance through the asset transformation program, we can ensure a smoother transition of health care services for the community. Whatever the outcome of court appeals, our highest priority must be the health and safety of the community, and access to quality care.”

Senator Vitale noted that the appeal over the closure of Muhlenberg Regional Medical Center in Plainfield stood as the perfect example for the need to change the existing system. In 2007, operating losses at Muhlenberg had become unsustainable, and Muhlenberg’s parent company, Solaris Health System, applied with the Department of Health for a Certificate of Need to close the Medical Center, so as not to jeopardize care at Solaris’s other affiliates. Muhlenberg’s Certificate of Need was approved and the hospital closed its doors to inpatients on August 13.

However, more than a month after Muhlenberg closed acute care services, a third-party group representing the City of Plainfield, People’s Organization for Progress, and the Save Muhlenberg group filed an appeal. According to Senator Vitale, because the appeals process is ongoing, Muhlenberg cannot access financial assistance intended for closing hospitals, and as a result, safety net programs at Muhlenberg, and the financial integrity of Solaris’s other affiliates, may now be in jeopardy.

“Understanding that the closure of Muhlenberg is a polarizing issue for the people of Plainfield and the State healthcare community at large, I don’t think either side wants to see access to quality care be cut off,” said Senator Vitale. “However, the current hospital asset transformation program cannot meet its intended purposes while the appeals process is ongoing. This bill preserves the people’s democratically-guaranteed right to petition their government while ensuring that health care providers get the resources they need to provide for the adequate transition of care for the community.”

The bill was approved by the Assembly last month, and now heads to the Governor to be signed into law.

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