Vitale ‘Health Care Stabilization Fund Act’ Signed Into Law

TRENTON – A bill sponsored by Senator Joseph F. Vitale which will establish the Health Care Stabilization Fund to ensure seamless access to health care in communities served by a hospital facing closure was signed into law by Governor Corzine today.

“New Jersey’s hospital system is in crisis, and unless we take serious steps to stop the hemorrhaging, people who rely on hospitals as their primary health care providers will be put in jeopardy,” said Senator Vitale, D-Middlesex, and Chair of the Senate Health, Human Services and Senior Citizens Committee. “This new law addresses the epidemic of closures happening all over the Garden State, and seeks to act as a safety valve for the facilities which are essential to the public safety of our communities. Through this measure, we are offering some relief to hard-hit hospitals, and assuring New Jersey residents that the hospital system will be there in their time of need.”

The new law, S-1978, known as the “Health Care Stabilization Fund Act,” will create a $44 million fund in the Department of Health and Senior services, and will authorize the Commissioner of Health to make emergency grants from the fund to hospitals or health-care facilities to maintain access to essential services for a community facing a hospital closure due to financial distress. The bill will require the Commissioner to consider certain factors before awarding a grant, such as extraordinary circumstances threatening access to care in a community, the unavailability of funding from other sources, and the effects of a grant to stabilize access to essential health care services, such as emergency room access. The bill will also require that any hospital receiving a stabilization grant would have to make changes in governance and business operations to continue providing access to services, and that the facility will be subject to State audits and oversight by the State Comptroller.

“As a condition of receiving one of these grants, hospitals have to agree to be accountable to the people of New Jersey, and subject to audits and review by State regulators,” said Senator Vitale. “If these funds are going to be effective in ensuring health care access, we can’t write a blank check without any sort of accountability. New Jersey’s taxpayers deserve to know that such a substantial investment in health care access is being wasted.”

The bill comes as a recommendation of the Reinhardt Commission on Rationalizing Health Care Resources, which was empanelled by Governor Corzine to look at issues affecting health care facilities and make recommendations to stabilize the industry. Eighteen hospitals in New Jersey have closed since 1992 – many in urban areas, catering to the needs of uninsured State residents living in these cities. Senator Vitale noted that in addition to ensuring a healthy business environment for New Jersey hospitals, the State must look at other ways to promote care for those in need.

“One of the primary causes for the economic crisis facing many New Jersey hospitals is the high cost of emergency care to treat the uninsured,” said Senator Vitale, who also authored a plan to move towards affordable health care coverage for all New Jerseyans. “While we recognize that we have a Statewide obligation to ensure health care access for all State residents, we need to find a smarter way to spend New Jersey’s health care dollars. A stable hospital system is only one part of a successful Statewide healthcare model, and working in connection with other initiatives, we can guarantee that everyone has access to appropriate, affordable health care in New Jersey.”

The bill was approved in both the Senate and Assembly last week.

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