NJ - Legislation Passed to Help Prevent Hospital Closings

TRENTON, N.J. - Gov. Jon S. Corzine has approved a new state law creating an early warning system to help spot financially troubled hospitals.

The law comes amid a spate of hospital closures in the state. So far this year, four acute-care hospitals have closed: Barnert in Paterson, St. James and Columbus in Newark, and Liberty Health Greenville in Jersey City. A fifth hospital, Muhlenberg Regional Medical Center in Plainfield, shuts its doors on Wednesday.

The law, signed by Corzine on Friday, gives the state Health and Senior Services Department the authority, and access to information, needed to properly monitor the finances of the state's hospitals. The department will then be able to identify financially troubled hospitals before a crisis strikes.

"Through this legislation, the Department of Health will have an early
warning when a hospital becomes fiscally unstable and will be able to
intervene before the fiscal instability gives way to fiscal insolvency,
and yet another health care facility in the Garden State has to close
its doors forever," said state Sen. Robert Gordon, D-Bergen, a chief
sponsor of the bill.

The new state budget approved in June cut funding for hospitals and many other services. But Corzine in June also approved $44 million for a special fund to help hospitals especially in distress.

The New Jersey Hospital Association has said much more needs to be done to address problems for the more than 70 acute-care hospitals in the state _ including lack of reimbursement for services and what the association describes as "chronic underfunding" of hospital care for the poorest patients in the state.

Along with the early warning system bill, Corzine signed three other bills meant to improve safety and accountability at hospitals:

_ One measure requires hospitals to charge no more than 15 percent above the Medicare rate. The new law is meant to ensure that working poor families without insurance aren't overcharged for health care.

_ Another law requires acute-care and state psychiatric hospitals to hold annual public meetings with the communities they serve.

_ Hospital board members will also have to go through training on their roles and responsibilities under another law signed by Corzine.

"The state has a responsibility to the taxpayers to ensure that the billions in public dollars distributed to hospitals are spent as efficiently as possible," said Heather Howard, the state health commissioner.

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