In light of the potential closure of Bayonne Medical Center due to a hospital merger, of which elected officials had no prior knowledge, Assembly Democrats Nicholas Chiaravalloti, Angela McKnight and Robert Karabinchak sponsored legislation aimed at increasing hospitals’ transparency to help prevent the abrupt loss of important healthcare services in local communities.
Two of the bills in the three-bill package were signed into law Tuesday, while the third bill had previously been signed on January 13.
“Accessible healthcare is a human right. For a district as densely populated as the 31st, the closure of a medical center could be the difference between life and death for our residents,” said Assemblyman Nicholas Chiaravalloti (D-Hudson). “If we had known sooner about a planned merger that could leave residents without access to healthcare, we could’ve had conversations with CarePoint Health to try to determine a better approach. If unstable finances may lead to a shut-down, there must be prior warning to the community and any affected parties. These entities cannot be allowed to operate in the shadows with little oversight.”
“These laws will ensure that a hospital’s business practices are above-board and communities are never at risk of losing important services,” said Assemblywoman McKnight (D-Hudson).
The laws draw upon recommendations in the State Commission of Investigation (SCI) report regarding hospital-related oversight and accountability in New Jersey, after its investigation into CarePoint Health’s financial management.
The bill previously signed into law (A-5917) gives broader oversight capabilities to the Department of Health (DOH) by expanding its Early Warning System, whose purpose is to detect whether hospitals are nearing or already in financial distress. The new law will require the system to monitor the quantity and suitability of any fees, allocations and payments made to third parties.
One of the bills signed Tuesday (A-5916) allows the Commissioner of Health to notify elected officials if certain hospitals are found to be in financial distress.
Increased transparency will also be required of hospitals when it comes to providing financial information to the DOH. The third law (formerly bill A-5918) requires non-profit hospitals to share IRS Form 990 and for-profit hospitals to submit equivalent information to the DOH in order to reveal aspects of their revenue and taxation.
“Our hospitals are a vital part of our communities. One shut-down can leave residents for miles without access to a hospital,” said Assemblyman Robert Karabinchak (D-Middlesex). “Knowing sooner than later that a medical center is at risk of closing will allow us to take action and do what we can to help. Greater transparency is key to protecting our communities.”
Further stipulations will require hospitals to submit information about ownership, leases and rentals of offices and properties. It also requires the identification of investors, business partners and other affiliates while sharing information about projects and ventures financially associated with the hospital.
“With better oversight, we can make sure that what might happen to Bayonne Medical Center cannot – and will not – happen to any other hospitals and their communities going forward,” said McKnight.
“If unstable finances may lead to a shut-down, there must be prior warning to the community and any affected parties. These entities cannot be allowed to operate in the shadows with little oversight,” said Chiaravalloti.