New Jersey Hospitals Required to File Monthly Reports on Their Financial Health

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Written by Rob Kurtz
Wednesday, 27 August 2008
As part of a series of healthcare bills signed into law by New Jersey Governor Jon S. Corzine, hospitals in the state will now be required to file monthly, rather than quarterly, unaudited financial information to help the state identify distressed hospitals sooner. The new law (bill S-1796/A-2608) comes after several hospital closures over the past few years and recent reports that many of the state’s hospitals are in financial distress. “New Jersey has faced an epidemic of hospital closures in recent years,” said Senator Bob Gordon (D-Bergen), the prime sponsor of S-1796, according to a release from Gov. Corzine’s office. “Through this legislation, the department of health will have an early warning when a hospital becomes fiscally unstable, and will be able to take the appropriate action to ensure that the health care needs of the community are met. Hopefully, we will be able to intervene before fiscal instability gives way to fiscal insolvency, and yet another health care facility in the Garden State has to close its doors forever.” The law states that if the commissioner of health and senior services determines that a hospital is in financial distress or at risk of being in financial distress, then the commissioner may appoint a monitor (at the hospital’s expense) to prevent further financial deterioration. “A monitor: (1) shall be authorized to attend all hospital board meetings, executive committee meetings, finance committee meetings, steering committee meetings, turnaround committee meetings, or any other meetings concerning the hospital’s fiscal matters; and (2) may be authorized to have voting and veto powers over actions taken in the above mentioned meetings,” according to the new law. Assembly Majority Leader Bonnie Watson Coleman (D-Mercer) added that, “Audits and monitoring by state officials will bring accountability and transparency to New Jersey’s healthcare industry. The state has a responsibility to step in and hold hospitals accountable for how health care dollars are spent and managed,” according to the release. View the new New Jersey hospital law (pdf). View Gov. Corzine's statement.