Revises regulation of certain health care facilities.

A5185

ASSEMBLY, No. 5185

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 1, 2026

Sponsored by:

Assemblyman� STERLEY S. STANLEY

District 18 (Middlesex)

Assemblywoman� SHANIQUE SPEIGHT

District 29 (Essex and Hudson)

Assemblywoman� HEATHER SIMMONS

District 3 (Cumberland, Gloucester and Salem)

Assemblywoman� KATIE BRENNAN

District 32 (Hudson)

SYNOPSIS

���� Revises regulation of certain health care facilities.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning certain health care facilities and
revising various parts of statutory law.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� Section 8 of P.L.1970,
c.334 (C.26:2G-28) is amended to read as follows:

���� 8.��� Any person, firm,
corporation, partnership, society or association who shall operate or conduct a
narcotic and substance use disorder treatment center without first obtaining
the certificate of approval required by this act, or who shall operate such establishment
after revocation or suspension of a certificate of approval, shall be liable to
a penalty of
[
$25
]

$12,500

for each day of operation in violation hereof for the first offense and for any
subsequent offense shall be liable to a penalty of
[
$50
]

$25,000
for each day of
operation in violation hereof.

���� The penalties authorized by
this section shall be recovered in a summary proceeding instituted by the
Attorney General, at the request of the commissioner, pursuant to the
"Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et
seq.).� Money penalties, when recovered, shall be payable to the General State
Fund.

����
Notwithstanding any law,
rule, or regulation to the contrary, on and after the effective date of P.L.���
, c.� (pending before the Legislature as this bill), the department shall, by
regulation adopted pursuant to the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.), impose a graduated penalty commensurate
with the facility�s licensed-bed capacity. �The department may annually
increase the penalties authorized by this section, with any increase to the
penalties authorized by this section not to exceed the cumulative annual
percentage increase in the Consumer Price Index for the five fiscal years prior
to the date of the proposed subsequent increase.

(cf: P.L.2017, c.131, s.92)

���� 2.� Section 5 of P.L.1971,
c.136 (C.26:2H-5) is amended to read as follows:

���� 5. a. The commissioner, to
effectuate the provisions and purposes of
[
this
act
]

P.L.1971,
c.136 (C.26:2H-1 et seq.)
, shall have the power to inquire into health care
services and the operation of health care facilities and to conduct periodic
inspections of such facilities with respect to the fitness and adequacy of the
premises, equipment, personnel, rules and bylaws and the adequacy of financial
resources and sources of future revenues.

���� b.��� The commissioner, with
the approval of the board, shall adopt and amend rules and regulations in
accordance with the "Administrative Procedure Act," P.L.1968, c.410
(C.52:14B-1 et seq.) to effectuate the provisions and purposes of
[
this act
]

P.L.1971,
c.136 (C.26:2H-1 et seq.)
, including but not limited to: (1) the
establishment of requirements for a uniform Statewide system of reports and
audits relating to the quality of health care provided, health care facility
utilization and costs; (2) certification by the department of schedules of
rates, payments, reimbursement, grants and other charges for health care
services as provided in section 18; and (3) standards and procedures relating
to the licensing of health care facilities and the institution of certain
additional health care services.

���� c.���� The commissioner may
enter into contracts with any government agency, institution of higher
learning, voluntary nonprofit agency, or appropriate planning agency or
council; and such entities are authorized to enter into contracts with the
commissioner to effectuate the provisions and purposes of
[
this act
]

P.L.1971,
c.136 (C.26:2H-1 et seq.)
.

���� d.��� The commissioner may
provide consultation and assistance to health care facilities in operational
techniques, including but not limited to, planning, principles of management,
and standards of health care services, and, in the case of a general hospital,
to appoint a monitor if the commissioner determines that a monitor is warranted
for a hospital that is in financial distress or at risk of being in financial
distress, and to participate in the development and oversight of corrective
measures to resolve a hospital's financial or potential financial difficulties,
pursuant to section 2 of P.L.2008, c.58 (C.26:2H-5.1a).

���� e.���� At the request of the
commissioner, health care facilities shall furnish to the Department of Health
and Senior Services such reports and information as it may require to
effectuate the provisions and purposes of
[
this
act
]

P.L.1971,
c.136 (C.26:2H-1 et seq.)
, excluding confidential communications from
patients.

���� f.���� The commissioner may
institute or cause to be instituted in a court of competent jurisdiction
proceedings to compel compliance with the provisions of
[
this act
]

P.L.1971,
c.136 (C.26:2H-1 et seq.)
or the determinations, rules, regulations and
orders of the commissioner,
including seeking injunctive relief against any
person, firm, corporation, partnership, or licensed healthcare facility
.

���� g.��� Notwithstanding any
rules and regulations governing private long-term health care facilities and
enforcing the 1967 Life Safety Code, as amended and supplemented, the
commissioner shall permit third floor occupancy of such facilities by owners,
members of their immediate families, and licensed professionals employed at
such facilities.

(cf:� P.L.2008, c.58, s.1)

���� 3. Section 8 of P.L.1971,
c.136 (C.26:2H-8) is amended to read as follows:

���� 8.
a.
No certificate of
need shall be issued unless the action proposed in the application for such
certificate is necessary to provide required health care in the area to be
served, can be economically accomplished and maintained, will not have an
adverse economic or financial impact on the delivery of health care services in
the region or Statewide, and will contribute to the orderly development of
adequate and effective health care services. In making such determinations
there shall be taken into consideration (a) the availability of facilities or
services which may serve as alternatives or substitutes, (b) the need for
special equipment and services in the area, (c) the possible economies and
improvement in services to be anticipated from the operation of joint central
services, (d) the adequacy of financial resources and sources of present and
future revenues, (e) the availability of sufficient manpower in the several
professional disciplines, (f) the impact on the cost of health care services to
consumers, (g) the quality, equity, or access to health care services in any
region in the State, and (h) such other factors as may be established by
regulation. The State Health Plan shall also be considered in determining
whether to approve a certificate of need application.�

����
b.
In the case of an
application by a health care facility established or operated by any recognized
religious body or denomination the needs of the members of such religious body
or denomination for care and treatment in accordance with their religious or
ethical convictions may be considered to be a public need.�

����
c. The Commissioner of
Health shall be permitted to debar a health care facility or any individual in
the ownership structure of a health care facility that is licensed under the
"Health Care Facilities Planning Act," P.L.1971, c.136 (C.26:2H-1 et
seq.) from eligibility for a certificate of need after a determination that the
health care facility has substantial prior or continuing violations of the
"Health Care Facilities Planning Act," P.L.1971, c.136 (C.26:2H-1 et
seq.) or certificate of need requirements.� In each case, the decision to debar
shall be made at the discretion of the Commissioner of Health, who may consider
the following factors as material in each decision to debar:

����
(1) the record of violations
by the health care facility or the facility�s owners, including, without
limitation, any member, manager, partner, shareholder, trustee, trust
beneficiary, corporate officer or director, or any person holding a direct or
indirect interest through a trust, limited liability company, limited
partnership, or corporation, regardless of the percentage of ownership,
controlling or not; and the record of violations of other health care
facilities within the same ownership system;

����
(2) the significance or
scale of the violations, including but not limited to, whether the violations
risk life or safety or restrict access to care;

����
(3) the existence of
outstanding audits or failure to pay previous fines or penalties;

����
(4)

the existence of a record of convictions for any offense
related to healthcare fraud, patient abuse or neglect, bribery, embezzlement,
kickbacks, or financial crimes within the past 10 years by the facility�s
owners, including, without limitation, any member, manager, partner,
shareholder, trustee, trust beneficiary, corporate officer or director, or any
person holding a direct or indirect interest through a trust, limited liability
company, limited partnership, or corporation regardless of the percentage of
ownership, controlling or not;

����
(5) failure to respond to a
request from the Commissioner of Health to produce records, forms, or documents;
and

����
(6) submission of falsified
or altered records, forms, or documents.

����
d.� If the Commissioner of
Health debars a health care facility or individual from eligibility for a
certificate of need, the health care facility or individual shall be furnished
with a written notice stating that:

����
(1) debarment has been
imposed, the date on which debarment becomes effective, and the reasons
therefor; and

����
(2) if the health care
facility or individual chooses to appeal the debarment, the health care
facility or individual shall submit the appeal in writing to the Department of
Health within 30 days of receipt of the notification of debarment pursuant to
this section.

����
e. If the Commissioner of
Health receives a timely request for appeal of debarment pursuant to this
section, the commissioner, within 15 days of receipt of the appeal, shall refer
the matter to the Office of Administrative Law for adjudication.

����
f. �(1)� If a hospital is
debarred, the license for any other associated health care facility within the
hospital�s health system shall be made provisional pending the completion of a
financial audit and the implementation of a comprehensive improvement plan,
which shall incorporate all of the hospitals in the hospital�s health system
and shall be submitted by the hospital to, and approved by, the department prior
to implementation of the plan.� The plan shall propose:

����
(a)�� cost containment
measures, which shall include an evaluation of how such measures will impact
the standard charges for items and services provided by each applicable
hospital;

����
(b)�� solutions to existing
disparities in the provision of health care services to medically underserved
groups, such as low-income persons, racial and ethnic minorities, immigrants, and
persons with disabilities; and

����
(c)�� a plan to restructure
the hospital�s health system such that all hospitals within the system provide
adequate services and access to care for the communities served by the health
system.

����
(2)�� Licenses made
provisional pursuant to paragraph (1) of this subsection shall automatically
convert to a full license to operate in the State of New Jersey one year
following the implementation of an approved comprehensive improvement plan pursuant
to this subsection.

����
g.� As used in this
section:

����
�Health system� means an
organization or group of entities, including at least one hospital and one or
more physician groups providing comprehensive, coordinated care through shared
ownership, joint management, or a common governance structure.

����
�Hospital� means a general
acute care hospital licensed by the Department of Health pursuant to P.L.1971,
c.136 (C.26:2H-1 et seq.).

(cf: P.L.1992, c.31, s.2)

���� 4. (New section) a. For the
purposes of this section,

���� �Health care real estate
investment trust� means a real estate investment trust, as defined by 26 U.S.C s.856,
whose assets consist of real property held in connection with the use or
operations of a health care facility or a provider of health care.

���� �Satellite facility� means a
facility that is either created by, or acquired by, a health care facility for
the purpose of furnishing health care services within the scope of the health
care facility�s license under the name, ownership, and financial and
administrative control of the health care facility and located farther than 250
yards from the parent health care facility�s campus, including areas determined
by the department to be part of the parent health care facility�s campus.

���� b. No certificate of need, as required
by section 7 of P.L.1971, c.136 (C.26:2H-7), shall be provided to a health care
facility constructed or expanded after the effective date of P.L.��� , c.��
(C.�� ) (pending before the Legislature as this bill) if the proposed or
transferred site of the health care facility is leased from a health care real
estate investment trust; provided, however, that any health care facility that
is leasing its site from a health care real estate investment trust as of the
effective date of P.L.��� , c.���� (C.������� ) (pending before the Legislature
as this bill) shall be exempt from the provisions of this section and the
commissioner may waive the provisions of this section and provide a certificate
of need to the proposed or transferred site leased from a health care real
estate investment trust of a satellite facility that provides outpatient
services.

���� 5.� Section 14 of P.L.1999, c.154
(C.26:2H-12.12) is amended to read as follows:

���� 14.� Effective 12 months after
the adoption of regulations establishing standard health care enrollment and
claim forms by the Commissioner of Banking and Insurance pursuant to section 1
of P.L.1999, c.154 (C.17B:30-23), a health care facility licensed pursuant to
P.L.1971, c.136 (C.26:2H-1 et seq.) is responsible for filing all claims for
third party payment, including claims filed on behalf of the health care
facility's patient for any health care service provided by the health care
facility that is eligible for third party payment, except that at the patient's
option, the patient may file the claim for third party payment.

���� a.���� In the case of a claim
filed on behalf of the health care facility's patient, the health care facility
shall file the claim within 60 days of the last date of service for a course of
treatment, on the standard claim form adopted by the Commissioner of Banking
and Insurance pursuant to section 1 of P.L.1999, c.154 (C.17B:30-23).

���� b.��� In the case of a claim
in which the patient has assigned the patient's benefits to the health care
facility, the health care facility shall file the claim within 180 days of the
last date of service for a course of treatment, on the standard claim form adopted
by the Commissioner of Banking and Insurance pursuant to section 1 of P.L.1999,
c.154 (C.17B:30-23).� If the health care facility does not file the claim
within 180 days of the last date of service for a course of treatment, the
third party payer shall reserve the right to deny payment of the claim, in
accordance with regulations established by the Commissioner of Banking and
Insurance, and the health care facility shall be prohibited from seeking any
payment directly from the patient.

���� (1)�� In establishing the
standards for denial of payment, the Commissioner of Banking and Insurance
shall consider the length of delay in filing the claim, the good faith use of
information provided by the patient to the health care facility with respect to
the identity of the patient's third party payer, delays in filing a claim
related to coordination of benefits between third party payers and any other
factors the commissioner deems appropriate, and, accordingly, shall define
specific instances where the sanctions permitted pursuant to this subsection
shall not apply.

���� (2)�� A health care facility
which fails to file a claim within 180 days and whose claim for payment has
been denied by the third party payer in accordance with this subsection may, in
the discretion of a judge of the Superior Court, be permitted to refile the
claim if the third party payer has not been substantially prejudiced thereby.�
Application to the court for permission to refile a claim shall be made within
14 days of notification of denial of payment and shall be made upon motion
based upon affidavits showing sufficient reasons for the failure to file the
claim with the third party payer within 180 days.

���� c.���� The provisions of this
section shall not apply to any claims filed pursuant to P.L.1972, c.70
(C.39:6A-1 et seq.).

���� d.��� A health care facility
which violates the provisions of subsection a. of this section may be subject
to a civil penalty
[
of
$250
]

for each violation
[
plus
$50 for each day after the 60th day that the health care facility fails to
submit a claim
]

in accordance with section 13 or 14 of P.L.1971, c.136
(C.26:2H-13 or C.26:2H-14)
.� The penalty shall be sued for and
collected by the Department of Health pursuant to the "Penalty Enforcement
Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).

(cf:� P.L.2012, c.17, s.184)

���� 6.� Section 2 of P.L.1988, c.113
(C.26:2H-13.1) is amended to read as follows:

����
2.
� A person making
application for, or who has been issued, a license to operate a residential
health care facility who conceals the fact that the person has been denied a
license to own or operate a residential facility, or that the person's license
to own or operate a residential facility has been revoked by a department or
agency of state government in this or any other state is liable for a civil
penalty
[
of
not more than $5,000.00
]

in accordance with section 13 or 14 of P.L.1971, c.136
(C.26:2H-13 or C.26:2H-14)
, and any license to operate a
residential health care facility which has been issued to that person shall be
immediately revoked.

(cf: P.L. 1988, c.113, s.2)

���� 7.� Section 14 of P.L.1971,
c.136 (C.26:2H-14) is amended to read as follows:

���� 14.� Any person, firm,
partnership, corporation or association who shall operate or conduct a health
care facility without first obtaining the license required by this act, or who
shall operate such health care facility after revocation or suspension of license,
shall be liable to a penalty of not more than
[
$2,500
]

$12,500

as provided for by regulation for each day of operation in violation hereof for
the first offense and
[
$5,000
]

$25,000

for any subsequent offense.� Any person, firm, partnership, corporation or
association who violates any rule or regulation adopted in accordance with this
act as the same pertains to the care of patients and physical plant standards
shall be subject to a penalty of not more than
[
$5,000
]

$25,000
as provided for
by regulation for each day that he is in violation of such rule or regulation.�
Upon notification to the facility of such violations as pertain to the care of
patients or to the hazardous or unsafe condition existing in or upon the
structure in which the licensed facility is maintained, the commissioner shall
allow the facility 72 hours in which to correct any such violation and if at
the end of such period the violation is not corrected and it poses an imminent
threat to the health, safety or welfare of the public or the residents of the
facility, he may, in his discretion, summarily suspend the license of the
facility without a hearing and may order immediate correction of such violation
as a prerequisite of reinstatement of licensure.� If a licensee that is subject
to summary suspension shall deny that a violation exists or has occurred, he
shall be have the right to apply to the commissioner for a hearing.� Such
hearing shall be held and a decision rendered within 48 hours of receipt of
said request.� If the commissioner shall rule against the licensee, the licensee
shall have the right to apply for injunctive relief against the commissioner's
order.� Jurisdiction of such injunctive relief shall be in the Superior Court
of New Jersey.� Nothing herein shall be construed to prevent the commissioner
from thereafter suspending or revoking the license in accordance with the
procedure set forth in section 13.� If, within one year after such violation
such person, firm, partnership, corporation or association is found guilty of
the same violation such penalties as hereinbefore set forth shall be doubled,
and if there be a third violation within such time, such penalties shall be
tripled.� In addition thereto the department may, in its discretion, suspend
the license for such time as it may deem proper or revoke said license.

���� Any person, firm, partnership,
corporation or association who shall, except in cases of an emergency, maintain
more patients in his premises than he is licensed so to do, shall be subject to
a penalty, in accordance with the procedure set forth in section 13, in an
amount equal to the daily charge collected from such patient or patients plus
$25.00 for each day each extra patient is so maintained.

����
Notwithstanding any law,
rule, or regulation to the contrary, on and after the effective date of P.L.���
, c.� (pending before the Legislature as this bill), the department shall, by
regulation adopted pursuant to the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.), impose a graduated penalty commensurate
with the facility�s licensed-bed capacity. The department may annually increase
the penalties authorized by this section, with any increase to the penalties
authorized by this section not to exceed the cumulative annual percentage
increase in the Consumer Price Index for the five fiscal years prior to the
date of the proposed subsequent increase.

(cf:� P.L.2003, c.117, s.18)

���� 8.� Section 15 of P.L.1971,
c.136 (C.26:2H-15) is amended to read as follows:

���� 15.� Whenever a residential
health care facility, boarding house or rooming house, not licensed hereunder,
by public or private advertising or by other means holds out to the public that
it is equipped to provide postoperative or convalescent care for persons with
mental illness or intellectual disabilities or who are suffering or recovering
from illness or injury, or who are chronically ill, or whenever there is reason
to believe that any such facility or institution, not licensed hereunder, is
violating any of the provisions of this act, then, and in such case, the
department shall be permitted reasonable inspection of such premises for the
purpose of ascertaining whether there is any violation of the provisions
hereof.� If any such residential health care facility, boarding house or
rooming house, shall operate as a private mental hospital, convalescent home,
private nursing home or private hospital in violation of the provisions of this
act, then the same shall be liable to the penalties which are prescribed and
capable of being assessed against health care facilities pursuant to this act.

���� Any person, firm, association,
partnership or corporation, not licensed hereunder, but who holds out to the
public by advertising or other means that the medical and nursing care
contemplated by this act will be furnished to persons seeking admission as
patients, shall cease and desist from such practice and shall be liable to a
penalty
[
of
$100.00 for the first offense and $500.00 for each subsequent offense
]
in
accordance with section 13 or 14 of P.L.1971, c.136 (C.26:2H-13 or C.26:2H-14)
,
such penalty to be recovered as provided for herein.

(cf: P.L.2010, c.50, s.18)

���� 9.� Section 14 of P.L.1995,
c.133 (C.26:2H-18.59c) is amended to read as follows:

���� 14.� All acute care hospitals
licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et al.) shall submit to the
department all demographic and financial data specified in this section, in a
manner and time frame specified by the commissioner.�

���� a.� A hospital shall submit
demographic information about the persons who qualify for charity care or to
whom the hospital provides uncompensated care, which includes, at a minimum:�
the individual's age, sex, marital status, employment status, type of health
insurance coverage, if any, and if the individual is a child under 18 years of
age who does not have health insurance coverage or a married person who does
not have health insurance coverage, whether the child's parent or the married
person's spouse, as the case may be, has health insurance.

���� b.� A hospital shall submit
all financial data required by the department for the purposes of calculating
the payer mix factor as defined in sections 12 and 13 of P.L.1995, c.133
(C.26:2H-18.59a and C.26:2H-18.59b) and section 7 of P.L.1996, c.28 (C.26:2H-18.59e).

���� c.� A hospital which fails to
provide the information required pursuant to this section in a manner and time
frame specified by the commissioner, shall be liable to a civil penalty
[
not to exceed
$1,000
]
�

in accordance with section 13 or 14 of P.L.1971, c.136
(C.26:2H-13 or C.26:2H-14)
for each day in which the hospital
is not in compliance.� The commissioner shall recover the penalty in an
administrative proceeding held pursuant to the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.).�

����
d. �The Commissioner of
Health may make a determination that a hospital has substantial prior or
continuing violations of the provisions of this section.� In each case, the
determination shall be made at the discretion of the commissioner, who may
consider the following factors as material in each determination:

����
(1)�� the record of violations
by the hospital or the facility�s owners, including, without limitation, any
member, manager, partner, shareholder, trustee, trust beneficiary, corporate
officer or director, or any person holding a direct or indirect interest
through a trust, limited liability company, limited partnership, or corporation,
regardless of the percentage of ownership, controlling or not; and the record
of violations of other health care facilities within the same ownership system;

����
(2)�� the significance or
scale of the violations, including, but not limited to, whether the violations
risk life or safety or restrict access to care;

����
(3)�� the existence of
outstanding audits or failure to pay previous fines or penalties;

����
(4)
��
the existence of a record of conviction for any offense
related to healthcare fraud, patient abuse or neglect, bribery, embezzlement,
kickbacks, or financial crimes within the past 10 years by the facility�s
owners, including, without limitation, any member, manager, partner,
shareholder, trustee, trust beneficiary, corporate officer or director, or any
person holding a direct or indirect interest through a trust, limited liability
company, limited partnership, or corporation regardless of the percentage of
ownership, controlling or not;

����
(5)�� failure to respond to
a request from the Commissioner of Health to produce records, forms, or documents;
and

����
(6)�� submission of
falsified or altered records, forms, or documents.

����
e. If the Commissioner of
Health determines that a hospital has substantial prior or continuing
violations of the provisions of this section, the hospital shall be:

����
(1)� furnished with a
written notice stating that:

����
(a) the hospital has been
found to have substantial prior or continuing violations and the reasons
therefor; and

����
(b) the hospital shall be
required to submit a financial audit of the hospital and a comprehensive
improvement plan pursuant to paragraph (2) of this section; and

���� �
(2) required to submit to
the department, at the hospital�s expense, a third-party financial audit of the
hospital and a comprehensive improvement plan, which shall incorporate all of
the hospitals in the hospital�s health system, as applicable and shall be
approved by the department before implementation of the plan.� The plan shall
propose:

����
(a)�� cost containment
measures, which shall include an evaluation of how such measures will impact
the standard charges for items and services provided by each applicable
hospital;

����
(b)�� solutions to existing
disparities in the provision of health care services to medically underserved
groups, such as low-income persons, racial and ethnic minorities, immigrants,
and persons with disabilities; and

����
(c)�� a plan to
restructure the hospital�s health system such that all hospitals within the
system provide adequate services and access to care for the communities served
by the health system.

����
The hospital�s license
shall be made provisional and shall automatically convert to a full license to
operate in the State of New Jersey one year following the implementation of an
approved comprehensive improvement plan pursuant to this paragraph.

����
f.� As used in this
section, �health system� means an organization or group of entities, including
at least one hospital and one or more physician groups providing comprehensive,
coordinated care through shared ownership, joint management, or a common
governance structure.

(cf: P.L.1996, c.28, s.5)

���� 10.� (New section)� If a
hospital that receives a subsidy payment pursuant to P.L.1992, c.160
(C.26:2H-18.51 et al.) closes before June 30 of a given calendar year, the
hospital shall reimburse the State for any portion of the subsidy payment
covering the period following the closure date until June 30 of that calendar
year, calculated on a standard monthly basis. �If the hospital fails to
reimburse the State, in accordance with the provisions of N.J.A.C.8:31B-5.1 and
subject to the approval of the Commissioner of the Department of Health, the
State may elect to apply an offset to Medicaid payments to other hospitals
within the same hospital system, as defined by N.J.A.C. 8:33-1.3.

���� 11.� Section 14 of P.L.1992,
c.160 (C.26:2H-18.64) is amended to read as follows:

���� 14.� No hospital shall deny
any admission or appropriate service to a patient on the basis of that
patient's ability to pay or source of payment.�

���� A hospital which violates this
section shall be liable to a civil penalty
[
of
$10,000
]

for each violation
in accordance with section 13 or 14 of P.L.1971, c.136
(C.26:2H-13 or C.26:2H-14)
.� The penalty shall be sued for and
recovered pursuant to "the penalty enforcement law," N.J.S.2A:58-1 et
seq. and shall be deposited in the fund.�

(cf: P.L.1992, c.160, s.14)

���� 12.� Section 3 of P.L.1975, c.397
(C.26:2H-31) is amended to read as follows:

����
3.
� Any person who
violates the provisions of this act shall be liable for a penalty
[
of $100.00
]
in
accordance with section 13 or 14 of P.L.1971, c.136 (C.26:2H-13 or C.26:2H-14)

to be collected by a summary proceeding instituted by the Attorney General at
the request of the Commissioner of Health pursuant to the Penalty Enforcement
Law (N.J.S. 2A:58-1 et seq.).

(cf: P.L.1975, c.397, s. 3)

���� 13.� (New section)� a. As used
in the section:

���� "Commissioner" means
the Commissioner of Health.

���� "Department" means
the Department of Health.

���� "Hospital" means an
acute care hospital licensed by the Department of Health pursuant to P.L.1971,
c.136 (C.26:2H-1 et seq.).

���� b. The department shall
identify hospitals that may:

���� (1)�� be in acute financial
distress or at risk of filing for bankruptcy protection, including as provided
for in section 2 of P.L.2008, c.58 (C.26:2H-5.1a);

���� (2)�� have a condition or
conditions in substantial violation of the standards of health, safety, or
patient care established under federal or State law or regulations; or

���� (3)�� have a pattern and
practice of habitual violations of the standards of health, safety, or patient
care established under federal or State law or regulations.

���� c.� Upon finding that a
hospital suffers from the conditions set forth in paragraph (1) of subsection
b. of this section, the department shall, as appropriate:

���� (1)�� provide, at the
hospital�s expense, or direct such hospital to management support services and
resources, as well as any other supports as may be necessary and appropriate to
avoid bankruptcy proceedings or cessation of operations;

���� (2)�� if the hospital does not
take sufficient and timely action to avoid an impending bankruptcy or closure,
and if the department finds the bankruptcy or closure would have a significant
adverse effect on the health, safety, and welfare of the patients of the
hospital or would leave the area in which the hospital is located lacking
sufficient services after assessing the need for and availability of other
hospitals in the area, initiate proceedings in a court of competent
jurisdiction for the appointment of a receiver for the hospital; and

���� (3)�� take such other steps
and actions as may be available to ensure continuity of care for, and the
safety of, patients of the hospital.

���� d.� Upon finding that a
hospital suffers from the conditions set forth in paragraph (2) or (3) of
subsection b. of this section, the department shall, as appropriate:

���� (1)�� initiate proceedings in
a court of competent jurisdiction for the appointment of a receiver for the
hospital for the purposes of remedying a condition or conditions of a hospital
in substantial violation of the standards of health, safety or patient care
established under federal or State law or regulations or of remedying a pattern
and practice of habitual violations of the standards of health, safety or
patient care established under federal or State law; and

���� (2)�� take such other steps
and actions as may be available to ensure continuity of care for, and the
safety of, patients of the hospital.

���� e.� A receiver appointed
pursuant to subsection c. or d. of this section shall have the powers and
authorities conferred by the order of receivership, which may include, but
shall not be limited to, the authority to:

���� (1)�� hire any consultants or
to undertake any studies of the hospital that the receiver deems appropriate;

���� (2)�� make any repairs or
improvements as are necessary to ensure the safety of hospital patients and
staff;

���� (3)�� hire or discharge any
employees, including the administrator or manager of the hospital;

���� (4)�� receive or expend in a
reasonable and prudent manner the revenues of the hospital due on the date of
the entry of the order of receivership and to become due under such order;

���� (5)�� continue the business of
the hospital and the care of the patients of the hospital in all its aspects;

���� (6)�� do all acts necessary or
appropriate to conserve the property and promote the health, safety, and
welfare of the patients of the hospital; and

���� (7)�� exercise such other
powers as the receiver deems necessary or appropriate to implement the court
order.

���� f.� A receiver appointed
pursuant to this section may, in the receiver�s discretion, either

���� (1)�� assume the role of
administrator or manager and take control of all day-to-day operations; or

���� (2)�� direct the administrator
or manager on actions and procedures to be taken to eliminate or rectify the
conditions specified in the complaint.

���� g.��� A complaint filed
pursuant to subsection c. or d. of this section shall:

���� (1)�� set forth material facts
showing that there exists in the hospital a condition or conditions set forth
in paragraphs (1), (2), or (3) of subsection b. of this section.

���� (2)�� set forth that the facts
set forth pursuant to paragraph (1) of this subsection have been brought to the
attention of the owner and licensee of the hospital and that the condition or
conditions have not been remedied within a reasonable period of time or that
the condition or conditions although periodically remedied habitually exists in
the hospital as pattern and practice;

���� (3)�� set forth a brief
description of what is necessary to remedy the condition and an estimate of the
cost thereof; and

���� (4)�� state the relief sought.

���� 14. �This act shall take
effect immediately and the provisions of section 4 shall apply to certificate
of need applications that have been filed on or after the effective date of
this act.

STATEMENT

���� This bill revises the
regulation of health care facilities.

���� The bill permits the
Commissioner of Health (commissioner) to debar health care facilities or
individuals from receiving a certificate of need.� Under the bill, the
commissioner is to be permitted to debar a health care facility or any
individual in the ownership structure of a health care facility that is
licensed under the "Health Care Facilities Planning Act"(act) from
eligibility for a certificate of need after a determination that the health care
facility has substantial prior or continuing violations of the act or
certificate of need requirements. In each case, the decision to debar is to be
made at the discretion of the commissioner of who may consider certain factors
as material in each decision to debar as outlined under the bill.� Under the
bill, if the commissioner debars a health care facility or individual, the
health care facility or individual is to be furnished with a written notice
stating that:� debarment has been imposed, the date on which debarment becomes
effective, and the reasons therefor; and if the health care facility or
individual chooses to appeal the debarment, the health care facility or
individual is to submit the appeal to the Department of Health. If the
commissioner receives a request for appeal of debarment, the commissioner is to
refer the matter to the Office of Administrative Law for adjudication.� If a
hospital is debarred, the license of any other associated health care facility
within the hospital�s health system would be made provisional, pending the
competition of a financial audit and the implementation of a comprehensive
improvement plan.

���� This bill increases various
penalties imposed by the Department of Health (department) for certain health
care facilities.� Under the bill, various penalties imposed by the department
are to increase to $12,500 for the first offense and $25,000 for subsequent
offenses.� The bill provides that the department shall by regulation increase
the penalties as authorized by the bill. �However, an increase in such
penalties is not to exceed the cumulative annual percentage increase in the
Consumer Price Index for the five fiscal years prior to the date of the proposed
penalty increase.

���� Certain provisions of the bill
are applicable to the regulation of hospitals.� The bill prohibits the
Department of Health (DOH) from issuing a certificate of need for the
construction or expansion of a hospital if the proposed site of the hospital
will be leased from a health care real estate investment trust (REIT). The bill
provides an exemption for existing facilities that lease property from a health
care REIT, and allows the Commissioner of Health to waive the prohibition for
satellite facilities that provide outpatient services.

���� This bill provides for the
receivership and imposition of enforcement remedies of hospitals under certain
circumstances.

���� The bill revises current law
to provide that the commissioner may seek certain injunctive relief in order to
compel compliance with certain provisions of current law.

���� The bill establishes certain
requirements for hospitals to complete a financial audit and implement a comprehensive
improvement plan approved by DOH if the hospital violates certain reporting
requirements provided by current law.

���� The bill provides that if a
hospital that receives a subsidy payment closes before June 30 of a given
calendar year, the hospital will be required to reimburse the State for a
certain portion of the subsidy payment.� If the hospital fails to reimburse the
State, the State may elect to apply an offset to Medicaid payments to other
hospitals within the same hospital system as applicable.

���� Under the bill, the department
will identify hospitals that may: be in acute financial distress or at risk of
filing for bankruptcy protection; have a condition or conditions in substantial
violation of the standards of health, safety, or patient care established under
federal or State law or regulations; or have a pattern and practice of habitual
violations of the standards of health, safety, or patient care established
under federal or State law or regulations.

���� If the department identifies
any of these conditions by filing a complaint pursuant to the bill, the
department may:

���� 1) provide, at the hospital�s
expense, or direct such hospital to management support services and resources,
as well as any other supports as may be necessary and appropriate to avoid
bankruptcy proceedings or cessation of operations;

���� (2) initiate proceedings in a
court of competent jurisdiction for the appointment of a receiver for the
hospital; and

���� (3) take such other steps and
actions as may be available to ensure continuity of care for, and the safety
of, patients of the hospital.

���� The bill outlines the powers
and authorities provided to a receiver appointed pursuant to the bill.