Creates voluntary pilot program to allow certain facilities flexibility in their psychiatric bed status.

A5223 FISCAL ESTIMATE

LEGISLATIVE FISCAL ESTIMATE

ASSEMBLY, No. 5223

STATE OF NEW JERSEY

222nd LEGISLATURE

DATED: JULY 1, 2026

SUMMARY

Synopsis:

Creates voluntary pilot program to allow certain
facilities flexibility in their psychiatric bed status.

Type of Impact:

Time-limited State expenditure increase and revenue
decrease; time-limited potential expenditure decrease for University Hospital
and Bergen New Bridge Medical Center.

Agencies Affected:

Department of Health, University Hospital, Bergen New
Bridge Medical Center.

Office of
Legislative Services Estimate

Time-Limited Fiscal Impact

State Expenditure Increase

Indeterminate

State Revenue Decrease

Indeterminate

Potential University Hospital, Bergen New Bridge
Medical Center Cost Savings

Indeterminate

�

The Office of Legislative Services (OLS) determines that the
Department of Health would incur additional administrative costs to develop and
issue a survey to all facilities that participated in the pilot program
established under the bill, and compile the survey results and recommendations
concerning the continuation of the pilot program into a report for the Governor
and the Legislature.

�

The magnitude of the department�s increased administrative costs
will largely depend on the number of general hospitals, psychiatric facilities,
or special psychiatric hospitals that participate in the pilot.�

�

State revenues, in the form of licensure and certificate of need
fees paid by hospitals and psychiatric facilities for departmental reviews,
will decrease under the bill, albeit by an indeterminate amount.� Because the
OLS cannot anticipate the number of hospitals and psychiatric facilities that
may temporarily convert adult acute psychiatric beds to adult closed acute
psychiatric beds for involuntarily committed patients, the office lacks the
informational basis to determine the magnitude of the revenue decrease.

�

To the extent that University Hospital, an independent non-profit
legal entity that is an instrumentality of the State located in Newark; and
Bergen New Bridge Medical Center (formerly the Bergen Regional Medical Center),
a county-owned entity in Paramus, are able to temporarily utilize adult acute
psychiatric beds as adult closed acute psychiatric beds without paying the
requisite Certificate of Need and licensure fees to the department, both
facilities may realize an indeterminate amount of cost savings.

BILL DESCRIPTION

����� The bill creates a voluntary pilot program to allow
licensed inpatient psychiatric facilities to temporarily use existing adult
acute psychiatric beds as adult closed acute psychiatric beds.� The use of such
beds would not constitute a change in the facility�s licensed bed capacity,
require approval by the Department of Health, or require a change to the
facility�s licensure status.� The program would run for 24 months, but the
Commissioner of Health may recommend legislative action to extend or make permanent
the program.� A list of participating facilities would be published on the
department�s Internet website for the duration of the pilot program.

����� This bill also requires each participating facility to
submit a quarterly report to the department, detailing: (1) the patient type
for whom the flexibility was temporarily utilized; (2) the duration of the
utilization; and (3) the number of instances in which a psychiatric inpatient
bed was converted.� The reports are required to be made public within 60 days
of submission to the department.� Within 90 days of the end of the pilot
program, the commissioner would be required to submit a report to the Governor
and the Legislature regarding the pilot program and whether the program should
be continued or made permanent.

FISCAL ANALYSIS

EXECUTIVE BRANCH

����� None received.

OFFICE OF LEGISLATIVE SERVICES

����� The OLS determines that the Department of Health would
incur marginal administrative costs to develop and issue a survey to all
facilities that participated in the pilot program established under the bill,
and compile the survey results and recommendations concerning the continuation
of the pilot program into a report for the Governor and the Legislature.� The
magnitude of the department�s increased administrative costs will largely
depend on the number of general hospitals, psychiatric facilities, or special
psychiatric hospitals that participate in the pilot.�

����� The OLS concludes that the department will utilize
existing resources to promulgate regulations governing the pilot program,
review the quarterly reports submitted by each participating facility
concerning the circumstances under which the facility temporarily used adult
acute psychiatric beds as adult closed acute psychiatric beds, and to publish a
list of participating facilities on the department�s website for the duration
of the pilot program.

����� State revenues, in the form of fees paid by the
hospitals and psychiatric facilities for departmental certificate of need
reviews, will decrease under the bill, albeit by an indeterminate amount.�
Because the OLS cannot anticipate the number of hospitals and psychiatric
facilities that may temporarily convert adult acute psychiatric beds to adult
closed acute psychiatric beds for involuntarily committed patients, the office
lacks the informational basis to determine the magnitude of the revenue
decrease.�

����� Currently, general hospitals, psychiatric facilities,
and special psychiatric hospitals are required to submit both a license
amendment and a certificate of need application, and the related fees, to the
department in order to change the facility�s licensed bed capacity by adding
new closed adult psychiatric beds.� Facilities seeking to temporarily add adult
acute closed psychiatric beds are required to apply for a temporary license
from the department, at a cost of $3,000, and apply for an Expedited Certificate
of Need Review from the department, at a cost of $7,500.�

����� To the extent that University Hospital, an independent
non-profit legal entity that is an instrumentality of the State located in
Newark; and Bergen New Bridge Medical Center (formerly the Bergen Regional
Medical Center), a county-owned entity in Paramus, are able to temporarily
utilize adult acute psychiatric beds as adult closed acute psychiatric beds
without paying the requisite Certificate of Need and licensure fees to the
department, both facilities may realize marginal savings.

Section:

Human Services

Analyst:

Anne Cappabianca

Senior Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

This legislative fiscal estimate has been produced by the
Office of Legislative Services due to the failure of the Executive Branch to
respond to our request for a fiscal note.

This fiscal estimate has been prepared pursuant to P.L.1980,
c.67 (C.52:13B-6 et seq.).