Read the full stored bill text
S4291
SENATE, No. 4291
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED MAY 14, 2026
Sponsored by:
Senator� RAJ MUKHERJI
District 32 (Hudson)
SYNOPSIS
���� Establishes process to judicially appoint receiver to
administer closed hospital.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
concerning hospital closures, and supplementing
Title 26 of the Revised Statutes.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1. a. The Legislature finds
and declares that:
���� (1) Many residents of New
Jersey living in urban areas receive their health care at acute care general
hospitals located in their community. �Their life, safety, health, and welfare
is largely dependent upon that care remaining affordable and accessible at such
facilities.
���� (2) The certificate of need
(CN) process is designed to protect the role that urban hospitals play in the
Statewide health care system, and to guard against the closing of such
facilities and the transfer of services in a manner which is harmful to the
public interest.
���� (3) Pursuant to State law and
Department of Health regulations, if the Commissioner of Health determines that
a hospital is in financial distress, the commissioner may appoint a monitor to
assist in resolving such distress through methods including, but not limited
to, the provision of State stabilization grants in extraordinary
circumstances.� However, the voluntary closure of a hospital requires a full
review through the CN process.
���� (4) Nevertheless, it is
necessary in order to protect the public welfare and the health care services
of residents of such urban communities to establish a summary statutory
procedure in the event that the licensee of an acute care general hospital
closes such facility or discontinues an essential service provided at such
facility in violation of the CN requirement.
���� b. As used in this section:
���� (1) �Commissioner� has the
definition set forth in section 2 of P.L.1971, c.136 (C.26:2H-2).
���� (2) �Department� has the
definition set forth in section 2 of P.L.1971, c.136 (C.26:2H-2).
���� (3) �Health care service� has
the definition set forth in section 2 of P.L.1971, c.136 (C.26:2H-2).
���� (4) �Licensee� means the
holder or holders of a license to operate a general hospital pursuant to
P.L.1971, c.136 (C.26:2H-1 et seq.).
���� (5) �Person� means an
individual, corporation, company, association, society, firm, limited liability
company, limited liability partnership, partnership, joint stock company, or
any other legal entity, however organized.
���� c. Whenever the Commissioner
finds that a general hospital has closed without first having obtained a
certificate of need authorizing the closure, or is in imminent threat of
closure but has not applied for a certificate of need to authorize closure, the
Commissioner shall notify the Attorney General and the governing body of the
municipality in which the hospital is located.�
���� Upon such finding and notice,
the Department, the Attorney General, or the municipality shall each have
standing to bring a civil action in the Superior Court for an order directing
the appointment of a receiver to maintain the operation of the hospital and all
health care services being provided at such hospital.� If the action is not
brought by the Department, the Department shall be served with a copy of the
complaint.� An action brought pursuant to this subsection shall be heard by the
court within three days.
���� d. A complaint filed pursuant
to subsection c. of this section shall:
���� (1) Set forth all material
facts showing that the licensee has closed or imminently threatens to close the
hospital, or has discontinued essential health care services, without filing an
application for a certificate of need or without completing the certificate of
need process;
���� (2) Certify that the facts set
forth pursuant to paragraph (1) of this subsection have been brought to the
attention of the licensee and all persons with a financial interest in the
hospital, but the health care services have not been restored;
���� (3) Set forth a brief
description of what is necessary to reopen or prevent the closure of the
hospital, together with an estimate of the costs required; and
���� (4) State the relief sought,
including, but not limited to, the appointment of a receiver.
���� e. It shall be an affirmative
defense to a complaint filed pursuant to subsection c. of this section that the
licensee has filed an application for a certificate of need, and has restored
all previously discontinued health care services pending a determination by the
Commissioner.
���� f. Upon a finding of the need
for emergent relief, the court may appoint a receiver to immediately assume the
powers set forth in subsections g. and h. of this section.� The receiver shall
be a person approved by the Department, except that no person who holds a
financial interest in the licensee, or any family member of such person, shall
be appointed as the receiver.
���� g. The receiver, upon
appointment, may either assume the role of the administrator or manager of the
licensee and take control of all operations, or direct the current
administrator or manager to restore and maintain all previously discontinued
health care services.� The receiver is authorized to continue the business of
the hospital and maintain the care of its patients in all aspects, and to do
all acts necessary or appropriate to conserve the property and assets of the
hospital, to promote the health, safety, and welfare of its patients, and to
implement the orders of the court.� If the receiver determines that the
hospital is in financial distress which may necessitate closure, the receiver
shall file an application for a certificate of need with the Department.
���� h. The court shall allow from
the revenues of the hospital a reasonable amount of compensation for the
services and expenditures of the receiver appointed pursuant to this section.�
The receiver may be required to furnish a bond in an amount and form as
directed by the court.� The cost of such bond shall be paid jointly and
severally by such persons found to have caused the licensee to violate any
requirements concerning the certificate of need.
���� 2. This act shall take effect
immediately.
STATEMENT
���� This bill establishes a
procedure for the Superior Court to appoint a receiver to administer a hospital
that has closed or is in imminent threat of closure.
���� Under current law,
N.J.S.A.26:2H-5.1a and 26:2H-5.1b, if the Commissioner of Health determines
that a hospital is in financial distress, the commissioner may appoint a
monitor to assist in resolving the financial difficulties.� Current law also
allows the commissioner, under N.J.S.A.26:2H-18.77, to award State grants to a
hospital where extraordinary circumstances threaten access to essential health
services for residents in a community.� Furthermore, under N.J.A.C.8:33-3.2 of
the Department of Health regulations, a hospital undergoing voluntary closure
must apply for a certificate of need (CN), which must be approved by the
department.
���� Under the bill, if a hospital
closes without going through the CN process, or if a hospital is in imminent
threat of closure but has not applied for a CN, the Department, the Attorney
General, or the municipality in which the hospital is located may file an
action in the Superior Court for the appointment of a receiver to maintain
hospital operations.� An action filed pursuant to the bill is required to set
forth the facts concerning the hospital�s closure, certify that the owners of
the hospital have been notified but either have not restored services or have
not complied with the CN process, and set forth a description of what is
necessary to keep the hospital open.� It is an affirmative defense that the
hospital owner has in fact filed an application for a CN, and has restored
services pending further action by the Department.
���� Under the bill, if a receiver
is appointed, the receiver may immediately assume all administrative control
directly, or allow the hospital�s existing administration to continue to
function.� The receiver will be empowered to exercise all powers necessary and
appropriate to maintain hospital function and patient care, and to implement
the orders of the court.� The bill provides that the receiver must be a person
approved by the Department, but may not be a person with a financial interest
in the hospital or the family member of such a person.� Finally, the bill
provides for the receiver to receive reasonable compensation from hospital
revenues, and may require the receiver to furnish a bond.