Betsy Ryan is president and CEO of the New Jersey Hospital Association. Her blog, Healthcare Matters, examines the many issues confronting New Jersey's hospitals and their patients. Readers are encouraged to join the discussion, because healthcare matters - to all of us.

Time for Legislation, Not Litigation

In one year since the Morristown Memorial tax court decision was announced on June, 25, 2015, 30 lawsuits representing more than half of the state’s 58 non-profit hospitals have arisen across the state pitting municipalities against their not-for-profit hospitals. While not particularly surprising, this is an unfortunate response. Over the years, hospitals and municipalities have had a strong history of working together as good partners and it is a shame that these mounting lawsuits are eating away and placing stress on these otherwise successful and cooperative working relationships.

The initial response by members of the New Jersey Legislature following the court decision was to introduce a bill to provide consistency and certainty for both hospitals and municipalities. The bill was pocket-vetoed by the Governor, who instead called for a two-year freeze on any property tax liability and a commission to study the 70-year statute that was the basis for the original dispute and offer a solution. Since January, there have been a few bills introduced but no formal action has been taken on any of them.

Instead of endless litigation, what is needed is a thoughtful legislative approach that would create a sound statewide policy allowing hospital contributions to flow to their towns much faster than disjointed, drawn-out legal battles. We urge the Legislature to pass a bill that quells the legal uncertainty for not-for-profit hospitals and ensures a balanced statewide solution.

Make no mistake, hospitals are more than willing to contribute to their towns for the municipal services they use. The hospital community supported the bill in the lame-duck session of the Legislature that would have provided $25 million in hospital financial support to their communities.

Today, hospitals support bill A-3635/S-2329 sponsored by Assemblyman Herb Conaway and Senator Nilsa Cruz-Perez. This bill provides an opportunity for thoughtful discussion while placing a moratorium on the lawsuits that could cost towns and hospitals millions to litigate and years to resolve. Specifically, it would create a “Non-Profit Hospital Property Tax Exemption Study Commission” that would meet over a two-year period to develop and recommend a sound statewide policy approach. We’ve even offered compromise language that would have hospitals contribute a reasonable amount to their municipality while the study commission does its work.

A second bill S-2212/A-3888, introduced by Sen. Bob Singer (R-Ocean), would protect the legality of PILOT agreements – or Payments in Lieu of Taxes – between hospitals and their host municipalities. The hospital community also supports that measure.

The Morristown case that initially spurred this issue was seven years in the making. It’s wise to take some time as presented in bill A-3635/S-2329 to get this right and arrive at a sound solution that will help municipalities and tax payers without threatening the viability of hospitals and the healthcare services they provide to our communities.

With time ticking away, it is inevitable that more municipal lawsuits will be added to the already substantial list. This patchwork of litigation offers no guarantee of consistency or equality for individual municipalities or the hospitals, and perpetuates an ongoing cycle of lawsuits that will take years to resolve and cost millions to litigate.

While supporting new legislation and agreeing to pay their fair share, it is important to note that New Jersey’s non-profit hospitals already contribute significantly to municipalities and the state, as reported by EY (formerly Ernst & Young LLP). These hospitals deliver care 24/7, provide $2.4 billion in community benefit and serve as prime drivers of economic activity within their communities – employing nearly 144,000 people whose wages and tax contributions ripple throughout the economy. Charity care services to the poor and uninsured alone total about $1 billion annually.

This group of not-for-profit hospitals that have been exempt from property taxes in New Jersey since laws were enacted in 1913 have already volunteered in a unified manner many months ago to contribute additional funds to their municipalities to support essential functions and provide local property tax relief. In return, the only thing requested by the hospitals was to preserve their current property tax exemptions and provide them relief from litigation.

So, I return to my call for legislation versus litigation. We support bill A-3635/S-2329 that addresses the needs of municipalities, while providing certainty to our hospitals. We urge action on this legislation and re-affirm that our members are committed to doing their share to support their municipalities, while continuing to serve as good neighbors and answering the needs of their patients.

Written by Betsy Ryan at 00:00

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For Hospital Week, a Profound Appreciation

I’ve worked in healthcare for most of my career, but recently I viewed my local hospital from a new perspective – as a patient during a 13-day hospital stay.

It was scary and sometimes confusing. But it was also profound. I don’t think I’ve ever been more grateful for a group of compassionate caregivers, a team of skilled physicians and all of the employees, from food service workers to the housekeeping team who always had a kind word. I also was amazed by my firsthand view of modern medical technology – and very, very appreciative that it’s here for us in New Jersey hospitals.

As we celebrate National Hospital Week this week (May 8-14), I hope you’ll join me in saying thank you to our hospital professionals who are there to care for us 24-hours a day, every day of the year. New Jersey is fortunate to have 111 acute care and specialty hospitals that employ 141,000 dedicated individuals.

I know our healthcare system isn’t perfect. But it sure is reassuring to me, and families across our state, to know that our community hospitals are always there for us.

Written by Betsy Ryan at 00:00

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South Jersey Healthcare Community Seeks to Transform Behavioral Health Care

There is some exciting and innovative work being done in South Jersey by the region’s five healthcare systems – Cooper University Healthcare, Inspira Health Network, Kennedy Health, Lourdes Health System and Virtua.

These healthcare leaders – otherwise fierce competitors – have come together to address a need for better care for those confronting mental health or substance use issues.

Called the South Jersey Behavioral Health Innovation Collaborative, this unique partnership also includes NJHA and the Camden Coalition of Healthcare Providers.

This collaborative was born from information in the community health needs assessments that hospitals regularly perform to examine the most pressing healthcare needs facing their local area. The gaps identified in those assessments focused hospital leadership on systemic problems that made it difficult for residents to access the behavioral health and substance abuse services they needed. The results included poor outcomes for these individuals, lots of return visits to the hospital emergency room and high healthcare costs. I applaud the five CEOs who put competitive issues aside and came together to address these regional findings.

The project started one year ago, and recently we gathered to share the findings from our first year of data collection, mined by the Camden Coalition through an extensive process. We found that ED visits for behavioral health or substance abuse needs increased 30 percent between 2010 and 2014. We also found 800 individuals who had visited all five health systems, and an overwhelming majority had at least one mental health or substance use disorder. Together, those patients logged more than 31,000 hospital visits with more than $260 million in charges. That shows the power of data in identifying problems and designing solutions.

There’s been a great deal of progress in a short period of time. The collaborative’s partners and their dedicated teams are working together to share protocols and data for the greater good of the patient. They are conferencing together on patient cases for individuals that commonly visit multiple hospitals. They’re integrating psychiatric specialists in their EDs. And moving forward, they are offering supportive needs like stable housing and exploring a regional site for psychiatric emergency services.

This project shows the power of collaboration in today’s complex healthcare system, and it highlights the commitment of our members in doing what is best for their patients and their communities. 

Written by Betsy Ryan at 00:00

The Right Step: Governor Calls for Increased Funds for Behavioral Health and Substance Abuse Services

All eyes and ears were on Governor Christie Tuesday as he delivered his annual State of the State address. He covered a lot of ground in his remarks, but for a large population in need in our state, no section was more important than the Governor’s call for greater funding for behavioral health and substance abuse treatment.

The Governor said he will budget a $100 million increase in Medicaid payments for healthcare providers that provide mental health and addiction services. It is welcome news for our healthcare providers. Medicaid traditionally has had very low reimbursement rates – so much so that it can sometimes be difficult locating a provider that accepts Medicaid cases. This infusion of state funds will allow providers to increase access to these essential services.

Some of the money will be earmarked for Medicaid accountable care organizations. Their mission is to identify those individuals who are high-frequency/high-cost users of services. Finding them proactively and giving them care in the right setting will help us avoid what is all-too-often the current practice – episodic care in hospital EDs.

This is one of the times where the right policy approach is also the right human approach. We applaud the Governor for this important step.

Written by Betsy Ryan at 00:00

Why We Support Community Contribution Fee for Hospitals

The recent Morristown Memorial tax court decision in June created a great deal of uncertainty for hospitals, municipalities and, in fact, for nonprofit entities all across New Jersey. While not binding statewide, the ruling for the first time stated that part of a not-for-profit hospital was subject to local property taxes. Perhaps anticipating the hubbub his ruling would spark, Judge Vito Bianco acknowledged the issue might require a statewide legislative solution.

A solution – and we believe a very good one – is progressing through the New Jersey Legislature. S-3299/A-4903, introduced by Senate President Stephen Sweeney and Sens. Robert Singer and Joe Vitale, along with Assemblyman John Burzichelli, would establish a community contribution fee from not-for-profit hospitals that would flow to their host municipalities. The proposal provides an equitable statewide solution. Without it, the tax court ruling is likely to lead to a flurry of lawsuits involving lengthy and expensive litigation throughout the state.

To be clear, not-for-profit hospitals are entities that do not have owners or shareholders. They are led by a board of community volunteers, where any positive margins from their operations are reinvested back into the organization to serve the healthcare mission. Not-for-profit hospitals have been exempt from property taxes in New Jersey since laws were enacted in 1913. Our member hospitals are valued parts of their communities, always there to provide healthcare services to all who need them, as well as providing jobs and added community benefits that help keep local economies healthy. Recognizing this, NJHA convened a task force comprised of members of New Jersey’s not-for-profit hospitals who agreed to support legislation that contributed a reasonable amount of money, along with their existing community benefit contributions, to offset the costs of local services provided by their host municipalities.

S-3299/A-4903, which received unanimous support from the NJHA task force and our Board of Trustees, reaffirms the property tax exemption of New Jersey’s not-for-profit hospitals while creating a way for these hospitals to provide even greater support to their host municipalities. The legislation extends not-for-profit hospitals’ contributions by providing host municipalities with a community contribution fee that will raise roughly $20 to $25 million annually statewide – in addition to the local property taxes that not-for-profit hospitals already pay when leasing space like medical office buildings and other retail space. The new money is earmarked for municipalities’ public safety expenditures.

For hospitals, the commitment to community goes well beyond healthcare services. The accounting firm EY (formerly Ernst & Young) recently completed a study for NJHA, calculating that our hospitals provide more than $2.4 billion in community benefits annually. These contributions include free and discounted care for the poor, uninsured and senior citizens; community health offerings like immunization clinics and other wellness programs; education for future healthcare professionals; medical research; and a wide array of additional community programs. In one community I know, the local hospital has donated parcels of land for public use; others have donated Narcan to their local police departments to help prevent opioid overdoses. Charity care services alone – delivered to New Jersey residents who have no health insurance – total about $1 billion annually. And that charity care will continue uninterrupted, no matter what happens with this bill. That’s an obligation already written in state law – not to mention a key part of the mission of not-for profit hospitals.

This bill represents an extension of our hospitals’ longstanding commitments to the communities they serve, while providing certainty and predictability during one of the most dynamic periods of change ever experienced in our nation’s healthcare sector.

In addition to community benefits, not-for-profit hospitals are also prime drivers of economic activity within their communities, employing nearly 144,000 people whose wages and tax contributions ripple throughout the economy.

New Jersey’s hospitals are committed to doing their share to support their municipalities, while continuing to serve as good neighbors and answering the needs of their patients.  We urge the Legislature to pass S-3299/A-4903 and ask Governor Christie to sign this bill which will quell the legal uncertainty and ensure a balanced statewide solution. 

Written by Betsy Ryan at 00:00

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