Bill to permit fee on hospital revenues advances

TRENTON – Senate lawmakers hosted a lengthy debate Thursday over whether hospitals in certain areas of the state should be charged by some cities and counties to raise more revenues for themselves and for the state’s share of Medicaid funding.

The bill, S2466, would permit local governments to levy a fee on hospital revenues in five cities and two counties, as part of a five-year “local hospital fee” pilot program.

The bill cleared the Senate Health, Human Services and Senior Services Committee following lengthy debate and largely along party lines.

The cities would keep a portion of the revenues and the other portion would be given to the state in the form of intergovernmental transfers (IGTs) to the state Department of Human Services, which runs the Medicaid program. A greater share of state Medicaid funds means a larger chunk of federal dollars, given the fixed ratio, according to the bill.

The places where the pilot program would be in effect are Newark, Jersey City, New Brunswick, Trenton, Camden, and the counties of Passaic and Atlantic. All of them fulfill the conditions outlined in the bill for eligibility in the program.  All of those cities serve a disproportionately large amount of patients who receive Medicaid or Charity Care services.

Proponents argued the proposal is necessary to keep up with the rising cost of caring for New Jersey’s poor residents.

Opponents to the bill argued the legislation lacks transparency and answers to fundamental questions, such as the cost of the exact tax. Since the decision to levy a hospital fee would rest with local governments, opponents argued, who will tax what amount?

The bill moves to the Senate Budget Committee.

Bill to permit fee on hospital revenues advances