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Hospital Charity Care Case in Limbo

As reported by the Courier-Post, the constitutional challenge raised by eight rural New Jersey hospitals remains unresolved after a New Jersey appeals court refused to hear the hospital’s challenge to the state’s “charity care” requirement. In declining to hear the case, the appellate court recommended that the hospitals file their challenge in a lower court. The hospitals’ claimed that New Jersey’s “charity care” requirements amounted to an unconstitutional taking of their property because the state did not adequately pay the hospitals for the true cost of the program.

What is “Charity Care?”

In this report, “charity care” refers to the requirement that hospitals provide necessary medical care to patients regardless of the patient’s ability to pay for the treatment or procedures. New Jersey allots several hundred million dollars per year to help offset the costs of providing such care. However, the plaintiff-hospitals claimed that the amount of funds they receive from the state legislature is insufficient to cover the actual cost of providing such care. The eight hospitals (all rural New Jersey hospitals) claimed they lost between $1 million and $16 million each during fiscal year 2015 by providing “charity care.” While a larger hospital may be able to absorb the costs of providing charity care, rural hospitals have less resources to absorb the burden.

What a Win for the Hospitals Could Have Meant for Patients

A “win” for the hospitals could have had dramatic repercussions for sick or injured patients needing medical treatment but who did not have the resources or insurance to pay for such treatment. If the hospitals’ suit was successful, a hospital could potentially deny service to a patient who was not able to pay for treatment where the hospital had not received sufficient funds (or exhausted the funds it had received) to provide such treatment. This could create a potentially deadly delay in receiving treatment for the patient. Alternatively, the quality of care a patient might receive if he or she was incapable of providing treatment may have been permitted to be less than the quality of care a paying patient or insured patient would receive. This result (however unlikely) would have been devastating to the health of uninsured or poor patients and would have left them (and their families) with little legal recourse.

Where the Appellate Court’s Decision Leaves Things

The hospital’s first brought its challenge before the Department of Health, but the Department of Health determined it lacked jurisdiction to hear the challenge and sent the matter to the appellate court. The appellate court then found that it did not have sufficient facts in the appellate record to determine the constitutional issue and recommended the hospitals file their claim in a trial court. So while the hospitals’ constitutional challenge remains unresolved right now, it may not remain so.

Cohen, Placitella & Roth, P.C. is a New Jersey medical malpractice law firm that assists injured patients recover compensation because of failures to diagnose and other medical errors. Contact our firm by phone or using our online contact form to discuss your medical malpractice case.

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