New Jersey § 26:2h-18

§ 26:2h-18.

The Legislature finds and declares that: a. It is of paramount public interest for the State to take all necessary and appropriate

actions to ensure access to and the provision of high quality and cost-effective hospital

care to its citizens. b. The highly regulated system under which acute care hospitals have been forced to

operate in New Jersey since the enactment of P.L.1978, c. 83 was intended to control

health care costs and promote the efficient and effective delivery of health care;

however, because health care costs have continued to increase at an alarming rate,

the State clearly needs to eliminate the current Diagnosis Related Group (DRG) rate

setting methodology it initiated in 1980 and move in the direction of a deregulated

hospital reimbursement system which will provide hospitals with a truly competitive

market environment and strong incentives to offer only those services which meet the

demands of health care purchasers and consumers. c. Access to quality health care shall not be denied to residents of this State because

of their inability to pay for the care; there are many residents of this State who

cannot afford to pay for needed hospital care and in order to ensure that these persons

have equal access to hospital care, it is necessary to provide disproportionate share

hospitals with a charity care subsidy supported by a broad-based funding mechanism. d. In order to provide financial support to those hospitals with a disproportionately

large number of Medicare patients, it is also necessary to provide for a Medicare

hospital subsidy, also supported by a broad-based funding mechanism, as a temporary

means to distribute payments to disproportionate share hospitals which experience

a significant shortfall in their revenues due to the difference between the hospital's

actual rates for health care services and the rates paid by the Medicare program for

those services. e. There is a need to continue this State's current system of providing disproportionate

share payments to hospitals in the State, and in order to ensure continuity of these

payments, this act establishes the Health Care Subsidy Fund. f. In order to ensure a smooth transition to a new, deregulated hospital reimbursement

system that significantly alters the State's policy towards the delivery of health

care, it is necessary to establish an independent commission which is not tied to

past practices of hospital rate regulation.