New Jersey § 26:2h-5

§ 26:2h-5.

a. The Commissioner of Health shall prescribe, by regulation: (1) specific indicators

by which a general hospital may be evaluated for financial soundness, and the thresholds

at which it may be considered to be in financial distress or at risk of being in financial

distress; and (2) the progressive levels of monitoring and department participation

in the development and oversight of corrective measures to resolve a general hospital's

financial or potential financial difficulties, including the various levels of involvement

by an appointed monitor. The indicators and progressive levels of monitoring and intervention shall be guided

by the indicators and levels of monitoring and intervention identified in the final

report of the New Jersey Commission on Rationalizing Health Care Resources, issued

on January 24, 2008. b. The thresholds of specified financial indicators and corresponding Department of

Health involvement that may be triggered by them shall include, but are not limited

to, measures relating to: (1) days cash-on-hand; (2) average daily census ; (3) days in accounts receivable; (4) average payment period; (5) operating margin; (6) operating margin adjusted to account for fees, allocations, and other business interactions

with interested persons as those terms are defined in IRS Form 990, with the term

“ interested person ” to include owners for the purposes of a for-profit hospital ; and (7) any other factor which the commissioner deems appropriate, including failure to

provide required or requested financial information. c. If the commissioner determines that a hospital is in financial distress or at risk

of being in financial distress after considering the specified financial indicators

set forth in subsection b. of this section and any additional financial indicators

as the commissioner specifies by regulation, then the commissioner may provide notice of the hospital's financial state to the mayor, city administrator,

and members of the Legislature who represent the municipality in which the hospital

is located. The commissioner may appoint, in consultation with the hospital, a monitor to prevent further financial

deterioration , in which case the commissioner, within 30 days of making the appointment, shall

provide notice of the appointment of the monitor to the mayor, city administrator,

and members of the Legislature who represent the municipality in which the hospital

is located . The appointed monitor shall have demonstrated expertise in hospital administration,

management, or operations. A monitor: (1) shall be authorized to attend all hospital board meetings, executive

committee meetings, finance committee meetings, steering committee meetings, turnaround

committee meetings, or any other meetings concerning the hospital's fiscal matters;

(2) may be authorized to have voting and veto powers over actions taken in the above

mentioned meetings; (3) shall report to the commissioner and the full hospital board

of trustees in a manner prescribed by the commissioner; and (4) shall serve for such

period of time as may be determined by the commissioner in consultation with the hospital. The commissioner shall maintain continuing oversight of the actions and recommendations

of the monitor to ensure that the public interest is protected.