The New Jersey Hospital Association made good last week on its threat to sue the state for missed charity-care payments.
The suit, filed in Essex County Superior Court in Newark, N.J., seeks payment for more than $600 million in care to the poor and uninsured that hospitals expect to provide this year. Since the state's charity-care reimbursement methodology expired last December, the state has missed three payments to hospitals worth $160 million.
Late last month, the NJHA announced that its board had given permission to sue the state for unreimbursed care on behalf of its 84 acute-care members (April 1, p. 24).
In a statement released last week, NJHA President Gary Carter said Gov. Christine Todd Whitman and the state Legislature "have failed to resolve the charity-care issue, with no concrete proposal to date regarding a viable funding source."
Carl Golden, Whitman's communications director, said the governor and the Legislature are continuing to move ahead to forge a consensus. "Hopefully, we can make the suit academic," he said.
The suit contends that the state can't use private facilities without just compensation. It also argues that the state imposed an obligation for performance and then failed to compensate for that performance.
Carter said the lost revenues are forcing many hospitals to reduce services, lay off employees and delay payments to vendors.