New Jersey hospitals lose charity care law challenge

New Jersey’s high court unanimously rejected arguments brought forth by more than a dozen hospitals that charity care is an unconstitutional taking of private property without just compensation, NJ.com reported July 16. 

State Supreme Court Justice Douglas Fasciale wrote in a 46-page decision that the “heavily regulated nature of the health care industry, the long-standing tradition of hospitals caring for indigent patients, and the existence of tax benefits specifically tied to such care all diminish expectations that hospitals might be free of charity care obligations,” according to the report. 

The court ruled that hospitals are free to challenge their charity compensation through administrative and legislative channels, according to the report. 

The lawsuit was filed by a coalition of New Jersey hospitals that serve a disproportionate share of low-income patients, including Englewood Hospital, Westwood-based Pascack Valley Medical Center and Passaic-based St. Mary’s General Hospital, according to the report. 

The hospitals argued that although they receive some taxpayer funding from the state to provide charity care, the subsidies fail to cover even the basic cost of care, the report said.  

Jim Robertson, an attorney representing the hospitals, said in a statement that they believe the New Jersey Supreme Court’s analysis is flawed and is “contrary to the trend of United States Supreme Court decisions in the last decade finding wrongful physical takings occurring in regulated industries and activities.” 

Mr. Robertson said the hospitals are considering whether to take the case to the U.S. Supreme Court.