NJBIA, Healthcare Groups Oppose Bill Imposing Excessive Terms of Employment in Healthcare Facility Transfers

The New Jersey Business & Industry Association and a host of leading healthcare associations jointly oppose a bill that would impose unfair conditions on the transfer of ownership of healthcare facilities in the state.

Bill A-3684 (DeAngelo, D-14), to be voted on today by the Assembly Budget Committee, states that all non-management employees must be retained by the owner-purchaser of the facility – unless a staff reduction is necessary.

However, with this provision comes a requirement that the new owner rehire employees based on seniority under the previous owner, with no end date to offer that job.

In written testimony to the committee, Health Care Association of New Jersey, New Jersey Hospital Association, LeadingAge New Jersey and Delaware, Fair Share Hospitals Collaborative, Home Care & Hospice Association of New Jersey, and NJBIA told the committee that the bill “will negatively impact the entire health care system by placing unprecedented restrictions on the sale or transfer of a facility.”

“We believe this legislation is very far reaching, impacting not just the nursing home community, but all healthcare facilities, including hospitals, home health agencies and healthcare service companies,” wrote the groups.

“Anyone under a management level, unionized or not, from small businesses to our largest employers, those who receive government payments to those who do not, private and non-profit, would be subject to this legislation. “

The groups noted that the bill, as currently drafted, would unnecessarily restrict normal management discretion, which is a fundamental right of business ownership. They said these decisions “may be necessary to address poor financial conditions that may have necessitated the sale or transfer and thus placed the facility at risk of closure or unable to improve operations.”

“Ultimately, patients may lose access to care or be impacted,” they wrote.

In their testimonythe groups detailed the scope of the bill in terms of the reach of the provisions and the impact on various healthcare businesses.

“It also sets a dangerous precedent for future private transactions in other sectors,” they wrote. “We are also not aware of any other state with laws imposing restrictions on the sale of a private or nonprofit entity.”