Burzichelli Bill to Protect Health Care for Salem County Residents Now Law

(TRENTON) – In a move vital to Salem County, legislation Assembly Deputy Speaker John Burzichelli sponsored to allow charitable assets from the sale of a nonprofit hospital to a for-profit entity to be allocated to a successor has been signed into law.

The law (A-3615) comes after a potential deal for the sale of Salem Memorial Hospital that was approved by state regulators fell through last year, creating uncertainty about the hospital’s future and questions about the status of a $51 million trust fund intended to support health care programs in the Salem County area.

“This money belongs to the people of Salem County and is supposed to support their health care,” said Burzichelli (D-Gloucester/Salem/Cumberland). “Meanwhile, we need state law to be very clear that this money can be allocated to a new charitable entity when necessary. The loss of this money would be unfair and catastrophic for the Salem County region. Protecting it for the benefit of Salem County residents is an absolute must.”

Under the proposed Community Health Care Assets Protection Act, the Attorney General must determine an amount of assets to be set aside as a charitable obligation when a for-profit corporation or out-of-state nonprofit corporation acquires a nonprofit hospital, based on the full and fair market value of the hospital at the time of the acquisition.

“This charitable obligation must be placed in a nonprofit charitable trust whose mission is to serve the health care needs of the community historically served by the predecessor nonprofit hospital,” Burzichelli said.

The reversion of assets to the nonprofit charitable entity would occur upon the determination by the Superior Court that the allocation of the assets to the acquiring nonprofit charitable entity would be more consistent with the original nonprofit hospital’s purpose.