ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 5223

STATE OF NEW JERSEY

DATED:  JUNE 23, 2026

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 5223.

      As reported, this bill creates a voluntary pilot program that would allow licensed inpatient psychiatric facilities to temporarily use existing adult acute psychiatric beds as adult closed acute psychiatric beds.  Under the program, the use of such beds would not constitute a change in the facility’s licensed bed capacity, require approval by the Department of Health, or “department,” or require a change to the facility’s licensure status.  The program would initially run for 24 months but the Commissioner of Health, or “commissioner,” may recommend legislative action to extend or make permanent the program.  A list of participating facilities would be published on the department’s Internet website for the duration of the pilot program.

      This bill also requires each participating facility to submit a quarterly report to the department, detailing:  (1) the patient type for whom the flexibility was temporarily utilized; (2) the duration of the utilization; and (3) the number of instances in which a psychiatric inpatient bed was converted.  The reports are required to be made public within 60 days of the submission of the report to the department.  Additionally, within 90 days of the end of the pilot program, the commissioner would be required to submit a report to the Governor and the Legislature regarding the pilot program and whether the program should be continued or made permanent.

FISCAL IMPACT:

      The Office of Legislative Services (OLS) determines that the Department of Health would incur additional administrative costs to develop and issue a survey to all facilities that participated in the pilot program established under the bill, and compile the survey results and recommendations concerning the continuation of the pilot program into a report for the Governor and the Legislature.

      The magnitude of the department’s increased administrative costs will largely depend on the number of general hospitals, psychiatric facilities, or special psychiatric hospitals that participate in the pilot program.

      State revenues, in the form of licensure and certificate of need fees paid by hospitals and psychiatric facilities for departmental reviews, will decrease under the bill, albeit by an indeterminate amount.  Because the OLS cannot anticipate the number of hospitals and psychiatric facilities that may temporarily convert adult acute psychiatric beds to adult closed acute psychiatric beds for involuntarily committed patients, the office lacks the informational basis to determine the magnitude of the revenue decrease.

      To the extent that University Hospital, an independent non-profit legal entity that is an instrumentality of the State located in Newark; and Bergen New Bridge Medical Center (formerly the Bergen Regional Medical Center), a county-owned entity in Paramus, are able to temporarily utilize adult acute psychiatric beds as adult closed acute psychiatric beds without paying the requisite Certificate of Need and licensure fees to the department, both facilities may realize an indeterminate amount of cost savings.