Senate Readies for Second Try to License Single-Room Surgeries

Beth Fitzgerald | January 27, 2012 | Health Care
Health committee chairman cites urgency after inspections reveal safety issues

Credit: Amanda Brown
State Sen. Joseph F. Vitale (D-Middlesex), chairman of the Senate health committee.
Sen. Joseph F. Vitale (D-Middlesex), chairman of the Senate’s health committee, is moving swiftly on a bill that would require all operating rooms to be licensed and inspected by the state Department of Health.

The measure was pocket-vetoed by Gov. Chris Christie earlier this month in part because it exempted one-room surgery practices from a tax that is levied on multi-room ambulatory surgery centers.

While it hasn’t yet been decided how to deal with the tax issue, the measure has broad support and carries a sense of urgency after inspections of single-room surgeries last year found serious safety violations.

“We realized there are safety issues in many of those facilities,” Vitale said. “We need to make sure that people who choose these facilities can be sure they’re inspected and properly licensed and they can rest assured that the facility is safe.”

Vitale said he will move the bill for a vote Monday by the Senate health committee. “Then we will go to work on the issue of whether or not the tax is ultimately necessary. We are still working on the issue but I want to move the legislation along to provide the necessary sense of urgency.”

A 2.95 percent tax on revenue is imposed on multiroom ambulatory surgery centers. Ambulatory surgery centers with less than $300,000 in annual revenue are excluded from the tax, but centers over that threshold pay the tax on all their revenue, up to a maximum tax of $350,000 a year.

Currently, surgeons with just one operating room in their medical practice don’t pay the tax and are not licensed and inspected by the health department, but come under the purview of the state Board of Medical Examiners, which regulates the practice of medicine.

The goal of the legislation is to bring one-room surgery practices under the same regulatory regime as multiroom centers, and it has the strong support of the New Jersey Association of Ambulatory Surgery Centers.

The Medical Society of New Jersey, advocating on behalf of the surgeons, supports licensure and inspection by the health department, but opposes subjecting the one-room surgical practices to the 2.95 percent tax.

“One of the reasons the governor vetoed the bill in the last session is because the tax wasn’t uniformly applied” to multi-room and single-room surgery facilities, Vitale said. The health department said applying a double tax standard could jeopardize the matching federal funds that New Jersey receives for Medicaid, which is funded 50/50 by the state and federal governments. Taxes on healthcare facilities must be “broad based in order to qualify for federal matching funds,” according to the state Department of Health.

The health department was also concerned with the added cost of inspecting the one-room surgeries, estimated to number more than 100. It currently is responsible for more than 200 multi-room ambulatory surgical centers.

Vitale said he’s not surprised that physicians are opposed to paying the new tax. “But there may be another way to address the issue, and if there is, we’ll entertain those ideas. We will work to resolve the issues that divide us,” he said.

Last year, the health department received a federal grant to inspect both multi-room and single-room surgeries. An analysis of the inspection reports by the New Jersey Health Care Quality Institute found the rate of serious safety violations was significantly higher at the one-room centers than at multi-room ambulatory surgery centers, and that study lends urgency to the legislation, Vitale said.

The legislation is supported by the New Jersey Association of Health Plans, whose members include health insurance companies. “We see a strong correlation between licensure and quality,” said Ward Sanders, the group’s present.

Larry Trenk, president of the New Jersey Association of Ambulatory Surgery Centers, is anxious to get the legislation passed and create “a level playing field for licensure and quality assurance. The question that remains is to what extent it [the legislation] has to be tweaked so that it is satisfactory to all parties.”