[Passed Both Houses]

 

SENATE, No. 2169

 

STATE OF NEW JERSEY

 

INTRODUCED JUNE 12, 1997

 

 

By Senators BASSANO, SCOTT, Martin, Assemblymen Weingarten, O'Toole, Assemblywoman Crecco, Assemblymen Caraballo and Jones

 

 

An Act concerning certain maintenance costs for mentally ill and developmentally disabled patients in State institutions.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. If a county of the first class with a population greater than 775,000 and less than 800,000 according to the 1990 federal decennial census, has taken credits on charges to the county from the State for maintenance costs for mentally ill patients and developmentally disabled federal Medicaid and Medicare recipients in State institutions, pursuant to court orders, the State shall waive any outstanding repayment by the county for those credits.

 

    2. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill requires the State to waive Essex county's repayment to the State of $12 million. This obligation occurred as a result of lawsuits which held favorable rulings for the county in connection with the maintenance costs for indigent mentally ill patients and developmentally disabled federal Medicaid and Medicare recipients residing in State institutions.

    In January, 1989, Essex county brought a lawsuit against the Commissioner of Human Services, which challenged the State's practice of retaining 50% of maintenance payments received in the form of Social Security benefits on behalf of indigent patients with Essex county settlements who reside in State institutions. The county maintained that this practice violated N.J.S.A.30:4-60. The trial court ruled in the county's favor and ordered the State to disburse 100% of those receipts to the credit of Essex county, retroactive to January 1, 1980. Essex county proceeded to take credits on the monthly billings for its share of the cost of patients in State institutions. On appeal, the Appellate Division in County of Essex v. Waldman, 244 N.J. Super. 647 (App. Div.1990) (hereafter Essex I), upheld the favorable ruling for the county, but limited the retrospective effect to the date of the filing of the complaint, January 25, 1989. In denying retroactive relief, the court considered the negative impact which the 10-year retroactive order would have on the State's budget (which was facing a $600 million shortfall).

    In April, 1989, Essex county filed another suit charging that the county had been wrongfully charged for maintenance costs of persons in State institutuions and facilities for the developmentally disabled in cases where the State had received federal Medicaid and Medicare benefits for those persons, in violation of N.J.S.A.30:4-68.1. The trial court ruled in favor of the county, made the ruling retroactive to March 30, 1989, and allowed a credit of $4 million, pending a final accounting. This decision was affirmed by the Appellate Division in County of Essex v. Com'r DHS, 252 N.J. Super. 1, (App. Div. 1991). Again the county proceeded to take credits against maintenance billings.

    Subsequently, other counties were eligible for credits. However, while other counties were anticipating credits on past billings, Essex county was faced with the task of having to repay the State $12 million.

    In the same way that the Appellate Division in Essex I was able to avoid a negative impact for the State's budget by limiting retroactivity of the lower court's decision, this legislation would avoid the negative impact for Essex county's budget by waiving the $12 million repayment to the State.

 

 

                             

 

Waives certain county repayment to State for credits for maintenance costs for mentally ill and developmentally disabled persons in State institutions.