Single room surgical centers throughout the state would be exempt from a state assessment charged to larger facilities under a bill passed by the senate in June.

The assessment, which is currently charged to all of the state’s two-room and larger ambulatory surgical centers, was specifically carved out of a bill passed by the senate that would require all centers regardless of size to be licensed with the state and submit to regular inspections.

The exclusion of the tax, which brings in as much as $350,000 per center, is a victory for the small, unlicensed centers, which prior to voting pumped thousands of dollars in campaign donations to several key legislators. An attorney representing the centers said at the time the cash was just part of an overall advocacy effort, but the exemption will potentially save the facilities millions.

The assessment amounts to nearly 3 percent of a facility’s gross receipts.  According to a spokesman for the treasury department, ambulatory centers across the state paid assessments of $44 million last year and are expected to up that amount to $47 million in the current fiscal year. It's unknown how much additional revenue the smaller centers would bring in, but according to an industry associaiton there are about 120 throughout the state.

Bill sponsor Sen. Joe Vitale, who amended the bill to carve out the tax, said the money donated by more than a dozen surgical centers was irrelevant.

“I could care less what kind of money they throw around,” said Vitale, who did not receive any cash from the centers he is seeking to regulate.  The Middlesex county senator said he removed the provision for the tax because it was easier politically.

“The legislation is really meant to address safety and quality,” he said.  “It’s not about the money. Having the tax associated with it I think would slow the legislation down politically. It’s more important to me at least that these facilities are safe than having to provide for additional fees.”

The bill was introduced at the same time as a report compiled by the New Jersey Health Care Quality Institute, which found that of 91 ambulatory surgery facilities inspected by the state health department,  49 did not meet the standards to participate in Medicare.  A total of 25 percent were cited for “Immediate Jeopardy,” which according to the report is “a violation which is defined as noncompliance with established rules that has caused, or is likely to cause, serious injury, harm, impairment or death to a patient.”

Of the 40 unlicensed facilities that were inspected, 17 were cited for “immediate jeopardy” of which seven were closed temporarily.

The legislation was not met with open arms by a coalition of the unlicensed centers.

In a March letter to members of the New Jersey Association of Ambulatory Surgery Centers, association government affairs chair Jeffrey Shanton warned that the tax, as well as state mandated physical requirements for surgical centers, could put several out of business.

The new amendments included a provision to allow for an exemption from the requirements and another that requires a state Department of Health employee meet with surgical center representatives to come up with new physical plant requirements for the one-room centers.

Just after the law was introduced, centers from around the state began to flood the coffers of some lawmakers with donations.  An attorney for the centers described the donations as not specific to any legislation and just part of the group's overall advocacy campaign.

In April, Senate health committee chair Sen. Loretta Weinberg collected more than $11,000 from 11 different centers and Assembly Speaker Sheila Oliver received at least $28,000 from 14 different centers.  Other lawmakers who sit on both the senate and assembly health committees also received smaller donations.

All of the money was donated a month after the bill was introduced in the assembly.

In addition, on its latest report, the Senate Democratic Majority reported $35,000 in donations from 10 ambulatory surgical centers.

When the donations to Weinberg and Oliver were reported by PolitickerNJ in May, both lawmakers said it would have no bearing on their votes.  Each woman said single room facilities should be regulated to make them safer.

“I welcome support from many segments of New Jersey, but I have no tolerance for surgery centers that have been cited for unsafe conditions such as poor infection control and unsterilized equipment," Oliver said at the time. "Any legislation that has been introduced to make this industry safer will receive the proper consideration, as will any other steps that are needed following these recent revelations about unsafe conditions.”

From the senate, where it passed 30 to 8, the bill now heads to the assembly.  Vitale said he is unsure if it will pass in its current form because exempting the centers from a tax already paid by larger centers could present a legal issue. 

“It may be that we have to apply that tax uniformly so that it comports with the law,” Vitale said.