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New 'One Room' law encourages expansion of surgical centers in NJ

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Surgical facilities in the state just got a boost from Trenton, as out-going Gov. Chris Christie just signed the "One Room" bill into law.

The law allows registered surgical centers (“One Rooms”) to obtain licenses from the New Jersey Department of Health and now be exempt from the current “physical plant standards” overseen by the New Jersey Board of Medical Examiners, which many health care professionals saw as constricting. All One Rooms will be exempt from costly ambulatory care facility assessment and licensing fees under the new law.

In essence, the new law eases the regulatory burdens on surgical practices and make it easier for them to sell or expand their businesses.

The One Room bill (A-4995/S-287) was signed into law on January 12 by Governor Christie and was sponsored by state Senator Joseph Vitale and Assemblyman Herb Conaway. 

According to health care attorney Mark Manigan at Roseland-based Brach Eichler, the new law benefits existing one rooms by allowing them to be exempt from existing licensing fees and the ambulatory facility gross receipts assessment, while still being subject to oversight by the NJDoH.

“The key benefits of licensure include the fact that any physician (not just owners) can use your facility,” said Manigan in an email to NJBIZ. “Further, your facility is now salable to health systems and ASC management companies.  You can also combine your facility with other One Rooms or licensed facilities to form a larger facility.”

Manigan added that the law also gives existing licensed surgical centers the option to expand, as it allows licensed centers to combine with an existing One Room. “The law permits you to combine with a One Room and expand.  For example, you combine with a One Room, the existing One Room facility goes away and your facility expands by one operating room,” said Manigan.

The law also allows health care systems to invest directly in One Rooms, he said. Health care systems that are already affiliated with One Rooms through management arrangements may consider restructuring the partnership as a direct investment.

“We see a tremendous amount of deal flow in the ASC market” as a result of the new law, Mannigan added.

Jeff Shanton, president of the New Jersey Association of Ambulatory Surgery Centers, also praised the new law.

“This new law also brings some much needed financial relief to our industry,” Shanton said in a written statement. “Specifically, the new law now permits combinations among registered surgical practices and licensed facilities, which would create some liquidity in the market, something desperately needed in light of the Codey Law moratorium on the development of new surgery centers. In addition, hospitals can also now affiliate with these registered surgical practices.”

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Vince Calio

Vince Calio

Vince Calio covers health care and manufacturing for NJBIZ. You can contact him at vcalio@njbiz.com.

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