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Hospital Groups Stand United on State Budget
Date:4/21/2009

TRENTON, N.J., April 21 /PRNewswire-USNewswire/ -- Four associations representing the state's 114 hospitals have reached a consensus position on the state's proposed healthcare budget for 2010.

Among other principles, the groups urged the state to examine all avenues for additional federal matching funds and agreed on a minimum floor that all hospitals should receive this year for charity care funding.

The agreement was shared today with members of the state Legislature by the four hospital groups -- the New Jersey Hospital Association, the Council of Teaching Hospitals, the Hospital Alliance of New Jersey and The Catholic Healthcare Partnership of New Jersey. The consensus was reached through the work of NJHA's Joint Charity Care Task Force, which has met since last fall with hospital leaders, state legislators and members of the Corzine Administration to achieve a consensus approach to the state's perennial debate over charity care funding. That work was especially critical in the current environment, with state revenues sagging while hospitals struggle to provide critical services and jobs amid growing financial challenges.

As partners with the state, the Task Force wanted to do its part to help maximize New Jersey's federal funding to stave off any hospital cuts. It has identified existing state dollars (currently paid by hospitals to support federally qualified health centers) that could be used to garner up to $20 million in additional federal matching funds that could be used to support hospitals -- all while maintaining current funding levels for the FQHCs.

"New Jersey is a richly diverse state, and so are its hospitals. Reaching a consensus position is no small undertaking," said NJHA President and CEO Betsy Ryan. "The fact that the industry is in agreement shows the critical condition our hospitals are in and the essential need for state funding that will allow them to remain open to care for the people of New Jersey."

Gov. Corzine's proposed budget for 2010 calls for charity care funding to be held at last year's level of $605 million. Hospitals will provide about $1.3 billion in charity care services to the state's 1.4 million uninsured residents this year.

Other healthcare programs would sustain moderate cuts in the 2010 budget, including graduate medical education, the Health Care Stabilization Fund and the Hospital Relief Subsidy Fund. Other healthcare programs also took budget hits, including adult day health services and nursing homes.

Task Force members agreed that the state's charity care reimbursement system is broken and requires a multi-year strategy to address its many problems. However, the consensus position applies to just the current budget year in recognition of the unprecedented economic challenges the state is facing in 2009.

"We stand together in support of all New Jersey hospitals," said Fr. Joe Kukura, president of the Catholic Healthcare Partnership. "Our hospitals share a caring mission and serve as the safety net for all New Jerseyans, including the 1.4 million without health insurance."

Richard Goldstein, MD, president and CEO of the Council of Teaching Hospitals, agreed. "In a very difficult year, this is a palatable compromise. But we must remain focused on the healthcare system of tomorrow. We need adequate support for teaching programs, for safety net providers and for all of the community hospitals that serve the people of our state."

Hospital leaders expressed their support for the Governor and legislators as they tackle an enormous fiscal challenge in the 2010 budget and asked for their help in obtaining new federal dollars.

"We are grateful that Gov. Corzine recognized the importance of New Jersey's hospitals by sparing charity care from cuts in his budget proposal," said Suzanne Ianni, president and CEO of the Hospital Alliance. "In this dire economy, we need to overturn every stone to ensure New Jersey is maximizing its federal reimbursement. We appeal to our state leaders to fully explore the golden opportunity identified by the Task Force. New Jersey just can't afford to leave 'free' healthcare dollars on the table in Washington."

The associations' consensus principles are:

  • Ensure that no hospital receives less than 10 cents on the dollar in charity care reimbursement. Charity care reimbursement already is based on a rate well below the national average for Medicaid.
  • Exhaust all efforts to maximize federal matching funds. The Task Force has identified existing state dollars, generated by an assessment on hospitals, that it believes qualify for federal matching funds. By taking advantage of that opportunity, the state could continue providing for New Jersey's federally qualified health centers (the current recipients) while bringing in $20 million in new federal dollars. That new funding could offset the cuts planned to graduate medical education ($4 million in state funds), the Hospital Relief Subsidy Fund ($3.2 million) and the Health Care Stabilization Fund ($2 million); ensure that all hospitals receive at least 10 cents on the dollar for charity care ($2.5 million); and support an expanded definition of "safety net" hospitals (state share not available.)
  • Support the Health Care Stabilization Fund for 2010 with funding no less than $40 million, while maintaining the existing application process for these funds.
  • Using the most current audited claims data available, establish wider "corridors" between hospitals' allocations from one year to the next. This helps ensure that charity care dollars "follow the care." Any hospitals that suffer deep losses over the prior year should receive priority for assistance from the Stabilization Fund.
  • Ensure that no hospital receives greater than 100 percent charity care reimbursement.
  • Add the state's top five hospitals with the highest documented levels of charity care to the list of hospitals defined as "safety nets."
  • Prospectively establish a "fiscal year" for charity care claims submission to allow for a more timely release of each hospital's charity care reimbursement amount. Having this information well before the start of the state's fiscal year is imperative for hospitals' planning and budgeting efforts.


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SOURCE New Jersey Hospital Association
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