New Jersey safety net hospitals face a 40% reduction in state funding for fiscal 2017, including losing out on a $50 million reprieve from state lawmakers in the final version of the budget.
Although the New Jersey Legislature voted last month to add $50 million to subsidies for charity-care hospitals, Republican Gov. Chris Christie line-item vetoed the measure when he signed the fiscal 2017 budget on June 30, according to the New Jersey Hospital Association.
Under the signed budget, 64 safety net hospitals will share $302 million in charity-care funding (PDF) from the state, a $200 million drop from fiscal 2016.
According to the state, hospitals that provide the highest relative percentages of charity care or provide care in the lowest income communities will receive $250.75 million of the charity-care funds. Another $51.25 million will be given to additional hospitals, according to the New Jersey Health Department.
Thirteen hospitals will receive more money from the state in fiscal 2017 than in the previous year, including four Hackensack University Medical Center campuses. Hackensack Meridian Health, the academic medical center's parent system, provides the most unreimbursed care in the state and is the fifth-largest charity-care provider in New Jersey, according to Robert Glenning, president of the system's financial services division and chief financial officer.
“Since several hospitals of Hackensack Meridian Health serve as important safety net hospitals for the state, an increase in funding will enable us to continue our mission to provide world-class healthcare to the communities we serve,” Glenning said.
New Jersey did add $60.7 million in graduate medical education funding for safety net hospitals.
"Our safety net hospitals provide a tremendous service, particularly to residents most in need," Christie said in a statement. "This budget prioritizes safety net hospitals to ensure there is continued access to care for uninsured and underinsured New Jerseyans.”
Christie initially proposed cutting charity-care subsidies by $150 million and then added another $50 million in planned cuts in May after receiving lower-than-expected state revenue projections. Christie rejected all attempts by the Legislature's Democratic majority to add more spending to his budget, claiming it would be irresponsible, according to the New Jersey Hospital Association.
“Our hospitals are working hard to transform and adapt to this changing healthcare landscape, but it can be hard to do that when you're faced with these types of financial hits,” said Kerry McKean Kelly, vice president of communications and member services for the New Jersey Hospital Association.
The charity-care funding is supported by an assessment paid by the state's hospitals, which draws federal Medicaid matching funds. Hospitals criticized the governor for sacrificing $50 million in hospital subsidies to generate just $25 million in savings for the state.
Under the plan, some hospitals stand to lose tens of thousands of dollars in state funding, including AtlantiCare Regional Medical Center, Bergen Regional Medical Center, Newark Beth Israel Medical Center and St. Joseph's Medical Center.
But the Hospital Alliance of New Jersey, which represents the state's safety net hospitals, said it was pleased that 12 safety net hospitals will get priority treatment in the fiscal 2017 budget.
“We must continue to support safety net hospitals in all our urban communities—even beyond the 12 defined by statute—through the charity-care program,” said Suzanne Ianni, CEO of the Hospital Alliance of New Jersey. “Their patients, their employees and their communities are counting on it.”
