PO Box 360
Trenton, NJ 08625-0360

For Release:
February 26, 2014

Mary E. O'Dowd, M.P.H.
Commissioner

For Further Information Contact:
Office of Communications
(609) 984-7160

Governor Christie Continues Commitment To New Jersey Hospitals (En Espanol)

Fiscal Year 2015 Budget Invests $985 Million in Health Care Safety Net

New Jersey Health Commissioner Mary E. O'Dowd today released hospital specific distribution amounts for New Jersey's 72 hospitals as part of the Fiscal Year 2015 Budget.

The budget Governor Christie proposed Tuesday includes $650 million for Charity Care and maintains funding for three programs: $100 million for Graduate Medical Education, $166.6 million for an incentive program for improving quality of care and $24.7 million for mental health care. In addition, University Hospital in Newark receives a direct subsidy of $43.8 million.   

"Governor Christie's budget reflects his ongoing commitment to hospital funding at $985 million," said Health Commissioner O'Dowd. "This includes a $25 million increase for University Hospital, reflecting its unique role as a health care safety net provider, and a $25 million reduction in charity care, which is consistent with the decrease in the amount of Charity Care provided by hospitals over the last two years."

The change in Charity Care funding from $675 million in the current budget to $650 million in Fiscal Year 2015 is consistent with the fact that documented Charity Care has declined more than $30 million between 2010 and 2012 - and that future decreases are expected due to health reforms, specifically Medicaid expansion and the efforts of many hospitals and public health organizations around the state working to improve population health.

The Charity Care formula has been revised to account for hospitals that have seen an increase in Charity Care over the past two years, those that have seen a decrease, and to place a cap on the total funding any individual hospital can receive in Fiscal Year 2015.

"Equity, transparency, predictability and accountability continue to be the cornerstones of hospital funding for State Fiscal Year 2015," Commissioner O'Dowd said.

University Hospital in Newark will receive a $43.8 million subsidy, a $25 million increase over the $18.8 million in the Fiscal Year 2014 budget.

Some 42 teaching hospitals will receive a total of $100 million for Graduate Medical Education (GME), which supports the training of interns and residents. A new component of the formula, based on a suggestion from the industry, rewards administrative efficiency by using median data on GME program costs rather than individual hospital costs.

Also continued in the budget is $166.6 million for the hospital incentive program known as Delivery System Reform Incentive Payments (DSRIP). A total of 56 hospitals are participating in this program and their plans are currently under federal review.

"This program establishes a new precedent in New Jersey, representing the first time hospital subsidies are conditioned on hospitals achieving improvements in quality of care," said Commissioner O'Dowd.

Hospital funding distribution is available at: http://www.nj.gov/health/documents/hf_budget2015.pdf

The Budget in Brief Outline on Hospital Funding can be found at: http://www.nj.gov/health/documents/bib.pdf

To view the Calendar Year 2012 Documented Charity Care report visit: http://nj.gov/health/charitycare/documents/cc_reportdoc2012.pdf

Last Reviewed: 2/28/2014