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Budget Increases Funding While Providing Reforms to Increase Efficiency, Fairness and Stability in Hospital Assistance
Trenton, NJ – Further strengthening New Jersey’s healthcare safety net for the most vulnerable in New Jersey, Governor Chris Christie put forward a budget proposal that increases hospital funding for the second consecutive year.   The Governor’s fiscal year 2011 budget increased funding for hospitals by $36.3 million. Governor Christie’s proposed budget for fiscal year 2012 increases state aid to hospitals by $20 million and offers critical reforms to the Charity Care, Hospital Relief, and Graduate Medical Education funding formulas. These reforms, already praised by the hospital and healthcare communities, will make the state’s annual distribution of hospital funding more equitable and predictable, while increasing efficiency in the system by streamlining administrative procedures – allowing more funds to go to patient care rather than bureaucratic and administrative costs.
“It is a core principle of our state and our society to protect those most in need, particularly in these continued economic difficulties. Because of reforms we set in motion last year and careful management of our finances, we are able to devote more resources to key priorities and protect the most vulnerable New Jerseyans,” said Governor Chris Christie.  “Through increased resources and common sense reforms in the way we fund hospitals, we are strengthening New Jersey’s safety net, and ensuring that funding is being used to benefit patients, rather than fund administrative costs and bureaucracy.”
Under this year’s proposed budget, all of the state's acute care hospitals will be receiving funding under revised distribution formulas for charity care and the Hospital Relief Subsidy Fund. In addition, all 38 teaching hospitals will receive funding for Graduate Medical Education, an increase of 14 hospitals.
Many hospitals in the state are struggling financially and depend on funding allocated in the state budget to provide mental health and medical care to tens of thousands of New Jersey residents who either lack health insurance or are underinsured.
Specifically, under the proposed budget:
• Graduate Medical Education support was increased by $30 million (to $90 million) and will be distributed under a new formula to 38 qualifying hospitals rather than the 24 that received it in 2011.
• The Hospital Relief Subsidy Fund remains stable at $166 million but will be allocated under a new formula to all 72 New Jersey hospitals rather than just the 26 that were eligible in SFY 2011.
• Charity Care was increased by $10 million (to $675 million) and will be distributed under a new formula to all 72 New Jersey hospitals.
Health Commissioner Dr. Poonam Alaigh explained that the new charity care funding formula uses hospital discharge data versus a manual claims-based audit process. “This new formula will enable hospitals to improve their financial planning and continuity of service because charity care funding to benefit our state’s families will be more predictable from year to year,” Dr. Alaigh said.  “These are reasonable changes to improve the delivery of hospital funding, cut costs and ensure that as much funding as possible goes to serving patients.”
"This budget once again demonstrates Governor Christie’s commitment to New Jersey’s most vulnerable by funding the Department’s core priorities, while maintaining fiscal responsibility, said Human Service Commissioner Jennifer Velez.  “With these reforms and increased funding levels, New Jersey families will continue to get the services they need during these challenging economic times.”
Hospitals that demonstrate a strong commitment to medical education of physicians, behavioral health services and obstetric care will receive the most significant increase under the reforms included in the fiscal year 2012 budget. The Departments of Health and Senior Services and Human Services anticipate strong support from the health care sector for these innovative changes to past practice.
Graduate Medical Education, Hospital Relief Subsidy Fund and Charity Care figures can be found at
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