Charity care funding to remain unchanged at $262M — but, this year, it comes with requirements

The fact that the state is proposing to maintain the current level of funding for charity care, which helps hospitals cover the costs of uninsured and poor patients, was lauded Tuesday by health care officials.

But the stable funding — $262 million in Gov. Phil Murphy’s Fiscal Year 2020 budget proposal — comes with strings attached.

First, the hospitals receiving charity care can only do so if they are connected to the New Jersey Health Information Network, a network of electronic health records of all patients in the state.

In addition, what charity care dollars cover will be changing.

Charity care dollars are used by the state’s acute care hospitals, and matched by federal dollars, to help cover the costs of uninsured and poor patients.

In the past few years, the funding has decreased with the onset of the Affordable Care Act, which helped drive the number of uninsured down. Since the individual mandate was repealed at the federal level, charity care funding is back in the spotlight.

The Murphy administration is using this to impact how health care is delivered in the state.

File photo
Cathleen Bennett of the NJHA.

“Hospitals that receive charity care funds will also be required to connect with the New Jersey Health Information Network to improve interoperability,” according to the budget proposal.

NJHIN began under the former Department of Health commissioner, and the current New Jersey Hospital Association CEO and president, Cathleen Bennett.

Commissioner Shereef Elnahal told ROI-NJ on Wednesday that the HIN has 62 of the 72 acute care hospitals in the state participating. He hopes the budget proposal will lift that number to 100 percent participation.

The HIN requirement lines up with federal requirements for hospitals to have patients able to access their information electronically, Elnahal said, so hospitals should already have the equipment necessary for that.

The administration has made gathering data a key moving forward.

“To encourage improvements in health care access and quality, one-12th of each participating hospital’s charity care will be contingent on the reporting of key indicators,” according to the budget proposal.

Those indicators include the number of charity care patients who are connected to follow up preventative and primary care upon discharge.

This changes the dynamic of charity care dollars being used as a crutch for emergency visits, as some hospitals have been accused of doing in the past.

Elnahal said the state conducted a survey last year to determine what was being done to help charity care patients avoid costly emergency room visits.

The majority of the answers, he said, indicated use of Federally Qualified Health Centers and hospitals using their ambulatory care sites.

The latter would qualify for charity care dollars, he said.

The state will be issuing more details on the requirements once the budget is enacted, Elnahal said.

After the budget address Tuesday, the Fair Share Hospitals Collaborative said in a statement that keeping funding flat was the right thing to do.

File photo
Shereef Elnahal, New Jersey’s commissioner of health.

“All hospitals are safety nets for their communities and rely on the Charity Care program to help offset the cost of treating low-income and uninsured patients,” according to FSHC.

“For the past several years, Fair Share Hospital Collaborative member hospitals have disproportionately borne the brunt of the previous administration’s drastic cuts to the Charity Care program, yet continue to provide high-quality, cost-efficient care to all New Jersey residents, regardless of their ability to pay for services.

“We are happy to see Gov. Murphy recognizes the critical role all hospitals provide in serving their community and has chosen to maintain last year’s increase of $10 million to the Charity Care Program. It’s a great step towards restoring funding to statutory levels for all New Jersey’s hospitals.”

The NJHA also lauded the funding, but it pushed for greater focus on post-acute care and elderly care facilities.

“Our health care system is in a transformative period, focusing on value, population health and the expectations of our health care consumers,” Bennett said.

“Health care providers are investing energy, resources and some really innovative thinking into these areas — as they should. And yet, New Jersey hospitals continue to face the age-old challenges of caring for people without health insurance:

  • “In 2016, the most recent year data is available, our hospitals provided $565 million in charity care services to individuals. With the governor’s proposed funding of $262 million, New Jersey’s hospitals will shoulder the burden of $303 million in unreimbursed care for our state’s most vulnerable residents.
  • “Meanwhile, the number of N.J. residents insured through the ACA’s online marketplace has declined by 40,000 the last two years, and the state’s uninsured rate is once again on the rise — from 7.7 percent in 2017, to 8 percent in 2018, to 9 percent today.”

That being said, Bennett and NJHA increasingly have been focused on the aging population of the state — an issue that has taken hold nationally as one of the most important for the health care industry to focus on.

“We appreciate a budget proposal that recognizes those same goals, and we welcome the opportunity for further discussion with elected leaders on the present — and the future — of our health care system, including the pressing need to adequately fund nursing homes and other providers who care for our seniors in post-acute settings,” she said.