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State releases charity care funding levels

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The state Department of Health and Senior Services this week released hospital-specific funding levels for state safety-net programs, including charity care, the Hospital Relief Subsidy Fund and the Graduate Medical Education Fund.

The total level of funding — $961 million — is set to remain unchanged in fiscal 2013, but the state did alter the funding formula used to distribute the money. Under the new formula, hospitals will receive 90 percent of the money they received last year. The remaining 10 percent of the $675 million in charity care funding will be distributed based on documented increases or decreases in the levels of charity care provided at a given hospital.

Kerry McKean Kelly, vice president of communications and member services at the New Jersey Hospital Association, said the new formula makes sense.

"We appreciate this formula, and it approves a lot of the principles that were endorsed by the NJHA board of trustees, meaning that the money should follow the care," she said.

In addition to the charity care funding, the state allocated $166 million to the Hospital Subsidy Relief Fund, which helps hospitals with high levels of behavioral health and obstetric care; and $90 million to the Graduate Medical Education fund, which pays for physician training. The remaining $30 million will go to a fund that awards money to health care organizations that provide service in areas where such services are at risk. That money is awarded on a competitive basis each spring.

Kelly said they're also pleased with the timing of the release. In some past years, hospitals didn't find out until as late as June how much money they would be getting in the following fiscal year.

"The state has told us they're committed to greater predictability and transparency in how they distribute" these funds, she said.

Kelly said New Jersey hospitals provided about $1.3 billion in charity care each year.

"We did see a bit of an uptick in charity care following the stock market crash of a few years ago and through the recession," she said. However, she said those levels have stabilized in the last couple of years.

The full report can be viewed here.

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