Health Department updates Medicaid outpatient payment program to reduce charity care cuts

In a recent meeting of the New Jersey Assembly Budget Committee, discussions centered on the future of hospital funding, particularly regarding the Medicaid outpatient supplemental payment program and its impact on charity care. The committee explored whether hospitals would fare better under the new Medicaid program compared to the traditional charity care system.

Officials highlighted that the Department of Health and the Department of Human Services are closely collaborating on this interconnected program. They noted that shifting more funding to the state-directed payment model would allow hospitals to secure a larger federal match, ultimately benefiting their financial stability. Without this change, hospitals faced a potential reduction of $35.4 million in funding.

The committee also addressed concerns about proposed cuts to charity care. It was clarified that the adjustments aim to reduce charity care in favor of the supplemental program, which is designed to better support hospitals financially. The new funding formula is expected to preserve funding levels for most hospitals, ensuring they are better off than they would have been under the previous system.

Additionally, the committee examined trends in charity care patients. Reports indicated an increase in the number of charity care patients, particularly during the period of Medicaid unwinding, when many individuals were being requalified for Medicaid benefits. This rise in charity care cases underscores the ongoing need for effective healthcare funding solutions.

As New Jersey navigates these changes, the outcomes of these discussions will have significant implications for hospitals and the communities they serve, ensuring that residents continue to receive necessary healthcare services. The committee's efforts reflect a commitment to adapting funding strategies that prioritize both hospital sustainability and patient care.