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County hospital fee program, per‑diem rules boost Essex revenue to $18M projection
Summary
Essex County’s health director told commissioners that a federal Medicaid fee program and a change to include outpatient visits pushed a county revenue line to $18 million for 2026; officials said the funding is county revenue (not hospital operating revenue) and depends on federal approval of the plan.
Frank Delgaudio, director of the Department of Health and Rehabilitation, updated commissioners on the county psychiatric hospital and an expanding federal‑state hospital fee program that has become a significant county revenue source.
Delgaudio explained the fee is administered through a federal/state accounting formula that charges participating hospitals a fee and then redistributes federal funds back to hospitals based on Medicaid discharges. ‘‘This is not a revenue stream for the hospital center. It’s a county revenue stream,’’ Delgaudio said. He told commissioners the program’s scope increased for 2026 because outpatient Medicaid visits were newly included, which pushed the county’s projection to about $18,000,000.
On the mechanics, Delgaudio gave the county’s per‑diem framework for state reimbursement: ‘‘For 2026, our per diem rate is dollars $10.17,’’ he said, and noted the county is responsible for roughly 15% of the per‑diem cost for Essex County residents placed in state psychiatric hospitals while out‑of‑county placements are reimbursed at 100%.
The director also described staffing and vacancy patterns at the hospital center — nursing remains the largest budget area (274 positions budgeted for 2026) with a notable number of per‑diems and hospital‑attendant vacancies — and outlined the first operating budget for the county’s public health management office, intended to sustain grant‑funded activity after some COVID era grants expire.
Commissioners asked about timing and cash flow: Delgaudio said federal approval of the county’s waiver/plan can delay when hospitals receive and then remit fees, and that some payments could arrive ‘‘tomorrow or next month’’ depending on federal action. He also noted that one hospital had been placed on a payment plan earlier but was working under an agreed schedule to pay owed fees.
No formal vote was taken. Commissioners requested follow‑up material on net fiscal impact and timing of federal approvals.
