Charity-care shocker: Solaris shifting loss to Muhlenberg?

Muhlenberg's fate was discussed in a Gannett state bureau story in Tuesday's Courier.

Unfortunately, the story is not on the Courier's or the Home New Tribune's websites. The Asbury Park Press, whose servers deal up both CN and HNT stories are having technical problems this morning.

Herewith, I am posting the Muhlenberg/JKF section -- plugged in by local reporters to the state story -- and you will find the master story from the APP at the bottom of the page.

The Muhlenberg section [emphasis added] --

The New Jersey Hospital Association applied the formula using 2006 claims and concluded that 26 hospitals that share $46 million in charity-care aid today would lose all their aid, including Jersey Shore University Medical Center ($5.4 million), JFK Medical Center ($4 million), Community Medical Center ($3.7 million) and St. Peter's University Hospital ($3 million).

Steven Weiss, spokesman for Solaris Health System which operates Muhlenberg Regional Medical Center in Plainfield and JFK Medical Center in Edison, said the corporation's finance department is still reviewing the numbers provided by the state and is trying to determine what impact the change will have on Muhlenberg.

Does that mean Solaris is trying to find a way to save Muhlenberg? Or trying to find a way to shovel the entire $4 million fund loss over onto the Muhlenberg books?

If it's the latter option, would doing so make JFK look artificially healthier than it really is financially?

Keep an eye open.

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Asbury Park Press
March 11, 2008

Some hospitals face complete loss
of charity care aid

By MICHAEL SYMONS
GANNETT STATE BUREAU

Financial aid from the state to hospitals for treating uninsured patients would be slashed to facilities large and small, urban and suburban, under a proposed charity-care formula announced Monday by state officials.

Details about each facility's aid will not be known until June. But under one simulation done by the New Jersey Hospital Association, more than two dozen hospitals would lose all of their funding. Some may see aid increases, however, if a series of restrictions on aid growth now in effect are discontinued.

Health and Senior Services Commissioner Heather Howard called the proposal "the start of a conversation" about how to reduce charity-care aid by $108 million, among the spending cuts in Gov. Jon S. Corzine's proposed $33 billion state budget.

This year, the state is providing $716 million for charity care. For the upcoming year, Corzine has proposed reducing that to $608 million — a 15 percent cut, overall — and steering more of what remains to safety-net hospitals in poor areas.

"We are expecting everybody to do more with less, but we didn't feel that they should sustain a greater cut," Howard said of safety-net hospitals. "We felt this was a cut that could be sustained, but not greater, which is why the cuts are graduated."

Hospitals would be grouped into three tiers, based on how much of their total revenues come from charity care, a term used for treatment given to the uninsured:

— Those where charity care accounts for more than 8 percent of revenue would see their aid cut by 5 percent.

— Those where charity care accounts for 3.6 percent to 8 percent of revenue would receive 34 percent less aid.

— Those where charity care provides less than 3.6 percent of revenue would get none.

Howard couldn't say how many hospitals would fall into each tier because aid will be distributed based on 2007 claims data — numbers the state doesn't expect to have until June. But she said the most recent data indicates one-third may fall into each group.

The New Jersey Hospital Association applied the formula using 2006 claims and concluded that 26 hospitals that share $46 million in charity-care aid today would lose all their aid, including Jersey Shore University Medical Center ($5.4 million), JFK Medical Center ($4 million), Community Medical Center ($3.7 million) and St. Peter's University Hospital ($3 million).

For others, the reductions might not be clear-cut. After the state for years used out-of-date information to calculate aid, the current year's transition to more accurate data was phased in to limit hospitals from huge gains or losses in aid.

Eighteen hospitals may receive more money, based on the increasing number of charity-care patients they are treating. Three dozen others could face minuscule or massive cuts, depending on whether those aid-shielding circuit-breakers are continued.

"With cuts of this magnitude, they (hospitals) will need time to make some hard choices about cutting services, eliminating jobs or even if they can stay open at all," said Betsy Ryan, chief operating officer of the New Jersey Hospital Association.

Corzine's proposed budget includes a $35 million "health care stabilization fund" within that $608 million for charity care. That would be used to address the financial needs of health-care providers to ensure access to care exists in all communities.

That $35 million might not be all distributed to hospitals, Howard said.

"Our goal is to ensure access to services, and I think if we talk about health care in the 21st century ... there are many ways to meet the needs of the community. And so it may be extended hours at a community health center," Howard said. "There are different ways to meet those needs — bus service. There are a variety of ways to meet the needs of a community. It very well may be to a hospital, but it may not be.

Link to Asbury Park Press online story here.

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-- Dan Damon

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