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July 06, 2016

N.J. Budget Cuts Charity-Care Spending by $200 Million

New Jersey hospitals will receive 40 percent less money to provide free and discounted care to low-income patients in the fiscal-year 2017 state budget, Modern Healthcare reports. The spending plan signed at the end of June by Gov. Chris Christie includes $302 million for charity care, down from $502 million the previous year.

Mr. Christie submitted a budget proposal in February that included a $150 million reduction in the allocation for uncompensated treatment, and he cut another $50 million in May after getting lower-than-expected projections for state revenue. Legislators sought to reinstate the $50 million — half of it from the state and half from the federal government — but the governor eliminated that funding with a line-item veto.

State officials have said big gains in the number of New Jersey residents with health insurance, an outgrowth of the Affordable Care Act, mitigated the need for charity-care subsidies. The bulk of the budgeted funds will go to safety-net hospitals that provide the highest proportion of uncompensated care or serve the lowest-income communities.

“Our hospitals are working hard to transform and adapt to this changing health-care landscape, but it can be hard to do that when you're faced with these types of financial hits,” said Kerry McKean Kelly, a spokeswoman for the New Jersey Hospital Association.