NJ Department of Health Releases Annual Report of 2013 Documented Charity Care
In November 2014, the New Jersey Department of Health released its report entitled “Calendar Year 2013 Report of Documented Charity Care (“Report”)”. This Report summarizes data for Documented Charity Care (“DCC”) on the Medicaid payment rate for all eligible New Jersey hospitals for calendar year 2013. Similar to the previously issued report in 2012, this Report accumulated data from 72 hospitals resulting in a total of $1.024 billion inpatient and outpatient DCC. Calendar year 2013 represented an increase of 2.6 percent and 2.9 percent from calendar year 2012 and 2011, respectively.
Consistent with the 2012 report, this Report provides an analysis of DCC by hospital facility, by health system and by selected regions in the State. Additionally, the Report provides historical trend information for calendar years 2007 through 2013, variances from prior years and other statistical information. The Report does not include state-owned psychiatric hospitals, comprehensive rehabilitation hospitals, ambulatory surgery facilities or federal military and veterans hospitals.
Background
The New Jersey Hospital Care Payment Assistance Program, also known as the NJ Charity Care Program, was created in 1993 to provide assistance to hospitals in order to assist in enabling them to fulfill their mission of providing care to any patient regardless of ability to pay. Many states have a public hospital that is owned by the state or local government that provides care to uninsured or impoverished individuals. New Jersey is one of the states that does not have a public hospital and, accordingly, enacted N.J.S.A. 26:2H-18.64 which requires all hospitals in the state to provide charitable care to its patients regardless of ability to pay.
The Report states that “Acute care hospitals in the State of New Jersey (NJ) are required by state law to provide all necessary care to patients regardless of ability to pay. Charity Care is free or reduced charge care that is provided to patients who receive their inpatient and outpatient services at acute care hospitals throughout the state. New Jersey residents with incomes below 301 percent of the federal poverty level who do not qualify for Medicaid or any other insurance are eligible to receive charity care services for both inpatient and outpatient care at any of the state’s acute care hospitals. Families with incomes up to 200 percent of the federal poverty level will receive free care, whereas families between 200-300 percent of the federal poverty level will be responsible for a portion of their hospital bill.”
Results
As outlined above, data was collected from 72 New Jersey acute care hospitals for fiscal years ending in 2013, excluding state-owned psychiatric hospitals, comprehensive rehabilitation hospitals, ambulatory surgery facilities and federal military and veteran’s hospitals. The Report also includes historical data from calendar years 2007 to 2013 for comparable purposes. Hospital data was acquired from billing data that is submitted to the state, representing patient claims.
The six-year trend shows that, since 2008, DCC has increased $85.2 million, which equates to 9.3 percent. In 2013 alone, the increase was $26.1 million, which represents 2.6 percent. The Report notes that the variability between the years may be attributable to various market and social forces. Thirty-two of the 72 hospitals reported above $10 million in DCC in 2013, which accounts for 79 percent of all DCC throughout the state. The remaining forty hospitals, representing 56 percent of the respondents, reported a decrease in DCC.
Conclusion
Comparable data for acute care hospitals on a national level is not included in the Report since, although data for uncompensated care on a national level is available, this uncompensated care includes charity care and bad debt. Bad debt cannot be identified and broken out from the total uncompensated care. National data is available for uncompensated care and can be accessed on the American Hospital Association’s (“AHA”) website. The AHA defines uncompensated care as an overall measure of care where no payment was received from the patient or insurer.
Although the Report provides a good picture of where different hospitals stand amongst their peers with respect to DCC, the findings alone should not be used to determine how a hospital compares in total to others in the state. Other factors including, but not limited to, community demographics, Medicaid rate structure, and the organization’s charitable mission need to be taken into consideration.
A copy of the Report can be accessed at: https://www.state.nj.us/health/charitycare/documents/cc_report2013.pdf.
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