NJ funds program to cut high indigent visits to EDs

Trenton, NJ-The state has poured another $520 million into a controversial program designed to keep indigent patients out of hospital emergency departments (EDs) while still paying to provide charity care to the uninsured.

Two years ago, hospitals were permitted to redirect patients away from EDs to lower-cost sources of medical care without incurring patient-dumping penalties. This year, Gov. Christine Whitman is trying to expand the program by building a "managed care network" of low-cost providers, including community clinics and physician practices.

The network will function like a managed care organization with the state acting as a payer by contracting with individual providers, including hospitals. But hospitals will have the responsibility of redirecting patients to lower-cost, non-hospital alternatives.

Beverly Lynch, executive director of the New Jersey chapter of the American College of Emergency Physicians (ACEP) in Trenton, praised the program. "Not only does it hold the potential of reducing indigents visits to the ED. It also redirects their care to appropriate lower-cost options.."

But the hospital industry isn't so jubilant. "The state is giving us the same amount in funding each year but telling us to do more with it. In effect, we're being capitated for the care of the indigent," says Ron Czajkowski, vice president of the New Jersey Hospital Association in Princeton.

The state has empaneled a task force of providers, including ACEP members, to establish criteria for participation and to develop ways to build the network and keep it running efficiently under current and future funding.

In order to participate, hospitals must submit a plan that meets the state's requirements on expected utilization management. Hospitals that are encouraged to participate are those that presently receive at least $500,000 per year in charity care funding. Some 59 out of 83 acute care facilities presently qualify for the program.

Because New Jersey's charity care program is partially federally funded, officials had to obtain a waiver from the Health Care Financing Administration to redirect patients to non-hospital-based providers. "The whole intent of the program is to try to get hospitals to think beyond just EDs," Lynch says.

However, Czajkowski isn't certain the initiative will relieve emergency overcrowding. "There's nothing to suggest that," he says.

The plan also drew fire from union and employer groups because, in the past, state officials were paying for the program out of state unemployment insurance funds. In December, Gov. Whitman signed a law increasing the state's tobacco tax by $ 0.40 per pack to finance charity care and school construction. The law establishes permanent funding for the charity program.