New Jersey’s hospitals could be forced to shoulder an additional $120 million in Medicare cuts next year under a federal budget proposal put out by the Centers for Medicare and Medicaid Services, within the Department of Health and Human Services.

The looming cut is grim news for hospitals and their patients. New Jersey hospitals are already slated to lose $4.5 billion in federal funds over the next 10 years in the sweeping healthcare reform law. Plus, Medicare currently pays New Jersey hospitals at a rate of just 91 percent of their costs for caring for the state’s senior citizens. The proposed cuts for 2011 will further undercut those already inadequate rates and jeopardize hospital jobs, services and continued access to healthcare services in our state.

NJHA is working hard to oppose these proposed cuts, which will take effect Oct. 1 unless CMS changes its proposal. As part of national health care reform, our nation’s hospitals agreed to cuts totaling $154 billion over a 10- year period. The hospital community believes that we need to be part of the solution to move national healthcare reform forward, but the $120 million in additional cuts was not contemplated for New Jersey hospitals. These cuts would fundamentally harm our state’s hospitals.

The healthcare reform cuts are sealed in law, but the proposed rate cuts for 2011 must still be approved by CMS. NJHA is airing its concerns directly with CMS and also is working closely with members of the state’s congressional delegation to encourage CMS to amend the proposal and blunt the impact on hospitals. We are also working very closely with our national association, the American Hospital Association, to ensure these cuts are not enacted. The N.J. hospital community’s financial woes have been well-documented: 10 New Jersey hospitals have closed in the last five years, and six have filed for bankruptcy. Of the 73 acute care hospitals that remain in the state, about 40 percent are losing money.

Additional cuts could force struggling hospitals to cut services or close altogether, further eroding access to healthcare services for the state’s residents. That is not reform, that is just plain wrong.