Medicare Is Cutting Payments to 54 NJ Hospitals. Is Yours On the List?

Federal officials are cutting Medicare payments to hospitals with higher-than-expected readmission rates. The cuts don’t directly raise patients’ bills, but they could affect hospital services.

More than 50 New Jersey hospitals face cuts to their Medicare payments this fiscal year over how often patients return after being discharged.

The federal Centers for Medicare & Medicaid Services (CMS) imposed the penalties under its Hospital Readmissions Reduction Program, which took effect October 1, according to a Patch analysis. The largest is at CarePoint Health-Bayonne Medical Center, at 1.81%. Nine of the 54 face cuts of 1% or more. 

The cuts don’t directly raise patients’ hospital bills or out-of-pocket costs. Instead, they could place financial pressure on hospitals, potentially affecting services and operations.  

Here’s how the penalty works.

How the Penalty Works

The program lowers Medicare’s base payments for inpatient stays at hospitals with higher rates of patients returning within 30 days of discharge. 

It measures six conditions and procedures: heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease (COPD), coronary artery bypass graft surgery, and elective hip or knee replacement.

CMS compares each hospital’s readmission rate with an expected rate based on its patients’ clinical risks, including age, medical history, and other health conditions. It also adjusts for each hospital’s share of patients enrolled in both Medicare and Medicaid. Patch notes that those adjustments don’t eliminate the influence of socioeconomic barriers on readmissions. The penalties apply only to payments for traditional Medicare inpatient care.

How New Jersey Compares

Nationally, 2,334 hospitals face penalties in fiscal 2027—about 80% of those evaluated. Ten face the maximum 3% reduction, and 244 face cuts of at least 1%, up from 240 last year. The highest cut in New Jersey is 1.81%.

This year’s evaluation covers discharges from July 1, 2023, through June 30, 2025—a two-year window shortened from three years. It’s also the first year CMS counted data from both traditional Medicare and Medicare Advantage, the privately administered alternative. Penalties still only apply to traditional Medicare payments.

Here are the affected New Jersey hospitals, by region.

North Jersey

26 North Jersey hospitals face cuts, led by CarePoint Health–Bayonne Medical Center at 1.81% and Saint Clare’s Hospital in Denville at 1.60%.

Central Jersey

17 Central Jersey hospitals face cuts, led by Capital Health Medical Center–Hopewell at 1.44% and Robert Wood Johnson University Hospital in New Brunswick at 1.42%. 

South Jersey

Eleven South Jersey hospitals face cuts, led by Jefferson Stratford Hospital at 1.32% and West Jersey Hospital in Voorhees at 0.94%. 

Staff

The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.

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