NMH SENDS TERMINATION LETTER TO HORIZON

April 22, 2008  

Newton Memorial Hospital regrettably announces that it sent a letter on Tuesday, April 22, to Horizon Blue Cross/Blue Shield, notifying them that Newton Memorial Hospital intends to terminate its contract with Horizon.

Under terms of the current contract, however, Newton Memorial is currently “in network” with Horizon. The Hospital will continue in good faith to negotiate rate adjustments in order to sustain high quality care and accessibility to modern and efficient health care facilities for the patients in the community it serves.

The current contract states that those who subscribe to Horizon will still be able to utilize their “in-network” benefits at Newton Memorial Hospital for 90 days, until July 22, 2008. Even after July 22, 2008, Horizon enrollees may continue to come to Newton Memorial Hospital to receive “out-of-network” services. However, reimbursements for the types of services enrollees receive may depend on their individual health plan arrangement.

Patients who have HMO coverage will remain “in-network” for four months after the termination of the contract until on or about November 22. Anyone who uses Medicare as their primary insurance company and Horizon as their secondary will not be affected by the termination.

Newton Memorial Hospital has created a special Information Hotline for Horizon patients. Please call (973) 940- 8118 during regular business hours with any questions. All calls will be returned within 24 hours of the next business day. Updates will also be posted regularly at www.nmhnj.org.

“Our mission is to continue to provide exceptional care and service to this community,” Newton Memorial Hospital President & CEO Tom Senker said. “We take great pride in knowing that our patients entrust us with their care. Please be assured that Newton Memorial Hospital will do everything possible to reach an agreement with Horizon. Our priority is protecting this community asset for many years to come.”

FACTS AND FIGURES

• 21 hospitals have closed since 1992; 7 since 2007; and 3 more are expected to close;
  

• 60 percent of NMH patients are covered by Medicare, Medicaid and Charity Care or are uninsured. State and federal payments do not cover the cost of providing the service and the cuts are getting deeper;
  

• NJ mandates that hospitals provide Charity Care services but hospitals never receive adequate reimbursements for services provided. Gov. Jon S. Corzine has proposed cutting this program even further;
  

• NMH Financial position positive in ’04; marginally positive in 05-06; $5 million loss for ’07; and $1.7 budgeted loss for ’08;
  

• What happened? Combo of Medicare cuts, Medicaid cuts ($3 million in Partial Mental Health funding), outpatient business decline and capital projects ( Heart Center, ED, Cerner system, all of which enhance the community’s access to care).
  

• Focused internally on efficiency, streamlining operations through Operations Improvement Plan and reducing labor costs (6% of budgeted full-time equivalents eliminated);
  

• Now, we’re attempting to negotiate rate adjustments with private insurance companies in order to sustain high quality care and accessibility to modern and efficient health care facilities for the communities we serve;
  

• We are continuing to negotiate in good faith with all our third party payers. There is the possibility of termination of the Hospital’s participation in contracts with some commercial payers. The community, however, can expect continued delivery of quality health care; and
  

• NMH is dedicated to protecting this community asset for years to come.