FILE - NJ Hackensack Meridian Health Palisades Medical Center 4-7-2019

An aerial view shows the the Hackensack Meridian Health Palisades Medical Center on April 7, 2019, in North Bergen, New Jersey.

(The Center Square) – A recent federal government rule change will result in an additional $150 million for New Jersey hospitals.

As part of the $1.9 trillion American Rescue Plan (ARP), a Centers for Medicare and Medicaid Services (CMS) rule change makes the so-called “imputed rural floor” permanent. CMS established the “imputed rural floor,” which adjusts Medicare payments to hospitals based on a wage index, but the policy ended in 2018.

According to the New Jersey Hospitals Association (NJHA), 37 hospitals will receive an additional $146.5 million in fiscal 2022 Medicare inpatient and outpatient Prospective Payment System (PPS) payments.

“The elimination of the imputed floor in 2019 cost New Jersey hospitals millions of dollars in Medicare payments, placing them at a serious disadvantage against other states in attracting healthcare workers,” Cathleen Bennett, president & CEO of NJHA, said in a statement. “The reinstatement of this provision ensures that our state’s hospitals are able to compete on a level playing field to keep these critical caregivers right here in New Jersey.”

The “imputed rural floor” is relevant to New Jersey as it is one of three states CMS has designated as an “all-urban” state based on its geographic size and statewide population. CMS has also designated Delaware and Rhode Island as “all-urban” states.

In a statement, U.S. Sen. Bob Menendez, D-N.J., said, “the injection of millions of dollars in annual federal funding into our hospitals will help them attract and retain the best talent as well continue to provide high-quality care for New Jerseyans.”

Additionally, nine hospitals in Middlesex, Monmouth and Ocean counties will see an additional $3.5 million in fiscal 2022 after CMS applied an “extended transition” to the fiscal 2022 wage index for hospitals that received a 5% transition in fiscal 2021.