Medicaid DSRIP in New Jersey: Trade-offs between Broad Hospital Participation and Safety Net Viability

The Delivery System Reform Incentive Payment (DSRIP) program, an increasingly utilized payment strategy to foster population health management by hospitals and outpatient providers, may sometimes generate financial and operational hardships for safety net hospitals (SNHs). The authors utilized a hospital survey and stakeholder interviews to examine impacts of the New Jersey DSRIP program, particularly focusing on its participatory structure that extended eligibility to all hospitals, and specific effects on SNHs. They found that the New Jersey DSRIP fulfilled its primary objective of conditioning receipt of Medicaid supplementary payments on quality and reporting of care by hospitals. It also provided an impetus to ongoing hospital-directed initiatives and introduced new areas of focus, including behavioral health and obesity. However, stakeholders reported that program implementation was not sensitive to specific constraints, priorities, and resource needs of SNHs. Some of the policies relating to outpatient partnerships, reporting of quality metrics, and monitoring low-income populations were perceived to have placed disproportionate burdens on SNHs. Despite appearing to meet its primary goals, the New Jersey DSRIP experience reveals a critical need to be responsive to problems faced by SNHs so as to limit their short-term transition costs and maintain financial viability for serving their patient populations.