Before the switch, hospitals were paid based on what services they provided in the 1980s.
The state would still dole out $400 million a year for Medicaid, the health insurance program for the poor.
The New Jersey Hospital Association says institutions with mental health programs would lose the most.
The hospital association says the funding change should not happen this year because many of the hospitals are facing severe budget crunches.
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Information from: The Star-Ledger, http://www.nj.com/starledger
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