NJ Bill Would Safeguard Taxpayer Dollars At Nursing Homes, Essex Commissioner Board Says

ESSEX COUNTY, NJ — The Essex County Board of Commissioners has thrown its support behind a proposed state law that would beef up financial reporting requirements at nursing homes in New Jersey.

The commissioners unanimously passed a symbolic resolution in support of S1948/A1872 during their board meeting on Wednesday.

If it crosses the finish line, the bill would revise reporting requirements for financial disclosures and ownership structures at nursing homes in the state.

The proposed law has been introduced in the state Senate and Assembly and awaits committee review.

According to a statement from the commissioner board, the bill would help New Jersey to better assess the sufficiency of reimbursement rates – ensuring that taxpayer dollars are directed toward resident care.

Here’s the current situation, the commissioner board explained:

“The state of New Jersey allocates over $2 billion of taxpayer funds to nursing homes annually. According to analyses commissioned by AARP New Jersey and conducted by Full Financials LLC, between 2021 and 2023, New Jersey nursing home owners transferred nearly $2 billion to related parties – companies they own – including $285 million in overpayments, amounts paid beyond the price of comparable services, facilities, or supplies that could be purchased elsewhere. In 2023, 82% of New Jersey nursing homes reported related-party payments exceeding $716 million, with $82 million of excess allowable costs, raising serious concerns about the diversion of taxpayer dollars from resident care to private profit.”

Multiple investigations and reports – including by the New Jersey Office of the State Comptroller, the New Jersey Task Force on Long-Term Care Quality and Safety, and in the Independent Review of New Jersey’s COVID-19 Response – have all called for stronger mechanisms to regulate and monitor nursing home ownership and financial practices, the commissioner board said.

“Poor quality care also remains a persistent issue in New Jersey nursing homes, with the New Jersey Office of Inspector General finding 363 deficiencies in just 20 low-performing facilities during a 2022 audit, including violations related to infection control and emergency preparedness,” the board stated.

“This legislation is an important step toward ensuring public dollars are used lawfully, transparently and effectively,” commissioner Brendan Gill said.

“Our seniors built our communities, and they deserve nothing less than dignity, respect and responsible stewardship of the funds entrusted for their care,” Gill said.

The text of the resolution passed at the board’s Dec. 3 meeting follows below (watch meeting video footage here):

RESOLUTION SUPPORTING THE PASSAGE OF S1948/A1872 REVISING REPORTING REQUIREMENTS OF FINANCIAL DISCLOSURES AND OWNERSHIP STRUCTURES OF NURSING HOMES

WHEREAS, Senate Bill No.1948/Assembly Bill No.1872 would strengthen the reporting requirements for nursing homes concerning financial disclosures and ownership structure; and

WHEREAS, the State of New Jersey allocates over $2 billion of taxpayer dollars to nursing homes each year; and

WHEREAS, analyses commissioned by the AARP New Jersey and conducted by Full Financials, LLC, revealed that between 2021 and 2023, New Jersey nursing home owners transferred nearly $2 billion to related parties – companies they own – including $285 million in overpayments, amounts paid beyond the price of comparable services, facilities, or supplies that could be purchased elsewhere; and

WHEREAS, in 2023, 82% of New Jersey nursing homes reported related-party payments exceeding $716 million, with $82 million of excess allowable costs, raising serious concerns about the diversion of taxpayer dollars from resident care to private profit; and

WHEREAS, under current financial reporting requirements, New Jersey nursing homes do not provide sufficient transparency to determine how funds paid and used related to parties, nor do they ensure that these costs are reasonable and prudent; and

WHEREAS, the use of complex ownership structures, including private equity firms and single-purpose corporations, has enabled nursing home operators to obscure financial realities, underreport profits, and avoid accountability for substandard care; and

WHEREAS, multiple investigations and reports – including those by the New Jersey Office of the State Comptroller, the New Jersey Task Force on Long-Term Care Quality and Safety, and in the Independent Review of New Jersey’s COVID-19 Response – have all called for stronger mechanisms to regulate and monitor nursing home ownership and financial practices; and

WHEREAS, poor quality care remains a persistent issue in New Jersey nursing homes, with the Office of Inspector General (OIG) finding 363 deficiencies in just 20 low-performing facilities during a 2022 audit, including violations related to infection control and emergency preparedness; and

WHEREAS, the proposed legislation S1948/A1872 would require nursing homes to submit audited, consolidated financial statements, including related party transactions, and review by an independent CPA, thereby ensuring accuracy and accountability in the use of public funds; and

WHEREAS, such transparency would enable the State to better assess the sufficiency of reimbursement rates, ensure taxpayer dollars are directed toward resident care, and restore public trust in the long-term care system; now, therefore, be it

RESOLVED, that the Essex County Board of Commissioners hereby expresses its strong support for the passage of legislation S1948/A1872 by the New Jersey State Legislature, and its signing into law by the New Jersey Governor; and be it further

RESOLVED, that copies of this resolution shall be transmitted to the Governor of New Jersey, the President of the New Jersey Senate, the Speaker of the New Jersey General Assembly, the Essex County state legislative delegation, and the New Jersey Attorney General.

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