"Fair Funding for Vulnerable Residents Act"; establishes direct care ratio requirement for certain providers of services to adults or children with intellectual or developmental disabilities.

A4009

ASSEMBLY, No. 4009

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 5, 2026

Sponsored by:

Assemblyman� ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

Co-Sponsored by:

Assemblyman Azzariti Jr.

SYNOPSIS

���� �Fair Funding for Vulnerable Residents Act�;
establishes direct care ratio requirement for certain providers of services to
adults or children with intellectual or developmental disabilities.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning certain providers
of services to
individuals with intellectual or developmental disabilities and supplementing
Title 30 of the Revised Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� This act shall be known
and may be cited as the �
Fair Funding for Vulnerable
Residents Act.�

���� 2.��� a. As used in this
section:

���� �Department� means the
Department of Human Services.

���� �Commissioner� means the
Commissioner of Human Services.

���� �Provider� means an entity,
licensed by the State, that is responsible for providing services associated
with the operation of a community-based residential program for adults or
children with intellectual or developmental disabilities.

���� b.��� The Commissioner of
Human Services shall establish a direct care ratio requirement for providers
which mandates that at least 70 percent of a provider's aggregate revenue from
State and federal sources in a given fiscal year is expended on the direct care
of residents. �

���� c.���� Providers shall
annually report to the department by October 31 of each year the total revenues
collected by the provider from State and federal sources in the previous fiscal
year, along with the portion of revenues that were expended on direct care
staff wages, other staff wages, taxes, administrative costs, investments in
improvements to the provider's equipment and physical plant, profits, and any
other factors as the commissioner shall require.� Such reports shall be
published on the department�s website and on the website of the Office of the
Ombudsman for Individuals with Intellectual or Developmental Disabilities and
Their Families.� The commissioner shall determine which components under this
report shall be attributed to direct care of residents and use that data to
calculate a provider�s direct care ratio for the applicable fiscal year.� In
making such determination, the commissioner shall consider whether a component
provides a direct benefit to the residents which may include, but is not
limited to, direct care staff compensation, community outings, equipment for
exercise or recreation, furnishings, and maintenance of residential areas.

���� d.���
In
each case where the commissioner determines that a provider�s direct care ratio
fails to comply with the requirement established pursuant to subsection b. of
this section, the provider shall issue a credit to the State in such an amount
that, if subtracted from the provider�s administrative costs and profits for
the non-compliant fiscal year, at least 70 percent of a provider's aggregate
revenue from State and federal sources in that fiscal year would have been
expended on the direct care of residents.� Providers may issue credits to the
State via partial payments, provided that all credits shall be issued in full
by June 30 of the fiscal year following the fiscal year in which the direct
care ratio requirement was not satisfied.

���� e.���� The department shall
ensure that any portion of credits received under this section that represent
federal revenues collected by a provider are returned to the applicable federal
entities.��

���� f.����
The
commissioner or an entity designated by the commissioner may conduct an audit
of the information reported by a provider pursuant to subsection c. of this
section to ensure the accuracy of the information reported and compliance with
the requirements of this section, as well as to identify and recover any credits,
as required under subsection d. of this section.

���� g.��� The commissioner shall
coordinate with all applicable State entities to ensure the implementation of
this section, including:� the Division of Developmental Disabilities in the
Department of Human Services, the Division of Medical Assistance and Health Services
in the Department of Human Services, and the Division of the Children�s System
of Care within the Department of Children and Families.

���� 3.��� The
Commissioner of Human Services shall adopt rules and regulations, pursuant to
the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et
seq.), to effectuate the provisions of this act.

���� 4.��� The
Commissioner of Human Services shall apply for such State plan amendments or
waivers as may be necessary to implement the provisions of this act and to
secure federal financial participation for State Medicaid expenditures under
the federal Medicaid program.

���� 5.��� This act shall take
effect immediately.

STATEMENT

����
This bill, known as the
�
Fair
Funding for Vulnerable Residents Act,�
establishes
a direct care ratio requirement for providers, licensed by the State through
the Department of Human Services (DHS) or the Department of Children and
Families (DCF), that are responsible for providing services associated with the
operation of a community-based residential program for adults or children with
intellectual or developmental disabilities (providers). Specifically, the bill
mandates that at least 70 percent of a provider�s revenue from State and
federal sources in a given fiscal year is expended on the direct care of
residents. As there currently are direct care funding ratio requirements in
other areas, such as nursing home care, the sponsor believes the substantial
public funding for the care of persons with intellectual or developmental
disabilities warrants similar measures to ensure that sufficient funding is
reserved for the direct care of those persons. Press reports and reports issued
by the New Jersey Office of the Ombudsman for Individuals with Intellectual or
Developmental Disabilities and Their Families appear to indicate that some
providers may not be allocating sufficient financial resources for vital direct
care, according to the sponsor.� It is the sponsor's intent that the provisions
of this bill will be applied to providers licensed by either the DHS or DCF.

���� The bill directs providers to report
to the DHS by October 31 of each year the total revenues collected by the
provider from State and federal sources in the previous fiscal year, along with
the portion of revenues that were expended on direct care staff wages, other
staff wages, taxes, administrative costs, investments in improvements to the
provider's equipment and physical plant, profits, and any other factors as required
by the Commissioner of Human Services (commissioner). The bill requires that
these reports are published on the DHS website and on the website of the Office
of the Ombudsman for Individuals with Intellectual or Developmental
Disabilities and Their Families.

���� The commissioner is to determine
which components under this report are attributed to direct care of residents
and use that data to calculate a provider�s direct care ratio.� In making such
determination, the commissioner shall consider whether a component provides a
direct benefit to the residents which may include, but is not limited to,
direct care staff compensation, community outings, equipment for exercise or
recreation, furnishings and maintenance of residential areas.

����
In
each case where the commissioner determines that a provider�s direct care ratio
fails to comply with the provisions of the bill, the provider is required to
issue a credit to the State in such an amount that brings the direct care ratio
into compliance with the bill�s provisions for the applicable fiscal year.�
Providers may issue credits via partial payments, provided that all credits are
required to be issued in full by June 30 of the fiscal year following the fiscal
year in which the direct care ratio requirement was not satisfied.

����
The
bill authorizes the commissioner or an entity designated by the commissioner to
conduct an audit of the information reported by a provider under the bill: to
ensure the accuracy of the information reported and compliance with the direct
care ratio requirement; and to identify and recover any applicable credits.�
The bill also directs the commissioner to coordinate with all applicable State
entities to ensure the implementation of the direct care ratio requirement.