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A4722
ASSEMBLY, No. 4722
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED MARCH 16, 2026
Sponsored by:
Assemblywoman� SHANIQUE SPEIGHT
District 29 (Essex and Hudson)
Assemblywoman� ALIXON COLLAZOS-GILL
District 27 (Essex and Passaic)
Assemblywoman� CARMEN THERESA MORALES
District 34 (Essex)
Co-Sponsored by:
Assemblyman Calabrese, Assemblywomen Park, Haider, Dunn,
Assemblyman Sampson, Assemblywomen Donlon, Peterpaul, Reynolds-Jackson,
Assemblymen Clifton, Scharfenberger, Verrelli, Kearney, Assemblywoman Brennan,
Assemblyman Venezia, Assemblywoman Sweeney, Assemblymen Bhalla, Singh and
Danielsen
SYNOPSIS
���� Revises reporting requirements for nursing homes
concerning financial disclosures and ownership structure.
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
concerning nursing home, amending P.L.2021, c.95, amending and supplementing
P.L.1977, c.237, and supplementing P.L.2021, c.457 (C.26:2H-46.1 et seq.).
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� Section 2 of P.L.2021,
c.95 (C.26:2H-7.25) is amended to read as follows:
���� 2.��� a.� Prior to
transferring ownership of a nursing home, the prospective new owner shall
submit an application to the Department of Health that meets the requirements
of section 3 of this act.� The application shall include the following items:
���� (1)�� the transfer of
ownership fee established by the department;
���� (2)�� a cover letter stating
the applicant's intent to purchase
or acquire
the nursing home, and
identification of the nursing home by name, address, county, and number and
type of licensed beds;
���� (3)�� a description of the
proposed transaction, including:
���� (a)�� identification of
100
percent of
the current owners of the nursing home;
���� (b)�� identification of 100
percent of the proposed new owners, including the names and addresses of all
principals and interested parties; and
���� (c)��
[
if applicable,
]
a copy of
[
an
]
the
applicant�s
organizational chart,
[
including
]
which
shall include
parent
[
corporations
and
]
entities,
wholly-owned subsidiaries
[
;
]
, and
related parties; and
unrelated parties that will or are expected to
provide a service, a facility, or supplies to the nursing home and that will or
are expected to be paid more than $200,000 by the nursing home in the coming
year
; and
���� (4)�� a copy of the agreement
of sale and, if applicable, a copy of any lease
agreements for real property
and
any
management agreements.
����
[
The applicant may additionally
submit a summary of the application materials that includes such details
concerning the application as are required by the department, but that omits
any proprietary information in the contracts for the sale or management of the
nursing home, and any home addresses, social security numbers, or other
personal information of any proposed owner, principal, or interested party.� A
summary prepared by the applicant may only be used for the purposes of posting
information concerning the application on the department's Internet website
pursuant to paragraph (1) of subsection d. of this section.
]
���� b.���
[
Information
submitted pursuant to subsection a. of this section or subsection a. of section
3 of this act by an applicant for transfer of ownership of a nursing home shall
not be used in any adverse licensure action or disciplinary action against the
applicant.
]
(deleted by amendment, P.L.��� , c.��� ) (pending before the Legislature as
this bill)
���� c.���� Approval of a transfer
of ownership of a nursing home is contingent upon:
���� (1)�� a review of the
applicant's history of disciplinary actions assessed in connection with any
other facility owned, operated, or managed by the proposed owners and
principals
both
in New Jersey
and in any other jurisdiction
, and
a determination based on that review that approval of the transfer of ownership
will not present a material risk to the health, safety, or welfare of residents
of the nursing home that is the subject of the transfer application; and
���� (2)�� payment of all
outstanding and issued Medicaid audit claims
, Medicaid overpayments,
and
[
State
]
State-issued
penalties
[
issued
by the department
]
against the current owner, unless such claims remain under appeal, in which
case, if the claim remains under appeal, the applicant shall submit written
verification that either the applicant or the current owners of the nursing
home will assume responsibility for payment of
any
such
[
audit
]
Medicaid
recoveries and
[
State
]
State-issued
penalties at the conclusion of the appeal.
����
(3) In the event that any
Medicaid overpayments are identified after the transfer of ownership occurs,
the prior owner and the new owner shall submit an affidavit to the department
and to the State Comptroller identifying the responsible party for the Medicaid
overpayments.
���� d.��� (1)�
[
A
]
�
The
department shall post on its Internet website no later than 30 days after the
date the department receives the application:
����
(a)�� a
copy of each
transfer of ownership application
[
,
or a summary of the application prepared by the applicant that includes the
names of the proposed owners, principals, and interested parties
]
[
, shall be
published on the department's Internet website no later than 30 days after the
date the department receives the application
]
;
provided that the department shall redact the materials to the extent necessary
to ensure that no proprietary information in the contracts for the sale or
management of the nursing home, and no home addresses, social security numbers,
or other personal information of any proposed owner, principal, or interested
party, is included in the materials published on the department's Internet
website
; and
����
(b)�� a copy of the
applicant�s organizational chart submitted pursuant to subparagraph (c) of
paragraph (3) of subsection a. of this section
.
���� (2)�� Each application for the
transfer of ownership of a nursing home shall be subject to a public comment
period that shall commence not less than 30 days after the date the application
is received by the department, and which comment period shall remain open for a
period of not less than 30 days.� The department shall establish a procedure
for acknowledging receipt of public comments submitted.� The text of comments
submitted on a transfer of ownership application shall not be published on the
department's Internet website, but shall be considered a government record
pursuant to P.L.1963, c.73 (C.47:1A-1 et seq.) or P.L.2001, c.404 (C.47:1A-5 et
al.).
���� e.���� The Department shall
complete review of any transfer of ownership application submitted pursuant to
subsection a. of this section no later than 120 days after the date the
application is received. If a transfer of ownership application has been
reviewed and deemed acceptable, the department shall send an approval letter to
the applicant.
���� f.���� Within five days after
the transaction has been completed, the applicant shall submit to the
department certification of closing from an attorney or a notarized letter from
the applicant stating the date on which the transaction occurred, along with an
executed bill of sale or assignment.� To facilitate the timely transfer of
Medicare and Medicaid provider numbers, the department shall issue the new
license to the applicant no later than 30 days after the date the notice is
received by the department.
���� g.��� No nursing home may
delegate substantial management control of the nursing home's operations to a
third party entity without providing prior written notice to the department.�
The notice provided by the owners of the facility to the department shall include:
���� (1)�� a copy of the management
agreement;
���� (2)�� an organizational chart
of the third party entity's proposed management team for the nursing home
as
well as all parent
entities,
wholly-owned subsidiaries, and
related parties; and unrelated parties to the third party entity that will or
are expected to provide a service, a facility, or supplies to the nursing home
in the coming year and that will or are expected to be paid more than $200,000
by the nursing home in the coming year
;
���� (3)�� the names and addresses
of all owners, principals, and interested parties of the third party entity;
and
���� (4)�� a list of any other
licensed health care facilities owned, operated, or managed by the third party
entity in any state or territory of the United States or in the District of
Columbia for the preceding three years, along with
[
owner-certified
]
owner-certified
financial
[
statements
]
statements
for each such facility for the last three years during which the facility was
owned, operated, or managed by the third party entity.� If the third party
entity owned, operated, or managed facilities located outside New Jersey in the
preceding three years, the application shall include disclosures by the third
party entity of any enforcement actions imposed during that period of time
against any facility owned, operated, or managed by the third party entity in
any jurisdiction.
���� h.��� (1)� Upon request by the
Commissioner of Health and subject to the provisions of P.L.1968, c.266
(C.52:9M-1 et seq.), the State Commission of Investigation shall undertake an
investigation of one or more nursing homes in the State or the entities owning,
operating, or managing one or more nursing homes in the State, provided that,
if the commission determines that the request for an investigation from
Commissioner of Health exceeds the commission's capacity to perform such
investigations, the commission may advise the Commissioner of Health as to any
requests upon which it finds itself unable to proceed.� The State Commission of
Investigation may, at any time, submit to the Governor, the Commissioners of
Health and Human Services, and, pursuant to section 2 of P.L.1991, c.164
(C.52:14-19.1), the Legislature, recommendations for administrative or
legislative action to improve oversight and transparency in nursing homes.
���� (2)�� The State Auditor shall
undertake a review of the oversight of nursing homes by the Department of
Health and the Department of Human Services at least once every three years,
with particular focus on compliance with federal inspection requirements, responses
to complaints and response times in reviewing complaints, and actions taken to
follow up on violations affecting the health, safety, or welfare of residents.
���� i.���� As used in sections 2
through 4 of this act:
����
�Immediate family member�
means a spouse, natural parent, child, sibling, first cousin, aunt, uncle,
adopted child, adoptive parent, stepparent, stepchild, stepsister, stepbrother,
father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law,
daughter-in-law, grandparent, and grandchild.
���� "Interested party"
means any individual or entity with an interest of one percent or more but less
than five percent in an applicant to receive a transfer of ownership of a
nursing home or the land or other real property on which a nursing home is
located.
���� "Principal" means
any individual or entity with an interest of five percent or more in an
applicant to receive a transfer of ownership of a nursing home or the land or
real property on which a nursing home is located.
����
�Related party� means an organization
that, either directly or through contracts with a third party entity exercising
substantial management control over the nursing home, will or is expected to
provide a service, facility, land or other real property, or supplies to a
nursing home that is the subject of a transfer of ownership application, or
that, either directly or through contracts with a third party entity exercising
substantial management control over the nursing home, will or is expected to
otherwise do business with a nursing home that is the subject of a transfer of
ownership application:� in which organization the nursing home, or any proposed
owner or principal of the nursing home, or a third party entity to which
substantial management control over the nursing home is to be delegated or any
owner or principal of the third party entity, has an ownership or control
interest of five percent or more; which is an organization in which an
immediate family member of an owner or principal of the applicant for transfer
of ownership of the nursing home, or an immediate family member of an owner or
principal of a third party entity to which substantial management control over
the nursing home is to be delegated, is an owner or principal; or which organization
is under common ownership or control with the applicant or third party entity,
as defined in 42 CFR s.413.17(b).� �Related party� may include, but shall not
be limited to:� home offices; management organizations; owners of real estate;
entities that provide staffing, therapy, pharmaceutical, marketing,
administrative management, consulting, and insurance services; providers of
supplies and equipment; financial advisors and consultants; banking and
financial entities; and
all parent companies, holding companies, and
sister organizations.
����
�Substantial management
control� means the authority to direct the operation and administration of a
nursing home, including, but not limited to, exercising control or authority
over resident admissions, room assignments, number of beds, staff hiring, staff
scheduling, staff assignments, personnel issues, billing, purchasing, managing
vendor contracts, establishing and enforcing operational protocols and
procedures, resident safety, infection control, communicating with and
reporting to governmental and other entities, and ensuring compliance with
State and federal requirements concerning the operation of the nursing home ;
provided that more than one entity may exercise authority that constitutes
substantial management control.� Regulations adopted pursuant to section 8 of
P.L.��� , c. ���(C.������ ) (pending before the Legislature as this bill) may
identify additional activities that constitute indicia of substantial
management control.
(cf: P.L.2021, c.95, s.2)
���� 2.��� Section 1 of P.L.1977,
c.237 (C.26:2H-32) is amended to read as follows:
���� 1.��� The following words or
phrases, as used in P.L.1977, c.237 (C.26:2H-32 et seq.), shall have the
following meanings, unless the context otherwise requires:
���� a.���� "Nursing
home" means
[
a
facility providing therein nursing care to persons who are sick, invalid,
convalescing, or who have disabilities, in addition to providing lodging and
board or health-related service, or any combination of the foregoing and in
addition thereto, providing nursing care and health-related service, or either
of them, to persons who are not occupants of the facility
]
the same
as is provided in section 1 of P.L.1975, c.397 (C.26:2H-29)
.
���� b.��� "Affiliate"
means (1) with respect to a partnership, each partner thereof; (2) with respect
to a corporation, each officer, director, principal
[
stockholder
]
shareholder
,
or controlling person thereof; (3) with respect to a natural person, (a) each
member of said person's immediate family, (b) each partnership and each partner
thereof of which said person or any affiliate of said person is a partner,
[
and
]
(c) each
corporation in which said person or any affiliate of said person is an officer,
director, principal
[
stockholder
]
shareholder
,
or controlling person
,
and (d) each limited
liability company in which said person or any affiliate of said person is a
member
; and (4) with respect to a limited liability company, each member
thereof
.
���� c.���� "Controlling
person" of any corporation, partnership,
limited liability company,
or other entity means any person who has the ability, directly or indirectly,
to direct or cause the direction of the management or policies of said
corporation, partnership,
limited liability company,
or other entity.
���� d.��� "Immediate family
member
"
[
of
any person includes
]
means
[
each
]
a spouse,
natural
parent, child,
[
spouse,
brother, sister,
]
sibling,
first cousin, aunt
[
and
]
,
uncle
[
of
such person, whether such relationship arises by birth, marriage or adoption,
as well as the person's domestic partner or partner in civil union of that
person as defined in section 3 of P.L.2003, c.246 (C.26:8A-3) or section 2 of
P.L.2006, c.103, (C.37:1-29) and the partner's parent and adult child
]
adoptive
sibling, adoptive parent, stepparent, stepchild, stepsister, stepbrother,
father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law,
daughter-in-law, grandparent, and grandchild
.
���� e.���� "Principal
[
stockholder
]
shareholder
"
of a corporation means any person who beneficially owns, holds or has the power
to vote,
[
10%
]
five
percent
or more of any class of securities issued by said corporation.
����
f.���� "Interested
party" means any individual or entity with an interest of one percent or
more but less than five percent in a nursing home or the land or other real
property on which a nursing home is located.
����
g.��� �Principal� means any
individual or entity with an interest of five percent or more in a licensed
nursing home or the land or real property on which a nursing home is located
.
����
h.��� �Related party� means
an organization, either directly or through contracts with a third party entity
exercising substantial management control over the nursing home, providing a
service, facility, land or other real property, or supplies to a nursing home,
or otherwise doing business with the nursing home either directly or through
contracts with a third party entity exercising substantial management control
over the nursing home:� in which organization the nursing home, or any owner or
principal of the nursing home, or a third party entity exercising substantial
management control over the nursing home or any owner or principal of the third
party entity, has an ownership or control interest of five percent or more;
which is an organization in which an immediate family member of an owner or
principal of the nursing home, or an immediate family member of an owner or
principal of a third party entity exercising substantial management control
over the nursing home, is an owner or principal; or which organization
is
under common ownership or control with the nursing home or third party entity,
as defined in 42 CFR s.413.17(b).� �Related party� may include, but shall not
be limited to:� home offices; management organizations; owners of real estate;
entities that provide staffing, therapy, pharmaceutical, marketing,
administrative management, consulting, and insurance services; providers of
supplies and equipment; financial advisors and consultants; banking and
financial entities; and all parent companies, holding companies, and sister
organizations.
����
i.���� �Substantial
management control� means the
authority to direct the operation and
administration of a nursing home, including, but not limited to, exercising control
or authority over resident admissions, room assignments, the number of beds,
staff
hiring, staff scheduling, staff assignments, personnel issues, billing,
purchasing, managing vendor contracts, establishing and enforcing operational
protocols and procedures, resident safety, infection control, communicating
with and reporting to governmental and other entities, and ensuring compliance
with State and federal requirements concerning the operation of the nursing
home; provided that more than one entity may exercise authority that
constitutes substantial management control.� Regulations adopted pursuant to
section 8 of P.L.��� , c.� ��(C.������ ) (pending before the Legislature as
this bill) may identify additional activities that constitute indicia of
substantial management control.
����
j.���� �Private equity
fund� means an investment vehicle that includes, but is not limited to, limited
partnerships or other limited liability vehicles that invest in the assets,
equity, or debt of a nursing home.
(cf: P.L.2017, c.131, s.97)
���� 3.��� Section 2 of P.L.1977,
c.237 (C.26:2H-33) is amended to read as follows:
���� 2.��� Every nursing home
operating in the State shall, within
[
90
]
165
days
after the end of its fiscal year, file an annual report with the
[
State
]
Commissioner
of Health
, which report shall be immediately transmitted by the commissioner
to the State Comptroller upon receipt
.� Such annual report shall be in such
form and shall contain such information as shall be prescribed by the
commissioner
in consultation with the State Comptroller
,
[
including
]
and shall
include, at a minimum,
the following:
���� a.����
[
A balance
sheet of the nursing home as of the end of such fiscal year, setting forth
assets and liabilities at such date including all capital, surplus, reserve,
depreciation and similar accounts;
]
A balance sheet of the nursing home as of the end of such fiscal year,
setting forth assets, liabilities, and equity in accordance with notices and
regulations issued or adopted pursuant to sections 8 and 9 of P.L.��� , c.���
(C.������� and C.������� ) (pending before the Legislature as this bill), as
applicable, at such date including all capital, surplus, reserve, depreciation
and similar accounts;
���� b.���
[
A statement of
operations of the nursing home for such fiscal year, setting forth all
revenues, expenses, taxes, extraordinary items and other credits or charges;
]
A
statement of operations of the nursing home for such fiscal year, setting forth
all revenues, expenses, taxes, and other credits or charges, provided that:
����
(1)�� expenses shall be
itemized to include amounts for each of the following:
����
(a)�� each lease payment,
including the term of the lease, on any part of the land or buildings occupied
by the nursing home and any other fees charged by the lessor;
����
(b)�� any loans or
equipment leases in excess of $10,000 and the interest rate and any fees
charged by the lender or lessor; and
����
(c)�� any contract in
excess of $10,000 per year for any service, including, but not limited to,
management, consulting, operations, leasing, staffing, dietary, laundry,
physical therapy, occupational therapy, nursing, aides, billing, infection
control, environmental, and maintenance services; and
����
(2)�� if the nursing home
has a mortgage on the land or building it occupies, or both, it shall provide
the name and address of the mortgagee, along with the amount, term, and
interest rate on the mortgage and any other fees the mortgagee charges to the
nursing home.
����
For the purposes of this
subsection, the information required under paragraph (1) and paragraph (2) of
this subsection may be presented in supplemental schedules subject to the
auditing procedures applied in the audit of the financial statements;
���� c.���� The name and address of
each of the following persons:
���� (1)� The operator of the
nursing home;
���� (2)� Any person who, directly
or indirectly, beneficially owns any interest in the land on which the nursing
home is located;
���� (3)� Any person who, directly
or indirectly, beneficially owns any interest in the building in which the
nursing home is located;
���� (4)� Any person who, directly
or indirectly, beneficially owns a
[
10%
]
five
percent
or greater interest in any mortgage, note, deed of trust
,
or
other obligation secured in whole or in part by the land on which or building
in which the nursing home is located;
���� (5)� Any person who directly
or indirectly, has any interest as lessor or lessee in any lease or sublease of
the land on which or the building in which the nursing home is located;
���� (6)� Any person who, directly
or indirectly, beneficially owns a
[
10%
]
five
percent
or greater interest in any mortgage, note, deed of trust
,
or
other obligation which, although not secured by the land on which or building
in which the nursing home is located, is considered an outstanding liability on
the books of the nursing home and was executed to finance directly or
indirectly the purchase of the nursing home, land, building, lease
,
or
sublease pertaining thereto;
����
(7)� Any person who owns or
operates a related party to the nursing home or who is a principal, a member of
the board of trustees, or a member of the board of directors of the nursing
home; and
����
(8)�� Any person who has an
ownership interest of five percent or more in a private equity fund that is
invested in the nursing home;
���� d.��� If the nursing home or
any person named in response to subsection c.
, h., or i. of this section
is a partnership, then the name and address of each partner;
���� e.����
(1)
� If the
nursing home or any person named in response to subsection c.
, h., or i. of
this section
is a corporation, other than a corporation whose shares are
traded on a national securities exchange or a commercial bank, savings bank
,
or savings and loan association, then the name and address of each officer,
director, principal shareholder
,
and controlling person of such
corporation;
����
(2)� If the nursing home or
any person named in response to subsection c., h., or i. of this section is a
limited liability company, then the name and address of each member;
���� f.���� If any corporation
named in response to subsection c.
, h., or i. of this section
is a
corporation whose shares are traded on a national securities exchange or which
is a commercial bank, savings bank
,
or savings and loan association,
then the name and address of the principal executive officers and each
director, principal
[
stockholder
]
shareholder,
and controlling person of said corporation;
���� g.��� If the nursing home paid
or received an aggregate of
[
$2,500.00
]
$10,000
or more during the fiscal year in connection with transactions with any person
named in response to subsections c., d., e., or f., or any affiliate of said
person, a description of the transactions, naming the parties thereto and
describing the relationships which require the transactions to be described and
the goods, services, payment
,
or other consideration received by each
party to the transactions
;
����
h.��� Information
identifying 100 percent of the current owners of the nursing home, including
all principals and interested parties;
����
i.���� Information
identifying 100 percent of the current owners of any third party entity
exercising substantial management control over the nursing home, including all
principals and interested parties and including 100 percent of the owners,
principals, and interested parties in any third party entity identified as a
principal or interested party in the third party entity exercising substantial
management control over the nursing home;
����
j.���� A copy of the
nursing home�s organizational chart and an organizational chart for any
third-party entity exercising substantial management control over the nursing
home, which organizational chart shall include, as applicable:�
����
(1)�� parent entities and
wholly-owned subsidiaries;
����
(2)�� related parties; and
����
(3)�� unrelated parties
that provided a service, a facility, or supplies to the nursing home in the
annual fiscal period that were paid more than $200,000 by the nursing home in the
annual fiscal period;
����
k.��� An owner-certified
financial statement encompassing
the nursing home, any third party
entity exercising substantial management control over the nursing home, any
person described in paragraphs (2) through (6) of subsection c. of this section,
for whom the information provided in the owner-certified financial statement
shall be limited to the person�s interest in the nursing home for which
reporting is required pursuant to paragraph (2), (3), (4), (5), or (6) of
subsection c. of this section, as applicable, and each related party.� The
owner-certified
financial statement required under this subsection
shall meet the
following requirements:
����
(1)�� the
owner-certified
financial
statement shall be prepared in accordance with
generally accepted accounting principles in effect as of the date of the filing
and
audited by a certified public accountant in
accordance with the generally accepted accounting standards in effect as of the
date of the filing
; and
����
(2)�� the owner-certified
financial statement shall be submitted in accordance with the requirements of
this section and any notices and regulations issued or adopted in accordance
with sections 8 and 9 of P.L.��� , c.��� (C.������ and C.������ ) (pending
before the Legislature as this bill), as applicable, and shall
include:
����
(a)�� a balance sheet
detailing the assets, liabilities, and equity at
the end of the
reporting entity�s fiscal year;
����
(b)�� a statement
of
revenues,
expenses, and operating surplus or deficit for the annual fiscal period;
����
(c)�� a statement of
changes in equity;
����
(d)�� a statement detailing
patient charges by payer, including, but not limited to, Medicare, NJ
FamilyCare, and other payers, by revenue center;
����
(e)�� a statement of cash
flows, including, but not limited to, ongoing and new capital expenditures and
depreciation;
����
(f)�� a combined financial
statement that includes all entities reported in the owner-certified financial
statement, unless the reporting entity is prohibited from including a combined
financial statement in
an owner-certified financial statement pursuant
to State or federal law or regulation or national accounting standard, in which
case the reporting entity shall disclose to the department the applicable State
or federal law or regulation or national accounting standard; and
����
(g)�� additional
information, data, and documents related to receipts and expenditures by
nursing homes as may be required by notices and regulations issued or adopted
pursuant to sections 8 and 9 of P.L.��� , c.��� (C.������� and C.������� )
(pending before the Legislature as this bill), as applicable; and
����
l.���� A copy of any lease
agreements for the nursing home�s use of land, buildings, facilities, or other
real property.
����
m.�� Any nursing home, or
authorized agent of a nursing home, that files an annual report pursuant to
this section, shall certify under penalty of perjury that the information
provided is accurate and complete.� All information provided pursuant to this
section shall be deemed a public record.
(cf: P.L.1977, c.237, s.2)
���� 4.��� (New section)� For the
purposes of P.L.2021, c.457 (C.26:2H-46.1 et seq.), �owner-certified financial
statement� means an owner-certified financial statement that meets the
requirements of subsection k. of section 2 of P.L.1977, c.237 (C.26:2H-33).�
For the purposes of this section, the definitions set forth in section 1 of
P.L.1977, c.237 (C.26:2H-32) are incorporated by reference.
���� 5.��� Section 4 of P.L.1977,
c.237 (C.26:2H-35) is amended to read as follows:���
���� 4.���
a.
� Any person,
firm, association, partnership
,
or corporation who fails to
[
file a
statement as required by this act
]
comply with the requirements of P.L.1977, c.237 (C.26:2H-32 et seq.)
or
willfully files a false statement
[
shall
]
may
be
liable to a penalty of
[
not
less than $10.00 nor more than $100.00
]
up to $200
for each day that such failure continues or such false
statement remains uncorrected. The penalties prescribed and authorized by this
act shall be recovered in a summary civil proceeding brought in the name of the
State in the Superior Court pursuant to
[
"the
penalty enforcement law" (N.J.S.2A:58-1 et seq.)
]
�Penalty Enforcement Law of
1999,� P.L.1999, c.274 (C.2A:58-10 et seq.)
.
����
b.��� In addition to the
penalties provided in subsection a. of this section, the Department of Health
may curtail the admissions for new residents in the case of a person, firm,
association, partnership, or corporation who fails to comply with the
requirements of P.L.1977, c.237 (C.26:2H- 32 et seq.) or willfully files a
false statement, which curtailment may continue until corrective action is
taken by the violator and approved by the department.
(cf: P.L.1991, c.91, s.288)�
���� 6.��� (New section) a.� In the
event a nursing home is under common ownership with one or more other nursing
homes, the common owner shall submit one owner-certified financial statement
pursuant to section 2 of P.L.1977, c.237 (C.26:2H-33) that consolidates the
financial data across all nursing homes and related parties that are a part of
that common ownership, which statement shall include the information required
by subsection k. of section 2 of P.L.1977, c.237 (C.26:2H-33) for each nursing
home under common ownership.
���� b.��� A nonprofit nursing home
that files a copy of its most recent Internal Revenue Service Form 990 Public
Inspection Copy with the Department of Health and the State Comptroller may be
deemed, in accordance with notices and regulations adopted pursuant to sections
8 and 9 of P.L.��� , c. ���(C.���� and C.������� ) (pending before the
Legislature as this bill), as applicable, to have satisfied all or part of the
requirements of an owner-certified financial statement set forth under section
2 of P.L.1977, c.237 (C.26:2H-33).
���� 7.��� (New section)� The State
Comptroller, in consultation with the Department of Health and the Department
of Human Services, shall be authorized to monitor, review and audit
owner-certified financial statements in accordance with P.L.2005, c.119 (C.
52:15B-1 et seq.), P.L.2007, c.52 (C.52:15C-1 et seq.), and the �Medicaid
Program Integrity and Protection Act,� P.L.2007, c.58 (C.30:4D-53 et seq.).�
The State Comptroller may obtain information and testimony, issue reports, make
referrals, and coordinate with and require the cooperation of State agencies in
the same manner as permitted by P.L.2005, c.119 (C.52:15B-1 et seq.), P.L.2007,
c.52 (C.52:15C-1 et seq.), and the �Medicaid Program Integrity and Protection
Act,� P.L.2007, c.58 (C.30:4D-53 et seq.).
���� 8.��� (New section)� a.� The
Commissioner of Health, in consultation with the State Comptroller, shall
promulgate rules and regulations, pursuant to the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as the commissioner
deems necessary to effectuate the purposes of this act.
���� b.��� The State Comptroller,
in consultation with the Commissioner of Health and pursuant to the
�Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), shall
promulgate rules and regulations setting forth the requirements of
owner-certified financial statements as may be necessary to implement the
provision of this act.
���� 9.��� (New section)�
Notwithstanding the provisions of section 9 of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill), the Commissioner of Health and
the State Comptroller may issue notices to interested parties to implement the
provisions of P.L.��� , c.��� (C. )
(pending before the Legislature as this bill), which notices shall be valid for
no more than one year from the effective date of sections 1 through 8 of
P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill),
provided that such interested parties are provided with notice of at least 30
days of the intent of either the Commissioner of Health or the State
Comptroller to issue such notice.
���� 10.� This act shall take
effect 90 days after the date of enactment, except that section 9
of this
act shall take immediately.
STATEMENT
���� This bill revises the
reporting requirements for transfers of nursing home ownership and assignments
of substantial management control over a nursing home to a third party entity.
���� Specifically, the bill
requires nursing home owners and operators, as well as applicants for a
transfer of ownership of a nursing home and third party entities exercising
substantial management control over the nursing home, to provide an
organizational chart identifying:� parent entities and wholly-owned
subsidiaries; principals that provide a service, facility, or supplies to the
nursing home; and unrelated parties that provide a service, facility, or
supplies to the nursing home that are paid $200,000 or more by the nursing
home.� In the case of an applicant for a transfer of ownership of a nursing
home, these disclosures will be based on expectations with regard to services,
facilities, supplies, and payments.�
���� For applications for transfer of ownership of a
nursing home, the organizational chart is to be posted on the Department of
Health�s (DOH�s) Internet website, along with a copy of the transfer of
ownership application, which is currently required to be posted on the DOH�s
website.
���� The bill removes a current provision of law that
allows applicants for transfers of ownership to prepare and submit a summary of
the application information that omits proprietary information and can be used
for public disclosure purposes.� The bill additionally removes a provision of
current law that provides nothing in a transfer of ownership application may be
used in an adverse licensure or disciplinary action against the applicant.
���� The bill revises the current requirements for approval
of a transfer of ownership application to provide that approval is contingent
on review of the applicant�s history of disciplinary actions involving
facilities owned, operated, or managed by the applicant in both New Jersey and
in any other jurisdiction; under current law, this review is limited to New
Jersey facilities.� Under current law, approval is additionally conditioned on
payment of outstanding and issued Medicaid audit claims and penalties issued by
the Department of Health (DOH); the bill adds as a condition of approval that
there be payment of all Medicaid overpayments, and requires payment of any
State-issued penalty, not just those issued by the DOH.� The amended bill
further specifies that, if any Medicaid overpayments are identified after the
transfer of ownership occurs, the new owner will be required to submit an
affidavit to the DOH and to the State Comptroller identifying the responsible
party for the overpayments.
���� The bill revises the mandatory components of the
annual reports nursing homes are required to submit to the DOH to additionally
require balance sheets include information concerning equity, and statements of
operations include specifically itemized expenses related to leases of land,
buildings, and equipment, loans of equipment, and contracts in excess of
$10,000 per year for any service, as well as details concerning any mortgagee
for the land or building used by the nursing home.� The reporting requirements
will also include information concerning the owners and operators of related
parties to the nursing home and entities other than a nonprofit organization
that have an ownership interest of five percent or more in a private equity
fund that is invested in the nursing home.
���� The bill revises the threshold for reporting certain
interested party transactions from $2,500 per year to $10,000 per year. The
bill further requires enhanced disclosure of the owners and principals of the
owners, management companies, and related parties to a nursing home, including
the owners and principals of holding and parent companies and subsidiaries, as
well as limited liability companies.�
���� The bill further revises the current financial
disclosures required for nursing home owners and operators, to require the
submission of an owner-certified financial statement that:
���� 1)��� is reviewed or audited by a certified public
accountant and performed in accordance with generally accepted accounting
principles in effect the day the application or statement is submitted; and
���� 2)��� includes:� a balance sheet detailing the assets,
liabilities, and equity the end of the reporting entity�s fiscal year; a
statement of income, expenses, and operating surplus or deficit for the annual
fiscal period; a statement of changes in equity; a statement detailing patient
revenue by payer, including, but not limited to, Medicare, NJ FamilyCare, and
other payers, and revenue center; a statement of cash flows, including, but not
limited to, ongoing and new capital expenditures and depreciation; a combined
financial statement that includes all entities reported in the owner-certified
financial statement; and any other information, data, and documents as may be
required by the Commissioner of Health or the State Comptroller.�
���� The bill specifies that an owner-certified financial
statement required under P.L.2021, c.457 (C.26:2H-46.3 et seq.) is to meet the
requirements for owner-certified financial statements established under the
bill.�
���� The bill further specifies that a health care system
consisting of more than one nursing home will be required to submit
owner-certified financial statements that consolidate the financial data across
all nursing homes that are a part of that health care system, together with a
statement of operations or income with respect to each nursing home in the
health care system, which statements of operations or income may be submitted
in a supplemental schedule.� A nonprofit nursing home that files a copy of its
most recent Internal Revenue Service Form 990 Public Inspection Copy with the
DOH and the State Comptroller, and a nursing home that files with the DOH and
the State Comptroller a cost report with an audited financial statement that
has been submitted to the federal Centers for Medicare and Medicaid Services,
may each be deemed to have satisfied all or part of the requirements of an
owner-certified financial statement established under the bill.
���� For applicants for a transfer of ownership and
entities seeking to delegate management of a nursing home, this information
will be included with certain materials that current law requires be provided
to the Department of Health (DOH).� The bill expands the disclosure
requirements under current law to additionally reference limited liability
companies, which will be required to make the required disclosures for each
member of the limited liability company.
���� The bill revises a current requirement for nursing
homes to submit certain information to the DOH within 90 days after the end of
the fiscal year to require the information be submitted 150 days after the end
of the fiscal year.� The DOH will be required to immediately transmit submitted
nursing home reports to the State Comptroller.� All information submitted under
the bill with regard to transfers of ownership, annual reporting, and
delegations of substantial management control, is to be certified under penalty
of perjury that the information is accurate and complete.� All information
submitted will additionally be deemed a public record.�
���� The bill revises the current penalties that apply for
failure to make a required report or for submitting false information.� Current
law authorizes a civil penalty of $10 to $100 per day for each day the report
is not filed or corrected.� The bill revises the civil penalty to up to $200
per day, makes the penalties discretionary, and authorizes the DOH to curtail
resident admissions to the nursing home.
���� The bill provides that the State Comptroller, in
consultation with the DOH and the Department of Human Services, will be
authorized to monitor, review and audit owner-certified financial statements in
accordance with certain existing statutory authorities, and will be authorized
to obtain information and testimony, issue reports, make referrals, and
coordinate with and require the cooperation of State agencies in the same
manner as permitted under those existing statutory authorities.
���� The bill grants the DOH and the State Comptroller
express authority to promulgate rules and regulations to implement the bill,
and the authority to issue temporary notices to implement the bill, which
notices will be valid for no more than one year after the date the bill is
enacted.