"Intellectual and Developmental Disabilities Provider Transparency and Financial Accountability Act."

S4387

SENATE, No. 4387

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 1, 2026

Sponsored by:

Senator� JOHN F. MCKEON

District 27 (Essex and Passaic)

Co-Sponsored by:

Senator Diegnan

SYNOPSIS

���� �Intellectual and Developmental Disabilities Provider
Transparency and Financial Accountability Act.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning direct support professionals 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 �Intellectual and Developmental
Disabilities Provider Transparency and Financial Accountability Act.�

���� 2.� As used in this act:

���� �Administrative costs� means
expenses related to the general management and administration of a provider
agency, including but not limited to executive salaries, legal fees, marketing,
lobbying, and central office expenses.

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

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

���� �Direct care ratio� means staffing
standards that limit the number of individuals with intellectual or
developmental disabilities a direct support professional can provide services
to at one time and measure the amount of direct care hours provided per individual
in a given time period.

���� �Direct support professional�
means a person employed by a provider managed residence or program whose
primary job responsibility is to provide support, care, and services directly
to individuals with intellectual or developmental disabilities.

���� �Provider managed residence
and program� means a residence, facility, or program that is managed by an
individual, entity, or business concern that is licensed, certified, or
otherwise authorized by the department to provide services to individuals with
developmental or intellectual disabilities.

���� �Related-party transaction�
means any business arrangement between a provider managed residence or program
and an entity in which the residence and program�s board members, executives,
or their immediate family members have a financial interest.��� �Standardized chart
of accounts� means a uniform listing of financial reporting categories developed
by the department to ensure consistent data collection across all provider
managed residences and programs.

���� 3.� a. Within 180 days of the
effective date of this act, the commissioner, in consultation with the State Comptroller,
shall develop, and require every provider managed residence and program to
submit, a standardized chart of accounts, disaggregated by each residence and
program, which shall include, in separate line items, at a minimum, the
following information:

���� (1) base wages, overtime pay, special
pay for special or extra work paid, fringe benefits earned, and payroll taxes
paid by provider managed residences and programs for direct support
professionals;

���� (2) salaries and bonuses for
the five highest-compensated employees of the provider managed residence and
program and the total compensation package for any executive earning more than
$150,000 annually, including base salary, bonuses, deferred compensation, and
fringe benefits;

���� (3) provider managed residence
and program costs, including, but not limited to, capital investments, mortgage
payments, rent, utilities, insurance, and taxes;

���� (4) related-party transaction
costs; and

���� (5) Expenses related to
marketing, advertising, public relations legal, consulting, and lobbying
services.

���� b.� (1) Beginning on the first
day of the fiscal year following the development of the standardized chart of accounts,
every provider managed residence and program receiving more than $250,000
annually in State and federal funds to provide services to individuals with
developmental or intellectual disabilities shall submit a quarterly expenditure
report to the department with the information included in the standardized
chart of accounts pursuant to subsection a. of this section.

���� (2) Each quarterly expenditure
report shall also include an attestation from the provider managed residence
and program�s chief financial officer confirming the information contained in
the report is accurate.� Failure to submit a report as required in accordance
with paragraph (1) of this subsection within 30 business days of the end of the
quarter may result in the department withholding up to 10 percent of the residence
and program�s monthly reimbursement until the report is filed.

���� c.� The commissioner shall
submit copies of the standardized chart of accounts and quarterly expenditure
reports submitted by provider managed residence and program pursuant to
subsections a. and b. to the State Comptroller no later than 30 business days
after the receipt of the charts and expenditure reports in order that the State
Comptroller conduct the financial audits required pursuant to section 5 of this
act.

���� 4.� a.� Every provider managed
residence and program shall file an annual disclosure statement with the commissioner
identifying all related-party transactions involving State or federal funds. �The
statement shall include the names of the parties involved, the nature of the
transaction, and the total dollar amount exchanged.

���� b.� The provider managed
residence and program shall file the annual disclosure statement within six
months following the end of the residence and program�s fiscal year.

���� 5.� a.� The State Comptroller
shall conduct annual financial audits, in accordance with prevailing national
and professional standards, rules, and practices relating to such audits, of no
less than five percent of provider managed residences and programs to verify
the accuracy of the information submitted by the residences and programs
pursuant to section 3 of this act.

���� b.� If the State Comptroller
determines that the audits conducted pursuant to subsection a. of this section
contains material misrepresentations, the State Comptroller may direct the
department to initiate proceedings to suspend or revoke the provider managed
residence and program�s license or certification, if applicable, or impose a
civil penalty against the residence and program.

���� 6.� a.� The department shall
create, maintain, and make publicly available, a provider managed residence and
program transparency Internet-based web portal, which shall be fully
operational within 12 months of the effective date of this act.�

���� b.� The web portal shall
aggregate the information submitted by every provider managed residence and
program pursuant to section 3 this act to:

���� (1) allow the public to search
and view such information in one place; and

���� (2) assist the public to
compare the total revenue spent on direct care and direct support professional
wages and administrative costs and expenditures incurred by different
residences and programs.

����

���� 7.� Three years following the
development of the standardized chart of accounts pursuant to section 3 of this
act, the commissioner shall submit a report to the Governor and the
Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), with an
analysis of the information submitted to the commissioner by provider managed
residences and programs pursuant to section 3 of this act.� The analysis shall,
at a minimum:

���� a. �determine the average
percentage of revenue spent on direct care and provide recommendations on
whether a mandatory direct care ratio or administrative cost cap is necessary
to increase the salaries of direct support professionals employed by provider
managed residences and programs while also ensuring the fiscal health of provider
managed residences and programs;

���� b. �compare the percentage of
total revenue spent on the compensation paid to direct support professionals
employed by provider managed residences and programs versus administrative
costs and expenditures incurred by such residences and programs; and

���� c. comprise of recommendations
concerning adjustments to payment structures and reimbursement rates for, and
wages paid to, direct support professionals employed by provider-managed
residences and programs.

���� 8. �Pursuant to the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.),
the Department of Human Services shall adopt any rules and regulations
necessary to effectuate the purposes of this act.

���� 9.� This act shall take effect
on the first day of the third month after enactment.

STATEMENT

���� This bill, to be known as the �Intellectual
and Developmental Disabilities Provider Transparency and Financial
Accountability Act,� requires the Commissioner of Human Services (commissioner),
in consultation with the State Comptroller, to develop, and every provider
managed residence and program to submit, a standardized chart of accounts which
includes information enumerated in the bill.

���� As defined in the bill, �provider
managed residence and program� means a residence, facility, or program that is
managed by an individual, entity, or business concern that is licensed,
certified, or otherwise authorized by the Department of Human Services (department)
to provide services to individuals with developmental or intellectual
disabilities.

���� Following the development of
the standardized chart of accounts, provider managed residences and programs
receiving more than $250,000 annually in State and federal funds are to submit
quarterly expenditure reports to the department.� If the residences and
programs fail to submit the report, part of their monthly reimbursements could
be withheld until the report is filed.

���� The bill stipulates that
provider managed residences and programs file with the commissioner an annual
disclosure statement identifying all related-party transactions involving State
or federal funds.

���� The bill requires the State
Comptroller to: �(1) conduct annual financial audits for a certain percentage of
provider managed residences and programs to verify the accuracy of the
information contained in the audits, and (2) permit the department to suspend
or revoke residence and program licenses or certifications or impose a civil
penalty if the audits contain material misrepresentations.

���� Under the bill�s provisions,
the department is to:� (1) create, maintain, and make publicly available, a
provider managed residence and program transparency Internet-based web portal;
and (2) submit a report to the Governor and the Legislature with an analysis of
the information submitted to the commissioner by provider managed residences
and programs pursuant to the bill.