New Jersey lawmakers advanced a bill Monday that they said would make it easier to track how nursing homes spend the more than $4 billion in taxpayer funds they now receive annually.
The Senate health committee passed legislation that would revise the state’s reporting requirements around financial operations and ownership structure at New Jersey’s roughly 350 skilled nursing facilities, which care for tens of thousands of New Jersey’s most vulnerable residents.
Nursing home residents who testified Monday said they believe the bill, if signed into law, would shed much-needed transparency on the industry.
“This bill is going to answer that really fundamental question: Where is the money going? Because what we do know is, it’s not going to our care,” said Ray DiFrancesco, a nursing home resident in Princeton.
Supporters of the bill said it is needed to increase transparency in the industry and highlight the use of what’s called “related parties,” meaning outside vendors that share ownership of a nursing home and provide linen or food services, cleaning crews, or other goods and services. Nursing homes now have reporting requirements that are far less stringent in the level of detail required.
“In New Jersey, the most common example is that a company will buy a nursing home and then create a separate company for the operation and a separate company for the real estate. Then the nursing home owners pay rent to themselves,” state Long-Term Care Ombudsman Laurie Brewer told the senators.
Nursing home operators have opposed the bill, first introduced in 2022, as burdensome and unnecessary, given all the financial and corporate data they already file with the state and federal government.
The committee advanced the measure 6-1 on Monday with Sen. Owen Henry (R-Middlesex) joining the Democratic majority in favor. Sen. Holly Schepisi (R-Bergen) voted against the measure and Sen. Robert Singer (R-Ocean) abstained.
Bill sponsor Sen. Joe Vitale said he was not surprised that nursing home industry lobbyists did not appear before his committee to testify about the bill. (Hal Brown for New Jersey Monitor)
The Health Care Association of New Jersey, which represents the industry, told the committee in writing that it opposes the financial disclosure bill on Monday, but representatives did not testify in person. Sen. Joe Vitale (D-Middlesex), the committee chairman, said the group’s absence was “unacceptable and unconscionable.”
“And I’m not surprised,” Vitale said.
The bill is one of multiple nursing home reforms New Jersey has pursued in the wake of the COVID-19 pandemic, which highlighted the industry’s vulnerability, many of which have been signed into law. A former state watchdog also repeatedly alleged there was fraud and abuse in the nursing home industry that he said cost the state taxpayers millions and endangered residents.
Schepisi said she “wholeheartedly” agreed with the bill’s intent but worries it could have unintended consequences for people who invest in entities that fund nursing homes.
“I think this just goes way beyond the scope of what is actually helpful to address some of what is put forward to us” in testimony, she said.
Vitale said the bill has been carefully vetted and could be an important tool for holding the industry accountable when they seek additional funding.
“‘If only we had more money’ — it’s always their mantra,” Vitale said. “But when they do get more money, the outcomes are essentially the same, in most cases.”
Brewer, whose office advocates for people in nursing homes, said that in 2023, nursing homes in New Jersey received $4.3 billion from Medicaid and Medicare, the publicly subsidized health insurance programs that pay for the bulk of elder care in America. This made up three-quarters of all their revenue that year, she said.
“We should know where every one of those tax dollars went. Even more importantly, the residents deserve to know where every dollar goes,” Brewer said.
Current regulations allow the state to see what a nursing home pays a related party, she said, before noting that there’s no way to know what is profit versus what is spent on resident care.
The practice of using related parties is widespread, according to Brewer and others. In 2023 alone, 90% of nursing homes reported at least one related party transaction, she said, and these accounted for 12% of spending on average statewide.
A survey from AARP New Jersey found nursing homes paid nearly $2 billion to related parties between 2021 and 2023, according to the group’s associate state director of advocacy, Katie Squires. These payments covered rent, management, therapeutic services, and other things, often at higher rates than charged on the open market, she said.
“When public dollars pay for nursing home care, those dollars should be subject to transparency and accountability,” Squires said.
Brewer said the bottom line is less money for resident care, something nursing home residents testified about on Monday. They described moldy food, cockroaches, stained sheets and towels, leaky windows, broken elevators, lack of outdoor access, and other problems. The deep freeze this winter led to broken water pipes at multiple facilities, the witnesses said.
“In the middle of the night, I can wait for an hour for someone to respond to a call bell. Others wait even longer,” said Gail Smith, a Somerset County nursing home resident who blamed the lack of nursing aides on their low pay.
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