TRENTON – A follow-up report by the Office of the State Comptroller (OSC) finds that the 12 lowest-rated nursing homes in New Jersey continue to receive more than $100 million a year in New Jersey Medicaid funds. Several facilities have provided poor care to New Jersey residents for almost a decade, OSC’s report finds.

More than a year ago, OSC sounded the alarm about New Jersey Medicaid funding for low-rated nursing homes, but OSC’s latest report, released today, finds little has changed. Seven of the 12 nursing homes identified in the new report also were in the February 2022 report. All 12 have consistently received one star, the lowest possible rating from the U.S. Centers for Medicare and Medicaid Services (CMS), for deficiencies in patient care, medical management, nutritional services, and overall environment.

OSC’s new report also finds that the Department of Humans Services’ Division of Medical Assistance and Health Services (DMAHS), which oversees Medicaid providers, adopted OSC’s recommendation to stop paying quality incentive program payments (QIPP) to the one-star facilities, but disregarded OSC’s other recommendations. Specifically, it rejected OSC’s recommendation that DMAHS institute a phased approach to tie quality of care to admissions, curtailing admissions or even removing residents from nursing homes that consistently perform poorly.

“We raised the alarm a year ago, but the State has chosen to maintain the status quo. Nursing homes can get one-star ratings for years and still never face any meaningful consequences,” said Kevin Walsh, Acting State Comptroller.

In the February 2022 report, OSC recommended that DMAHS and the Department of Health, which oversees nursing homes, collaborate to bar owners of chronically one-star facilities from obtaining interests in, or contracts with, additional nursing homes. The White House and Centers for Medicare and Medicaid Services (CMS) also publicly urged states to be more assertive in protecting residents of nursing homes.

After reviewing a draft of OSC’s report, DOH contended that it has taken steps to improve quality of care through inspections and penalties and claimed it considers the track record of owners in issuing a new license or transfer of ownership. OSC’s latest report shows that the approaches taken by DMAHS and DOH have not worked thus far.

Among OSC’s findings:

• Seven of the 12 lowest-rated facilities were also identified in OSC’s February 2022 report. Only one of the 12 showed any signs of recent improvement.

• Three of four “graduates” of the Special Focus Facility program (SFF), a program designed to improve nursing home quality, have reverted to one-star ratings. (Under the SFF program, which was created by the federal government, DOH is required to perform onsite inspections every six months and use progressive enforcement until a facility “graduates” from the program or is terminated from Medicaid.)

• Additionally, 20 owners/administrators of the 12 lowest-rated facilities own multiple nursing homes in New Jersey. Four of these individuals own or manage more than one facility on OSC’s lowest-rated nursing home list.

In response to OSC’s findings, both DMAHS and DOH cited their actions to close Woodland Behavioral. But that action was initiated by CMS in 2022 after over two years of alarming reports and a long history of poor ratings going back to 2013. In fact, using OSC’s methodology, a few facilities on the current list rival Woodland at least when it comes to the duration of one-star care.

A review of DOH’s most recent inspection reports also paints a grim view of daily life at the 12 facilities identified in this report. Some of the nursing homes are worse than others, with excrement-stained rooms and allegations of abuse, but all 12 are deficient in ways that indicate substandard care.

"Enough is enough,” Walsh said. “We shouldn’t use our Medicaid dollars to fund poor quality care year after year. The State has the power to prevent this waste -- it should use it.”

Read the report.

To report government fraud, waste, mismanagement or corruption, file a complaint with OSC or call 1-855-OSC-TIPS.