Official Site of The State of New Jersey

Requiring Financial Transparency for Nursing Home Owners/Operators

Current Status

A1872 — Assembly Aging and Human Services Committee

Check for hearings or updates

S1948 — Senate Health, Human Services, and Senior Committee

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The legislation requires certified financial statements for every nursing home and any related parties engaged in the nursing home’s operations. Companies that own multiple nursing homes would be required to submit certified statements that consolidate financial data across all of their nursing homes.

New Jersey nursing homes currently submit financial statements that are not audited by any outside entity or closely scrutinized by state or federal regulators. The financial statements do not account for other nursing homes owned by the same company and they provide very little detail about payments to related parties — companies that are owned or controlled by the same principals.

This lack of transparency enables nursing home owners to pay higher-than-market rates to related parties for various purposes. For example, a nursing home might lease real estate and purchase services (such as property management, pharmacy, and staffing resources) from related parties. The inflated payments siphon money away from patient care into hidden profits for the owners. The situation can also make it appear that profitable nursing homes are losing money and need additional public funds to properly care for residents.

Under the status quo, nursing home owners can prioritize profits over the dignity and well-being of residents without public scrutiny. This is a growing concern, as the trend toward corporate consolidation and private equity ownership of nursing homes continues.

Medicare and Medicaid are primary sources of revenue for nursing homes. New Jersey’s taxpayers deserve to know how every dollar of that money is spent.