More than 1,500 New Jersey residents are living in nursing homes that consistently provide substandard care funded by significant taxpayer money, according to a new report from a state-appointed watchdog.
A dozen long-term care facilities continue to receive low marks on federal quality reviews and they receive more than $100 million annually through the state Medicaid program to care for low-income seniors, the New Jersey Office of the State Comptroller said in a report Friday. Seven of these facilities were flagged in two similar reports the office published last year, in February and September. All 12 are for-profit facilities.
The new report from acting State Comptroller Kevin Walsh echoes those earlier documents in urging the state agencies that oversee Medicaid to shift their payment system to reward higher-quality care, instead of paying for residents to live in nursing homes regardless of the conditions. But Friday’s report digs deeper by including quality ratings dating to 2013 and ownership details that show a handful of people have stakes in multiple struggling facilities. The report takes a far sharper tone in criticizing the state for its current use of Medicaid dollars.
‘Enough is enough. 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.’ — Kevin Walsh, acting state comptroller
“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,” Walsh said, referring to the five-star rating system established by the federal Centers for Medicare and Medicaid Services.
As acting comptroller, Walsh leads the independent state agency charged with monitoring government efficiency and transparency. That includes New Jersey’s $20 billion state and federally funded Medicaid program, of which more than $2 billion is allocated for nursing home care in the coming fiscal year.
Long-standing problems
The nursing homes home industry — in New Jersey and nationwide — has struggled to consistently provide high-quality care in recent years as the senior population grows and requires more complex services. Long-standing problems with infection control and short staffing were exacerbated by COVID-19, which is especially dangerous to older people.
A report from a state consultant who reviewed the pandemic response at New Jersey’s 340 licensed long-term care facilities prompted multiple changes, including additional funding for caregivers, strict staffing minimums and greater regulatory oversight. More than three-quarters of these homes — a growing number of which are for-profit operations — accept Medicaid reimbursements for residents’ care and most depend on that funding to remain in business.
‘In declining to use the power granted to it by federal law, despite (federal regulators’) encouragement to do so, (state officials are) electing to maintain the status quo and tolerating ongoing and seemingly perpetual poor performance in the lowest-rated nursing homes identified in this report.’ — Report by New Jersey Office of the State Comptroller
But Walsh’s office said it wants leaders at the state Department of Human Services, which runs Medicaid, to do more to root out poor-quality facilities, many of which have received one or two stars out of five for years. Half of those flagged in the new report have had low marks almost every quarter since the start of 2013.
Credit: (NJ Spotlight News)“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.” Some 24,000 New Jersey residents depend on Medicaid to cover the cost of nursing home care, according to state officials.
The new report urges the state to use a “phased approach” to compel low-performing nursing homes to change by banning or limiting new admissions –– and therefore additional revenue — or enacting other penalties, until conditions improve. The White House and federal regulators have also endorsed a more “flexible” Medicaid reimbursement policy, according to the report.
Ban certain owners, operators?
The acting comptroller also recommends the state Department of Health, which licenses nursing homes, ban owners and operators associated with these poor-quality facilities from obtaining a stake in other nursing homes. The report identifies four individuals who have a financial interest in several of the 12 homes and it highlights Sam Stern who is affiliated with 43 facilities in New Jersey, 18 of which received one or two stars in their most recent federal rating.
Elder advocates like AARP New Jersey are also concerned about rooting out so-called bad actors in the nursing home industry and support legislation to expand disclosure requirements for ownership. NJ Spotlight News recently reported on a Long Island man who has a stake in more than 100 facilities nationwide, including several one-star facilities in New Jersey, and now faces fraud and abuse charges in New York state related to the operation of a home outside of Rochester.
‘The goal of these recommendations was to move New Jersey’s Medicaid program away from a system that continues to pay significant amounts for consistently poor-quality nursing homes…’ — Report by New Jersey Office of the State Comptroller
The report — which was shared with NJ Spotlight News under an embargo and the condition it not be subject to outside comments in advance — includes a response from both the state health and human services departments, which defended their record on nursing home oversight. Both agencies pointed to their unprecedented work to close Woodland Behavioral and Nursing Center, a Sussex County facility with a long history of financial and operational problems. Woodland made national headlines under its previous name, Andover Subacute and Rehabilitation Center, when the bodies of 17 residents were found in a makeshift morgue on Easter weekend in 2020.
The human services department said it revised a quality incentive funding program to prevent the lowest-performing facilities from receiving bonus dollars, according to the report, which suggests this was a response to a recommendation by the comptroller. Walsh also criticized a separate program designed to support troubled facilities — several that he said had reverted to single-star status — and urged both state agencies to do more to protect residents and Medicaid funds.
“The goal of these recommendations was to move New Jersey’s Medicaid program away from a system that continues to pay significant amounts for consistently poor-quality nursing homes and replace it with one that rewards nursing homes that obtain higher ratings and provide higher-quality care,” the report reads. “In declining to use the power granted to it by federal law, despite (federal regulators’) encouragement to do so, (state officials are) electing to maintain the status quo and tolerating ongoing and seemingly perpetual poor performance in the lowest-rated nursing homes identified in this report.”
