Senate committee advances bills to identify failing nursing homes and intervene earlier

The New Jersey Senate Health Committee on an undisclosed date voted to release legislation that would (1) establish mission-critical teams to identify and intervene at long-term care facilities showing operational or financial distress and (2) create an escalated sanctions process for chronically low-performing nursing homes.

The measures matter because committee witnesses and members said existing state efforts have not stopped some facilities from providing persistently poor care while continuing to receive large Medicaid payments. Kevin Walsh, acting state comptroller, told the committee his office’s audits and investigations show “fraud, waste and abuse” in some nursing homes and estimated New Jersey spends about $2,000,000,000 a year on Medicaid in nursing homes.

Walsh described cases where operators use related entities to extract cash from facilities — for example, contracting with affiliated staffing, food, or property companies — and where mortgage and rent structures inflate costs charged to Medicaid. He said his office’s December 2024 report on a South Jersey facility demonstrated how money intended for resident care can be diverted and that a limited subset of facilities have been rated one star repeatedly over years.

Senators on the committee framed the bills as tools to protect residents and to give the state more options than repeated fines. “This bill will not prevent every scam,” Walsh said, “but it will discourage nursing homes that have made a business decision to siphon money away at the cost of providing the worst possible care.” Committee members argued the state needs more transparency and enforcement powers so operators that chronically fail to provide adequate care face meaningful consequences, including closure when warranted.

The committee also discussed complementary proposals to improve financial transparency, including requiring audited financial statements and broader disclosure of cost reports and related-party transactions. Senator commenters urged exploring ways to support home- and community-based care options so families could keep loved ones at home when appropriate and reduce pressure on institutional care.

On the motions to release the bills, committee members voted to release Senate Bill 19 53 (mission-critical long-term care teams) and Senate Bill 19 51 (sanctions and actions for low-performing nursing homes). Voting records as read into the record show a unanimous or near-unanimous committee vote in favor; the bills proceed as amended for further consideration.

Supporters listed in the hearing record included Laurie Brewer, long-term care ombudsman; Katie Squires, AARP; and Dennis Marco of Care Plus New Jersey. Opponents or expressing concerns included industry groups and representatives referenced on the hearing list, though the transcript shows the committee moved the bills forward.

The legislation is intended to add enforcement tools and earlier identification mechanisms, not to replace existing state inspections or patient-protection statutes. Committee members and witnesses repeatedly emphasized the bills target facilities with prolonged, systemic failures rather than those experiencing short-term problems.

Next steps: both measures were released from committee as amended and will advance for consideration on the Senate floor and in subsequent committee work. The committee record shows interest in coordinating the bills with separate transparency legislation that would require more detailed financial disclosures by nursing home operators.