Bill > A1872

Introduced Session

This bill revises certain reporting requirements for nursing homes. Specifically, the bill requires nursing home owners and operators, as well as applicants for a transfer of ownership of a nursing home and third party entities exercising substantial management control over the nursing home, to provide an organizational chart identifying parent corporations, wholly-owned subsidiaries, related parties, and unrelated parties that provide a service, facility, or supplies to the nursing home that are paid $200,000 or more by the nursing home. In the case of an applicant for a transfer of ownership of a nursing home, these disclosures will be based on expectations with regard to services, facilities, supplies, and payments. The bill defines "related party" to mean any organization, either directly or through contracts with a third party entity exercising substantial management control over the nursing home, providing or expected to provide a service, facility, or supplies to the nursing home or that otherwise, either directly or through contracts with a third party entity exercising substantial management control over the nursing home, does, or is expected to do, business with the nursing home: 1) in which organization an owner or principal of the nursing home, an applicant for transfer of ownership, or a third party managing entity, has an ownership or control interest of five percent or more; 2) which is an organization in which an immediate family member of the owner, principal, applicant, or third party managing entity is an owner or principal; or 3) which is an organization that is under common ownership or control with the owner, applicant, or third party entity. The bill additionally revises the financial disclosures required for nursing home owners and operators, as well as applicants for a transfer of ownership and entities to which substantial management control over the nursing home would be delegated, to require the submission of a consolidated financial statement that: 1) is reviewed or audited by a certified public accountant in accordance with generally accepted accounting principles; and 2) includes: a balance sheet detailing the assets, liabilities, and net worth that the end of the reporting entity's fiscal year; a statement of income, expenses, and operating surplus or deficit for the annual fiscal period, and a statement of ancillary utilization and patient census; a statement detailing patient revenue by payer, including, but not limited to, Medicare, NJ FamilyCare, and other payers, and revenue center; a statement of cash flows, including, but not limited to, ongoing and new capital expenditures and depreciation; and a combined financial statement that includes all entities reported in the consolidated financial report. For nursing homes that are part of a chain or group of nursing homes owned by the same parent or holding company, the parent or holding company will be permitted to submit a single consolidated financial statement for all nursing homes in New Jersey that are owned, operated, or controlled by the parent or holding company. For applicants for a transfer of ownership and entities seeking to delegate management of a nursing home, this information will be included with certain materials that current law requires be provided to the Department of Health (DOH); in the case of a transfer of ownership application, the information will be made available on the DOH's Internet website, with certain personal identifying and proprietary material excised. For current nursing home owners and operators, the following materials are to be annually posted on the nursing home's internet website, submitted to the DOH, and linked through the DOH's website: 1) the nursing home's ownership information; 2) the financial information for the nursing home, for certain parties providing services to the nursing home, and for a third party exercising substantial management control over the nursing home; and 3) the organizational chart for the nursing home and for any third party exercising substantial management control over a nursing home. Current law provides that the financial disclosures required for a transfer of ownership application vary, depending on whether the transfer involves a controlling interest in the nursing home and whether the prospective new owner has previously owned, operated, or managed a nursing home in New Jersey. The bill revises these requirements to require audited consolidated financial statements for all prospective new owners and operators who will be acquiring an interest of five percent or more in the nursing home. The bill removes an existing requirement for nursing homes to post the cost reports submitted to the federal Centers for Medicare and Medicaid Services on their Internet websites. Current law allows nonprofit nursing homes to submit their Internal Revenue Service Form 990 in lieu of an owner-certified financial statement. The bill removes this language, thereby requiring nonprofit nursing homes to submit the same audited consolidated financial statements as are required of for profit nursing homes under the bill. Current law requires nursing homes to annually disclose certain ownership interests of 10 percent or more in the nursing home's mortgage, note, deed of trust, or other obligation appearing on the nursing home's books. The bill makes these disclosures applicable to ownership interests of five percent or more. The bill additionally requires nursing homes to annually provide to the DOH: 1) a disclosure of any person who owns or operates a sister company, holding company, or parent company, or who is a member of the board of trustees or the board of directors of the nursing home; 2) a disclosure of any person who has an ownership interest in a private equity pool that funds the nursing home; 3) information identifying 100 percent of the current owners of any third party entity exercising substantial management control over the nursing home, including all principals and interested parties and including 100 percent of the owners, principals, and interested parties in a third party entity identified as a principal or interested party; and 4) a copy of any lease agreements for the nursing home's use of land, buildings, facilities, or other real property. Current law establishes certain monetary penalties for nursing homes that fail to make the required disclosures. The bill grants the DOH the authority to additionally curtail new admissions at a nursing home that fails to make the required disclosures or that files false disclosures. The bill grants the Commissioner of Human Services the discretion to accept a consolidated financial statement that meets the requirements of the bill as satisfying the requirement that nursing homes report revenues and expenditures for the purposes of establishing and enforcing a direct care loss ratio, as required under current law.

AI Summary

Committee Categories

Garnet Hall (D)*,  Tennille McCoy (D)*,  Shanique Speight (D)*,  Reginald Atkins (D),  Clinton Calabrese (D),  Linda Carter (D),  Alixon Collazos-Gill (D),  Joe Danielsen (D),  Margie Donlon (D),  Aura Dunn (R),  Shama Haider (D),  Melinda Kane (D),  Andrea Katz (D),  Ellen Park (D),  Luanne Peterpaul (D),  Verlina Reynolds-Jackson (D),  Balvir Singh (D),  Anthony Verrelli (D), 

Introduced, Referred to Assembly Aging and Human Services Committee (on 01/09/2024)

Official Document