New Jersey One-star Nursing Homes Cost Medicaid Over $100M Each Year: State Comptroller

New Jersey’s government watchdog released a report this week that found 15 one-star long-term care (LTCs) facilities in the Garden State are costing Medicaid more than $100 million dollars a year but have failed to improve for years, and are overwhelmingly operated for profit. 

Among the findings by the Office of the State Comptroller (OSC), the agency that oversees New Jersey’s Medicaid program, were 15 LTCs have consistently been rated one out of five stars over the last two years without improvement and many have been rated among the lowest LTCs since 2013. The report was published as the role of nursing homes has come under scrutiny during the pandemic. 

“Close to 2,000 New Jerseyans woke up this morning in these one-star nursing homes,” said Acting State Comptroller Kevin D. Walsh. “We found that hundreds of millions of Medicaid dollars flowed to one-star facilities despite the facilities having been repeatedly cited for serious health and safety issues.” 

Andover Subacute Cited

“Bottom line: New Jersey taxpayers should not be funding nursing homes that have failed to improve for years, appear unlikely to improve, and put residents in harm’s way,” stated Walsh.

Woodland Behavioral and Nursing Center, formerly operating as Andover Subacute and Rehab II, in Andover was among the 15 facilities cited in the report. Other North Jersey facilities named included Complete Care at Fair Lawn Edge in Paterson, Forest Manor HCC in Hope, and Lakeview Rehabilitation and Care Center in Wayne. 

Report Criteria

The OSC ratings are based on issues found during health inspections, quality measures reported by nursing homes, and the number of nursing staff. Health inspectors show up unannounced to a nursing home and spend several days evaluating resident rights and quality of life at the facility.

Inspectors can cite a facility for “immediate jeopardy” if they find an issue that “has caused, or is likely to cause, serious injury, harm, impairment or death” that requires immediate correction. Nationally, 45.2% of one-star nursing homes have been cited for an “immediate jeopardy” violation. 

“Year after year, these 15 facilities are rated one-star and yet do not improve the quality of care for thousands of individuals,” said Laurie Brewer, New Jersey’s Long-Term Care Ombudsman, who consulted with OSC on its report. “A consistent one-star rating means the Department of Health has flagged problems that endanger residents time after time, and yet no significant changes have been made by that facility to protect residents.”

Role of For-Profit Companies

Medicaid is the single largest payer of nursing home care in New Jersey. OSC’s data dashboard tracks how much Medicaid money each one-star LTC in the report received between fiscal years 2017 and 2019. In total, the fifteen one-star LTCs received over $300 million from Medicaid during that time period.

According to OSC, 14 out of the 15 one-star LTCs are for-profit companies. The majority of LTCs (77%) in New Jersey are operated for-profit as the state has seen a steady decline in non-profit ownership of nursing homes and an increase in private companies operating these facilities.

At least one study has shown that LTCs operated for profit increase the mortality risk for patients. For-profit ownership has also been linked to declines in patient well-being, such as lower mobility, all while being paid for by taxpayers.

Managing Multiple Facilities

“For too long, facilities have gotten away with widespread and uncorrected problems that have put people in harm’s way,” said Walsh. “New Jersey should simply refuse to pay for substandard care. It’s time that we use taxpayer funds to demand better. Any nursing home that year after year gets the lowest rating should not get public funds.”

In many cases, private owners of one-star LTCs in New Jersey owned multiple low-rated facilities. OSC’s report found that five of the owners, managers, or administrators of a one-star LTC also operated at least two other one-star LTCs. That includes an administrator of Complete Care at Fair Lawn Edge, Lakeview Rehabilitation and Care Center, Palace Rehabilitation and Care Center, Silver Health Care Center, and Wardell Gardens at Tinton Falls, being affiliated with eight LTCs that received a two-star or lower score in October 2021 and with a total of 39 LTCs in New Jersey. 

Digital Dashboard

“Since there are no financial consequences to being a one-star facility, it is simply built into the cost of doing business,” stated Brewer. “It appears there’s been a business calculation made that one-star ratings are just fine. Owners of these chronically one-star facilities must be held to account.”

To help educate the public, OSC launched a digital data dashboard that allows the public to track New Jersey nursing homes that are repeatedly rated one-star and receive Medicaid funds. OSC’s data dashboard will be periodically updated. The website includes a resources page for members of the public to file a complaint against a facility or research individual nursing homes across New Jersey.

Assembly Investigation

The report was published just before an Assembly Aging and Senior Services Committee hearing Feb. 3 on the challenges seniors face regarding the affordability of long-term care and housing. Committee members noted seniors in New Jersey facing yearly living expenses that are 145% more than the national average

Assemblywoman Angela McKnight (D-31) saidas population of residents over the age of 65 is expected to grow 48% by 2034, there is a pressing need to investigate the ways the Legislature can address the affordability concerns for Garden State senior residents, whether they are aging in place or in a long-term care facility.

“Seniors in New Jersey should not have to face uncertainty about how they will afford to live comfortably or pay for the long-term care that they may require as they grow older. They deserve to feel safe and economically secure as they retire and enjoy their golden years,” commented McKnight. “That is why it’s critical for us to take action to respond to the growing need for affordable senior housing and long-term care options for New Jersey’s seniors.”

Daily Data

The cumulative number of confirmed coronavirus cases in New Jersey as of Feb. 4 was 1,838,073 with 2,709 total new PCR cases. There were 592 probable cases, bringing the cumulative total of antigen tests to 288,157. The total number of individual cases for the state is 2,126,230. 

As for those that have passed, the state reported 104 confirmed deaths, bringing that total to 28,949. The state listed probable deaths at 2,919, bringing the overall total to 31,868. State officials noted 46 deaths occurred in the last 24 hours of reporting that have not yet been lab confirmed.  

For North Jersey counties on Feb. 4, Bergen had a total of 228 new confirmed cases and 74 new probable cases, Essex 167 new cases and 16 new probable case, Hudson 133 new cases and 38 new probable cases, Morris 165 new confirmed cases and 45 new probable cases, Passaic 120 new cases and 30 new probable cases, Sussex 47 new cases and six new probable cases, and Warren 39 new cases and nine new probable cases.

Of the total confirmed deaths in North Jersey, Essex County has the most with 3,171, followed by Bergen at 3,017, Hudson with 2,427, Passaic at 2,047, Morris at 1,185, Sussex at 358, and Warren County at 292.

In regards to probable deaths reported Jan. 31, Bergen has 331, Essex has 309, Morris has 280, Hudson has 224, Passaic has 203, Sussex has 80 and Warren has 27.

State Testing 

As for the rate of transmission reported Feb. 3, it remained at 0.55 for a fifth day in a row. The daily rate of infections from those tested Jan. 30 was 13.8%; by region, the rate was 12.4% in the North, 13.9% in the Central region and 16.4% in the South. 

The state’s dashboard had a count of 2,409 patients hospitalized at all 71 hospitals in the Garden State filed reports Feb. 4. By region, there were 924 in the North, 854 in the Central and 631 in the South. Of those hospitalized, 421 are in intensive care units and 294 on ventilators. A total of 368 patients were discharged in the last 24 hour reporting period.

Officials have continually cited transmission rate, hospitalizations, intensive care units, ventilators and positivity rate as health data they rely on to track how the coronavirus is being contained in New Jersey, guiding them in determining when restrictions have to be tightened or lifted.

Long-term Care Facilities

Health officials noted 561 long-term care facilities are currently reporting at least one case of COVID-19, accounting for a total of 26,401 of the cases, broken down between 12,119 residents and 14,282 staff. 

Cumulatively, 2,355 long-term care facilities have reported an outbreak infecting 45,983 residents and 37,325 staff, for a total of 83,308. 

The state’s official death total will now be reported as those that are lab confirmed, sits at 9,063 on Feb. 4. The facilities are reporting to the state 8,439 residents deaths and 148 staff deaths.

Vaccine Distribution

The number of COVID-19 vaccines administered in New Jersey totaled 13,492,108 in-state, plus an additional 549,385 administered out-of-state for a grand total of 14,041,493 as of Feb. 3. 

Of those who have received the vaccine, 6,413,286 received their second dose or the one jab Johnson & Johnson dose in state and another 220,178 out of state, bringing those fully vaccinated to 6,633,464. A total of 76% of those eligible are fully vaccinated in New Jersey and 90% have received at least one dose.

State officials reported boosters and third shots of 1,505,975 for Pfizer and 1,248,098 for Moderna. A total of 59,710 New Jerseyans have received their Johnson & Johnson booster shot. Overall, 2,813,783 have received a booster or third shot. Overall, 51% of those eligible have received their booster.

In North Jersey, Bergen County has 704,751 residents fully vaccinated, Essex 569,820, Hudson 510,872, Morris 378,097, Passaic 346,160, Sussex 90,574, and Warren 58,832.

School Outbreaks

According to the state dashboard with 64.3% of all New Jersey schools reporting, new student cases totaled 10,938 and new staff cases 2,586 in the last week as of Jan. 23. Cumulatively, 117,884 cases have been reported— 92,102 students and 25,782 staffers.  

In regards to outbreaks related to in-school transmissions as of Jan. 26, the state has tracked 465 school outbreaks and 3,138 cases linked to those outbreaks since the 2021/2022 school year starting Aug. 7, up 33 outbreaks and 455 cases from the week previous. 

Outbreaks are defined as three or more laboratory confirmed COVID-19 cases among students or staff with onsets within a 14 day period, linked within the school setting, do not share a household, and were not identified as close contacts of each other in another setting during standard case investigation or contact tracing. 

For North Jersey in the new report, Bergen County has 54 confirmed outbreaks with 296 cases, Morris County has 36 confirmed outbreaks with 220 cases, Essex County has 28 confirmed outbreaks with 208 cases, Sussex has 33 confirmed outbreaks with 179 cases, Passaic County has 21 confirmed outbreaks with 178 cases, Hudson County has 18 confirmed outbreaks with 89 cases and Warren County has two confirmed outbreaks with 15 cases.