Poorly Run Nursing Homes Still Raking in Millions in Medicaid Dollars  

It appears little has changed since the Office of the State Comptroller (OSC) first reported its findings more than a year ago concerning the poor quality of care being passed out by 12 of the lowest-rated rehabilitation and nursing homes within the Garden State.

Perhaps even more egregious, these facilities are still receiving more than $100 million a year in Medicaid funds, according to OSC officials.

The follow-up report just released by OSC confirms that several of these facilities have been providing substandard care to New Jersey residents for almost a decade. The report verifies that 7 of the 12 poorly run long-term care facilities appeared in the initial February 2022 report.

More Than $100 Million a Year

According to the U.S. Centers for Medicare and Medicaid Services (CMS), all 12 have consistently received a “one-star” rating, the lowest possible score for a nursing facility. CMS cited within their finding’s deficiencies in patient care, medical management, nutritional services, and overall environment.

The report recommends that the Department of Humans Services’ Division of Medical Assistance and Health Services (DMAHS), which oversees Medicaid providers, stop paying quality incentive program payments  to poorly run “one-star” nursing homes.

OSC’s Recommendation Rejected

However, OSC’s recommendation was rejected by DMAHS, opting instead for a phased in approach, where low-rated nursing homes would be judged on the quality of care provided to residents, in which new admissions of residents would be limited, and in cases where nursing homes continued to perform poorly residents could even be removed from those facilities.

This prompted an immediate response from 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.” said Walsh.

“One-Star” Rating Continues

In the initial February 2022 report, OSC recommended that both the DMAHS and the Department of Health, which oversees the activity of nursing homes within the Garden State, jointly prohibit owners of “one-star” nursing facilities from obtaining interests or doing any additional business with other nursing homes. The White House and Centers for Medicare and Medicaid Services (CMS) also publicly urged states to become more pro-active in protecting the wellbeing of residents within nursing homes.

After reviewing this latest report from OSC, the New Jersey Department of Health had promised to improve their practice in dealing with poorly run nursing facilities by upgrading their policy of inspections and penalties, along with investigating the history of suspected owners concerning the issuing of new licenses or the transfer of ownership.

However, according to the State Comptroller, both DMAHS and DOH have yet to live up to their promise.

Among OSC’s findings:

• The 12 “one-star” facilities identified in February of 2022 are still being run poorly, with only one showing any signs of recent improvement.
• A special six month program called Special Focus Facility Program (SFF), designed to improve nursing home quality care for low-rated nursing homes, has failed in three of the four cases reviewed, in which troubled nursing homes have reverted back to their “one-star” ratings. The federal program requires DOH to conduct onsite inspections every six months and use progressive enforcement until a nursing facility “graduate” from the program or is terminated from Medicaid.
• OSC found that 20 owners and administrators of the 12 lowest-rated nursing facilities also own multiple nursing homes within the Garden State.

Facilities Cited 

Among the North Jersey facilities highlighted in the report included Grove Park Healthcare and Rehabilitation Center in East Orange receiving $49.4 million in Medicaid payments since 2017; Forest Manor in Hope receiving $21.8 million; and Phoenix Center For Rehabilitation and Pediatrics in Haskell receiving $81.3 million

“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.”