Official Site of The State of New Jersey
An Examination of the Lowest-Rated Long Term Care Facilities Participating in New Jersey’s Medicaid Program -- September Update
- Posted on - 09/8/2022
Table of Contents
Executive Summary
This report provides an updated list of New Jersey’s residential long-term care facilities (LTCs) — also known as nursing homes1 — that consistently receive the lowest possible rating. The report addresses how the New Jersey Medicaid program (Medicaid) continues to provide substantial funds to these LTCs despite their longstanding failure to improve the safety and quality of their care.
Based on public data from the U.S. Department of Human Services, Centers for Medicare & Medicaid Services (CMS), the Office of the State Comptroller (OSC) found that New Jersey’s 12 lowest-rated LTCs provide services to approximately 1,835 Medicaid beneficiaries. The Medicaid program annually pays these facilities an average of $107 million.
The list of lowest-rated LTCs includes nursing homes that have received the lowest CMS overall rating (one-star) in the first month of each quarter for six of the past eight quarters from October 2020 to July 2022. OSC’s first list of lowest-rated LTCs was released in a February 2, 2022 report. That report identified 15 lowest-rated LTCs. Since that report was issued, 6 LTCs have moved off the list and 3 new LTCs have joined the list. Nine LTCs are on both lists. One of the nine LTCs on both lists was recently shut down.
OSC’s February report recommended that the Department of Human Services (DHS) modify the Quality Incentive Payment Program (QIPP). The QIPP provides supplemental payments to LTCs that meet or exceed five quality measures. Effective July 1, 2022, DHS implemented changes to QIPP eligibility standards. These eligibility requirements excluded all of the 12 lowest-rated LTCs from the QIPP in state fiscal year (SFY) 2023.
This update should be read in conjunction with the original February report and the recommendations made in that report to Department of Human Services (DHS) and the Department of Health (DOH).
Findings
A. New Jersey’s lowest-rated LTCs consistently have performed poorly for many years.
State and federal inspectors regularly inspect New Jersey’s LTCs and provide their findings to CMS. The data that results from those inspections allows CMS to compare the quality of LTCs over multiple years, using a one to five-star rating system, with one-star being the lowest and five-stars the highest. CMS compiles this information in its Care Compare website.[1]
State and federal inspectors regularly inspect New Jersey’s LTCs and provide their findings to CMS. The data that results from those inspections allows CMS to compare the quality of LTCs over multiple years, using a one to five-star rating system, with one-star being the lowest and five-stars the highest. CMS compiles this information in its Care Compare website.[1]
1. CMS Ratings
The linchpin of the CMS rating system is the health-inspection score. This score is developed based on unannounced site visits conducted by a team of state surveyor healthcare professionals who spend several days in the LTC assessing a variety of practices and policies in such areas as resident rights, quality of life, medication management, skin care, resident assessment, nursing home administration, environment, and kitchen/food services. After CMS establishes an LTC’s health-inspection score, it adds or subtracts points based on the LTC’s quality and staffing measure scores to arrive at an aggregated score. For an LTC to be among the lowest performers for the first month of each quarter for at least six of the past eight quarters means that the LTC consistently has had more widespread, serious, and uncorrected deficiencies than LTCs with higher star ratings.
The linchpin of the CMS rating system is the health-inspection score. This score is developed based on unannounced site visits conducted by a team of state surveyor healthcare professionals who spend several days in the LTC assessing a variety of practices and policies in such areas as resident rights, quality of life, medication management, skin care, resident assessment, nursing home administration, environment, and kitchen/food services. After CMS establishes an LTC’s health-inspection score, it adds or subtracts points based on the LTC’s quality and staffing measure scores to arrive at an aggregated score. For an LTC to be among the lowest performers for the first month of each quarter for at least six of the past eight quarters means that the LTC consistently has had more widespread, serious, and uncorrected deficiencies than LTCs with higher star ratings.
2. Ratings for New Jersey’s LTCs
OSC examined CMS data from 2013 to 2022, with particular focus on data for October 2020 to July 2022 to assess whether New Jersey LTCs that accept Medicaid beneficiaries performed poorly over an extended number of years.
As one method to evaluate New Jersey’s use of Medicaid funds to pay the lowest-rated LTCs, this update focuses on the LTCs that for the first month of six of the past eight quarters (i.e., January, April, July and October) received one-star. Using this metric, OSC identified 12 LTCs that received one-star on these quarterly intervals for at least six of the prior eight quarters. We refer to these LTCs as the “12 lowest-rated LTCs.” Nine of these LTCs were included on OSC’s original February 2, 2022 list of “15 lowest-rated LTCs.” As the Tables below show, we analyzed these LTCs not only in terms of their performance on a quarterly basis for the past eight quarters, but also looking back eight years to 2013.
OSC examined CMS data from 2013 to 2022, with particular focus on data for October 2020 to July 2022 to assess whether New Jersey LTCs that accept Medicaid beneficiaries performed poorly over an extended number of years.
As one method to evaluate New Jersey’s use of Medicaid funds to pay the lowest-rated LTCs, this update focuses on the LTCs that for the first month of six of the past eight quarters (i.e., January, April, July and October) received one-star. Using this metric, OSC identified 12 LTCs that received one-star on these quarterly intervals for at least six of the prior eight quarters. We refer to these LTCs as the “12 lowest-rated LTCs.” Nine of these LTCs were included on OSC’s original February 2, 2022 list of “15 lowest-rated LTCs.” As the Tables below show, we analyzed these LTCs not only in terms of their performance on a quarterly basis for the past eight quarters, but also looking back eight years to 2013.
B. New Jersey pays more than $107 million annually to the 12 lowest-rated LTCs.
The 12 lowest-rated LTCs identified in this update together received $215 million in Medicaid funds in 2020 and 2021, or more than $107 million annually.
The 12 lowest-rated LTCs identified in this update together received $215 million in Medicaid funds in 2020 and 2021, or more than $107 million annually.
C. ALL of the lowest-rated LTCs are for-profit companies.
Most New Jersey LTCs operate under for-profit ownership models. We note that of the 12 lowest-rated LTCs listed above, four of the owners/managers/3rd party administrators are also involved in at least two other LTCs on the lowest-rated LTC list. One of these owners/managers/ administrators is affiliated with 34 LTCs in New Jersey. Set forth below is a complete breakdown of the affiliations of all five of these owners, managers, and administrators. 3
- An owner of Forest Manor HCC and Warren Haven Rehab and Nursing Center is affiliated with two LTCs that received a two-star or lower score in July 2022 and with a total of two LTCs in New Jersey.
- A manager of South Jersey Extended Care, and Sterling Manor, is affiliated with six LTCs that received a two-star or lower score in July 2022 and with a total of eight LTCs in New Jersey;
- An administrator of Palace Rehabilitation and Care Center and Silver Health Care Center is affiliated with 10 LTCs that received a two-star or lower score in July 2022 and with a total of 34 LTCs in New Jersey; and
- An owner/manager of Oceana Rehabilitation and Nursing Care, South Jersey Extended Care, and Sterling Manor, is affiliated with three LTCs that received a two-star or lower score in October 2021 and with a total of three LTCs in New Jersey.
Most New Jersey LTCs operate under for-profit ownership models. We note that of the 12 lowest-rated LTCs listed above, four of the owners/managers/3rd party administrators are also involved in at least two other LTCs on the lowest-rated LTC list. One of these owners/managers/ administrators is affiliated with 34 LTCs in New Jersey. Set forth below is a complete breakdown of the affiliations of all five of these owners, managers, and administrators. 3
- An owner of Forest Manor HCC and Warren Haven Rehab and Nursing Center is affiliated with two LTCs that received a two-star or lower score in July 2022 and with a total of two LTCs in New Jersey.
- A manager of South Jersey Extended Care, and Sterling Manor, is affiliated with six LTCs that received a two-star or lower score in July 2022 and with a total of eight LTCs in New Jersey;
- An administrator of Palace Rehabilitation and Care Center and Silver Health Care Center is affiliated with 10 LTCs that received a two-star or lower score in July 2022 and with a total of 34 LTCs in New Jersey; and
- An owner/manager of Oceana Rehabilitation and Nursing Care, South Jersey Extended Care, and Sterling Manor, is affiliated with three LTCs that received a two-star or lower score in October 2021 and with a total of three LTCs in New Jersey.
[1]See CMS Nursing Home, Care Compare Technical Details: https://data.cms.gov/provider-data/topics/nursing-homes/technical-details.
[2] See DOAS website at: https://www.state.nj.us/humanservices/doas/resources/.
[3] OSC downloaded NJ Medicaid payment data from fiscal years 2017, 2018 and 2019 from the NJ Medicaid System/Shared Data Warehouse and combined Medicaid claims payment data for both Fee for Service and Managed Care Organizations for total payment amounts. The amounts provided are estimates/averages and do not account for future claim edits and/or retractions.
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