April 11, 2022

The New Jersey Office of the State Comptroller issued its Medicaid Fraud Report entitled “An Examination of the Lowest-Rated Long Term Care Facilities Participating in New Jersey’s Medicaid Program” on February 2, 2022 in which it reported that “New Jersey’s 15 lowest-rated LTCs [long-term care facilities which are often known as nursing homes], which consist of LTCs that have received the lowest CMS overall rating (one-star) in the first month of each quarter for six of the past eight quarters in 2020 and 2021, provide services to approximately 1,850 Medicaid beneficiaries, or 6.5% of the 28,500 Medicaid beneficiaries residing in New Jersey LTCs. The Medicaid program annually pays these facilities an average of $103 million. In total, the Medicaid program annually spends around $1.74 billion for LTC services, which comprises about 12% of the annual Medicaid budget.”

“During the period we examined, from 2013 to 2021, the lowest-rated LTCs provided care for Medicaid beneficiaries and received substantial government funding, while consistently receiving the lowest ratings for health inspections, quality measures, and staffing rates. This means that every day thousands of Medicaid beneficiaries have lived in and received health care from LTCs that have been repeatedly cited by state inspectors for serious, widespread, and uncorrected deficiencies that placed patients at great risk of harm. Because Medicaid funds follow Medicaid beneficiaries — and the State’s recent effort to incentivize higher quality care thus far has failed to distinguish in a meaningful way between the highest and lowest rated facilities — the State has paid the lowest-rated LTCs at virtually the same rate as it paid higher-rated LTCs.”

The CMS rating system is a nationally recognized and accepted measure of LTC performance. There are three CMS measures used to form the overall score — health inspections, quality, and staffing. CMS bases the health-inspection score on deficiencies found in the three most recent health inspections and on any complaint, incident or infection control investigations over the last three years. CMS assigns points based on the scope and severity of the health-inspection findings, with more serious, widespread deficiencies receiving more points and additional points assigned for substandard quality of care. Deficiencies that the LTC fails to address receive additional weight, which leads to higher point totals. The top 10% of LTCs in a state receive five-stars, the middle 70% receive two, three, or four-stars, and the bottom 20% receive one-star.

The overall average rating for LTCs in New Jersey is 3.6 stars, which exceeds the national average of 3.1. An analysis found “one in fourteen of New Jersey’s 339 LTCs recently received the lowest ratings and that more than half of those LTCs experienced a sustained period of low ratings.” More than half of the 24 LTCs that received one-star as of October 2021 reflected a pattern of several quarters of poor CMS ratings. The lowest-rated LTCs include 8 that received one-star for all 8 quarterly intervals, 4 that received one-star for 7 out of the 8 quarterly intervals, and 3 that received one-star for 6 out of the 8 quarterly intervals dating back to January 2020: “many of them have been among the lowest-rated LTCs for many years.  Others appear to have generally deteriorated over time and remained low. Some experienced fast and precipitous declines, and have remained among the lowest-rated in recent years.”

Of the $14 billion spent for Medicaid in fiscal year 2019, Medicaid paid approximately $1.74 billion to LTCs. The 15 lowest-rated LTCs together received $105 million in Medicaid funds in state fiscal year 2019, or 6% of the amount that the Medicaid program paid to all LTCs. One of the 15 lowest-rated LTCs received more than $15 million in Medicaid funds both in fiscal year 2018 and in fiscal year 2019. Fifteen of the lowest-rated LTCs are for-profit organizations, with most operating as a corporation or limited liability company. At least one study has shown that for-profit LTCs increase the short-term mortality risk for patients and lead to declines in other measures of patient well-being, such as lower mobility, while increasing taxpayer costs. Studies have also demonstrated that staffing levels at for-profit LTCs are considerably lower than their government and non-profit counterparts. There is a strong correlation between overall staffing levels and outcomes, with decreases in staffing leading to worse outcomes, including with regard to mortality. A number of New Jersey LTCs have closed in the past six months and all of these reported closures are not-for-profit facilities: “This trend is worrisome given the above-referenced correlations between outcomes and staffing at these facilities in relation to their for-profit counterparts.”


If you or a loved one suffered injuries (or worse) while a resident of a nursing home in New Jersey or in another U.S. state due to a nursing home fall, nursing home aspiration, nursing home neglect, nursing home negligence, nursing home abuse, nursing home under-staffing, or the nursing home failing to properly care for a vulnerable adult, you should promptly find a nursing home negligence lawyer in New Jersey or in your state who may investigate your nursing home claim for you and file a nursing home claim on your behalf or behalf of your loved one, if appropriate.

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