2021 New Jersey Revised Statutes
Title 26 - Health and Vital Statistics
Section 26:2H-7.25 - Application prior to transferring ownership of a nursing home.

26:2H-7.25 Application prior to transferring ownership of a nursing home.

2. a. Prior to transferring ownership of a nursing home, the prospective new owner shall submit an application to the Department of Health that meets the requirements of section 3 of this act. The application shall include the following items:

(1) the transfer of ownership fee established by the department;

(2) a cover letter stating the applicant's intent to purchase the nursing home, and identification of the nursing home by name, address, county, and number and type of licensed beds;

(3) a description of the proposed transaction, including:

(a) identification of the current owners of the nursing home;

(b) identification of 100 percent of the proposed new owners, including the names and addresses of all principals and interested parties; and

(c) if applicable, a copy of an organizational chart, including parent corporations and wholly-owned subsidiaries; and

(4) a copy of the agreement of sale and, if applicable, a copy of any lease and management agreements.

The applicant may additionally submit a summary of the application materials that includes such details concerning the application as are required by the department, but that omits any proprietary information in the contracts for the sale or management of the nursing home, and any home addresses, social security numbers, or other personal information of any proposed owner, principal, or interested party. A summary prepared by the applicant may only be used for the purposes of posting information concerning the application on the department's Internet website pursuant to paragraph (1) of subsection d. of this section.

b. Information submitted pursuant to subsection a. of this section or subsection a. of section 3 of this act by an applicant for transfer of ownership of a nursing home shall not be used in any adverse licensure action or disciplinary action against the applicant.

c. Approval of a transfer of ownership of a nursing home is contingent upon:

(1) a review of the applicant's history of disciplinary actions assessed in connection with any other facility owned, operated, or managed by the proposed owners and principals in New Jersey, and a determination based on that review that approval of the transfer of ownership will not present a material risk to the health, safety, or welfare of residents of the nursing home that is the subject of the transfer application; and

(2) payment of all outstanding and issued Medicaid audit claims and State penalties issued by the department against the current owner, unless such claims remain under appeal, in which case, if the claim remains under appeal, the applicant shall submit written verification that either the applicant or the current owners of the nursing home will assume responsibility for payment of such audit recoveries and State penalties at the conclusion of the appeal.

d. (1) A copy of each transfer of ownership application, or a summary of the application prepared by the applicant that includes the names of the proposed owners, principals, and interested parties, shall be published on the department's Internet website no later than 30 days after the date the department receives the application; provided that the department shall redact the materials to the extent necessary to ensure that no proprietary information in the contracts for the sale or management of the nursing home, and no home addresses, social security numbers, or other personal information of any proposed owner, principal, or interested party, is included in the materials published on the department's Internet website.

(2) Each application for the transfer of ownership of a nursing home shall be subject to a public comment period that shall commence not less than 30 days after the date the application is received by the department, and which comment period shall remain open for a period of not less than 30 days. The department shall establish a procedure for acknowledging receipt of public comments submitted. The text of comments submitted on a transfer of ownership application shall not be published on the department's Internet website, but shall be considered a government record pursuant to P.L.1963, c.73 (C.47:1A-1 et seq.) or P.L.2001, c.404 (C.47:1A-5 et al.).

e. The Department shall complete review of any transfer of ownership application submitted pursuant to subsection a. of this section no later than 120 days after the date the application is received. If a transfer of ownership application has been reviewed and deemed acceptable, the department shall send an approval letter to the applicant.

f. Within five days after the transaction has been completed, the applicant shall submit to the department certification of closing from an attorney or a notarized letter from the applicant stating the date on which the transaction occurred, along with an executed bill of sale or assignment. To facilitate the timely transfer of Medicare and Medicaid provider numbers, the department shall issue the new license to the applicant no later than 30 days after the date the notice is received by the department.

g. No nursing home may delegate substantial management control of the nursing home's operations to a third party entity without providing prior written notice to the department. The notice provided by the owners of the facility to the department shall include:

(1) a copy of the management agreement;

(2) an organizational chart of the third party entity's proposed management team for the nursing home;

(3) the names and addresses of all owners, principals, and interested parties of the third party entity; and

(4) a list of any other licensed health care facilities owned, operated, or managed by the third party entity in any state or territory of the United States or in the District of Columbia for the preceding three years, along with owner-certified financial statements for each such facility for the last three years during which the facility was owned, operated, or managed by the third party entity. If the third party entity owned, operated, or managed facilities located outside New Jersey in the preceding three years, the application shall include disclosures by the third party entity of any enforcement actions imposed during that period of time against any facility owned, operated, or managed by the third party entity in any jurisdiction.

h. (1) Upon request by the Commissioner of Health and subject to the provisions of P.L.1968, c.266 (C.52:9M-1 et seq.), the State Commission of Investigation shall undertake an investigation of one or more nursing homes in the State or the entities owning, operating, or managing one or more nursing homes in the State, provided that, if the commission determines that the request for an investigation from Commissioner of Health exceeds the commission's capacity to perform such investigations, the commission may advise the Commissioner of Health as to any requests upon which it finds itself unable to proceed. The State Commission of Investigation may, at any time, submit to the Governor, the Commissioners of Health and Human Services, and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature, recommendations for administrative or legislative action to improve oversight and transparency in nursing homes.

(2) The State Auditor shall undertake a review of the oversight of nursing homes by the Department of Health and the Department of Human Services at least once every three years, with particular focus on compliance with federal inspection requirements, responses to complaints and response times in reviewing complaints, and actions taken to follow up on violations affecting the health, safety, or welfare of residents.

i. As used in sections 2 through 4 of this act:

"Interested party means any individual or entity with an interest of one percent or more but less than five percent in an applicant to receive a transfer of ownership of a nursing home or the land or other real property on which a nursing home is located.

"Principal" means any individual or entity with an interest of five percent or more in an applicant to receive a transfer of ownership of a nursing home or the land or real property on which a nursing home is located.

L.2021, c.95, s.2.