LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
SENATE, No. 405
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: JULY 6, 2023
SUMMARY
Synopsis: Codifies, and increases under certain circumstances, current minimum
Medicaid per diem reimbursement rates for assisted living residences,
comprehensive personal care homes, and assisted living programs;
makes appropriation.
Type of Impact: Annual increase in State expenditures and revenue; General Fund.
Agencies Affected: Department of Human Services.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Cost Increase Indeterminate
State Revenue Increase Indeterminate
 The Office of Legislative Services (OLS) estimates that this bill will result in an indeterminate
increase in State Medicaid costs due to the implementation of an enhanced Medicaid
reimbursement rate for those assisted living residences or comprehensive care homes that are
Medicaid partner communities, as defined under the bill. Generally, this enhanced rate will
temporarily provide newly built and licensed facilities, which plan to mainly serve Medicaid
residents, the maximum enhanced Medicaid reimbursement rate currently allowed by the
department while the facility works towards meeting its residential capacity. As a Medicaid
expenditure, this provision will also increase annual State revenue in the form of federal
Medicaid reimbursements.
 The OLS notes that the other provisions of the bill establishing base per diem rates, as well as
the tiered enhancements to those rates based upon a facility’s Medicaid census, will have no
revenue or expenditure impact on the State as those provisions of the bill codify existing State
policy. According to the department, these provisions of the bill are projected to cost the State
$13.0 million annually, offset by a $6.5 million increase in State revenue in the form of federal
Medicaid reimbursements, for a net State cost of $6.5 million.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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BILL DESCRIPTION
The bill provides that the minimum per diem rate for Medicaid beneficiaries residing in an
assisted living residence, comprehensive personal care home, or assisted living program will be
$89.50, $79.50, and $89.50, respectively.
The bill also increases the reimbursement rate for an assisted living residence or
comprehensive personal care home based on the percentage of residents who are Medicaid
enrollees. In providing increased per diem rates, the bill distinguishes between assisted living
residences and comprehensive personal care homes that constitute a Medicaid partner
community and those that do not. A Medicaid partner community is a facility that: 1) has
participated in the NJ FamilyCare program for two or fewer cycles of the annual rate
measurement period, established under the bill, or has submitted its first NJ FamilyCare claim
within the preceding 18 months, whichever period is longer; 2) has provided the NJ
FamilyCare program with a valid land use restriction agreement, which agreement requires the
facility to serve only low-income residents, such that all residents of the facility have an
income below 80 percent of the area median income; 3) has not met the prior two conditions
solely through a facility name change or a change in ownership; and, 4) meets any other
requirements established by the Commissioner of Human Services.
Under the bill, in the case of an assisted living residence or comprehensive personal care home
that is not a Medicaid partner community and with a population of Medicaid beneficiaries that is
at least:
1) 15 percent but less than 30 percent of the total resident population, the per diem rate will be
$99.50 for an assisted living residence and $89.50 for a comprehensive personal care home;
2) 30 percent but less than 50 percent of the total resident population, the per diem rate will be
$104.50 for an assisted living residence and $94.50 for a comprehensive personal care home;
3) 50 percent but less than 70 percent of the total resident population, the per diem rate will be
$119.50 for an assisted living residence and $109.50 for a comprehensive personal care home; and
4) 70 percent up to 100 percent, the per diem rate will be $124.50 for an assisted living
residence and $114.50 for a comprehensive personal care home.
The bill also provides that an assisted living residence or comprehensive personal care
home that is a Medicaid partner community will receive a per diem rate that is $35.00 above
the minimum per diem rate under the bill.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that this bill will result in an indeterminate increase in State Medicaid costs
due to the implementation of an enhanced Medicaid reimbursement rate for those assisted living
residences or comprehensive care homes that are Medicaid partner communities, as defined under
the bill. Generally, this enhanced rate will temporarily provide newly built and licensed facilities,
which plan to mainly serve Medicaid residents, the maximum enhanced Medicaid reimbursement
rate currently allowed by the department while the facility works towards meeting its residential
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capacity. As a Medicaid expenditure, this provision will also increase annual State revenue in the
form of federal Medicaid reimbursements.
For context, the Department of Health website indicates that the State currently licenses 172
assisted living residences and comprehensive personal care homes that accept Medicaid
beneficiaries. However, the OLS cannot determine the number of facilities and residents that
would qualify for the enhanced Medicaid reimbursement rate as a Medicaid partner community,
or how this number may grow under the provisions of the bill.
The OLS notes that the other provisions of the bill establishing base per diem rates, as well as
the tiered enhancements to those rates based upon a facility’s Medicaid census, will have no
revenue or expenditure impact on the State as those provisions of the bill codify existing State
policy. Specifically, the bill codifies: 1) the current minimum per diem reimbursement rates for
Medicaid beneficiaries residing in assisted living residences, comprehensive personal care homes,
and assisted living programs, as established in the FY 2023 Appropriations Act; and 2) the $20.00
assisted living program base rate increase on the $69.50 per diem rate established in the FY 2023
Appropriations Act and the increased per diem rates for assisted living residences and
comprehensive personal care homes based on Medicaid population per the Department of Human
Services Medicaid Newsletter Vol. 32, No. 21. All of these policies were implemented as of July
1, 2022. According to the department, these provisions of the bill are projected to cost the State
$13.0 million annually, offset by a $6.5 million increase in State revenue in the form of federal
Medicaid reimbursements, for a net State cost of $6.5 million.
Section: Human Services
Analyst: Sarah Schmidt
Lead Research Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).