This bill establishes a framework for addressing low-performing nursing homes in New Jersey that receive a one-star rating from the federal Centers for Medicare and Medicaid Services (CMS). If a nursing home receives a one-star rating after previously achieving a higher rating, the Division of Medical Assistance and Health Services in the Department of Human Services (DHS) is required to issue a warning urging improvement and informing the facility of potential sanctions for continued poor performance. Should a nursing home receive a one-star rating for two consecutive quarters, the DHS will evaluate the need for sanctions, which may include limiting new Medicaid admissions or reducing payments under the quality incentive program. If the nursing home receives a one-star rating for three consecutive quarters, more severe sanctions may be imposed, including prohibiting new admissions, removing current Medicaid residents, and halting payments under the quality incentive program.

Additionally, nursing homes with three or more consecutive one-star ratings must submit an improvement plan detailing steps to address quality issues over an 18-month period. The DHS, in consultation with the Department of Health, will review and approve these plans, and noncompliance with the plan will result in ineligibility for Medicaid reimbursement. The bill also mandates annual reporting to the Governor and Legislature on sanctions imposed and the outcomes of improvement plans, while ensuring that the authority of the Department of Health remains intact. The bill aims to enhance the quality of care in nursing homes and implements recommendations from the Office of the State Comptroller's report on low-rated long-term care facilities.