New Jersey is placing tougher ownership documentation requirements on nursing home operators in an effort to boost transparency and better track facility purchases within the state. 

The legislation, A.4477, was signed into law late Wednesday by Gov. Phil Murphy (D). Prior to transferring ownership of a long-term care facility, operators must now submit the identifications and addresses of current and proposed new owners.

An organizational chart of the new company, a copy of the sale agreement and a list of facilities owned by the new owner within the previous five years must also be submitted to the state. The ownership transfer will then be subject to the state for approval.  

The Health Care Association of New Jersey expressed support for the measure. 

“Long term care is among the most highly regulated industries in New Jersey,” Andrew Aronson, association president, said in a statement to local media. “The Department of Health must approve all acquisitions and transfers of facilities and has for many years required applicants to disclose 100% of their ownership.”

A group of state lawmakers who sponsored the legislation  in a statement argued the mandate is necessary because changes in for-profit nursing home ownership “calls into question the intentions of the owners, who may be putting the expectations of shareholders over the needs of elderly, disabled and vulnerable nursing home residents.” 

Federal lawmakers have also pushed for greater transparency and oversight of for-profit nursing homes and their ownership. During a Congressional hearing in March, witnesses accused for-profit nursing home chains of manipulating their financial findings and cost reports to hide profits.