Ownership Oversight Rules, Liability Shield Rollback: State Nursing Home Reform Efforts Gain Momentum

As the policy response to the COVID-19 disaster in nursing homes shifts from managing an active crisis to longer-term reforms, several states are seeing progress on legislation that will bring new rules and transparency to the sector.

The New Jersey Senate and Assembly unanimously passed a bill late last month that would include a review process for the purchase of any nursing homes in the state, as well as for the purchase of additional licensed beds.

The bipartisan measure, first covered by NJ Spotlight News, is expected to be signed by N.J. Gov. Phil Murphy, though he does not appear to have done so as of Thursday.


Under the requirements of the bill — which was introduced in July 2020 after a report found a wide range of problems with both the skilled nursing sector in New Jersey and state oversight of providers — any prospective new owner of a nursing home has to submit an application to the New Jersey Department of Health with several pieces of information, including:

  • Identification of the current owners of the nursing home.
  • Identification “of 100% of the proposed new owners, including the names and addresses of all principals and interested parties”
  • An organizational chart with parent corporations and wholly owned subsidiaries, if applicable

Assembly amendments to the bill adopted on March 1 create four levels of review based on whether the applicant to own the nursing home “has ever owned or operated a licensed health care facility in New Jersey, and whether the transfer would pertain to a controlling or a non-controlling interest in the nursing home.”

Under those amendments, “only certain applicants” would have to undergo a criminal background check and hold a public hearing on the application. The public hearing requirement would apply for a buyer that involves an out-of-state entity, according to NJ Spotlight News.


Advocates expressed support for the bill to the publication, describing it as “a critical step forward” on reform for long-term care in New Jersey.

“Residents, families, staff and the public have a right to know who is applying for ownership of a facility and confidence that a public and thorough review process will be completed,” Evelyn Liebman, director of advocacy for AARP New Jersey, told NJ Spotlight News.

Across the Hudson River, lawmakers in New York passed a raft of legislation rolling back increasingly controversial immunity protections for health care facilities, administrators, and executives.

Bill 5177, introduced by state Sen. Alessandra Biaggi, repeals protections from liability that were granted to nursing homes, hospitals, and other health care facilities during the COVID-19 pandemic, specifically rolling back Article 30-D. That section took steps to protect facilities and professionals from liability from treating COVID-19 patients under conditions related to the public health emergency.

Some of those provisions had been rolled back last summer, but the 2021 reform package in the Empire State also came with a raft of other measures, including rules around changes to ownership or operations and proposals designed to make asset and ownership information public.

The bill was delivered to New York Gov. Andrew Cuomo, who has been dealing with a barrage of criticism and scandal related to his handling of COVID-19 death data in nursing homes, on Thursday, according to Spectrum News reporter Morgan Mckay.

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