Makes certain changes to regulation of health care service firms, the official text

[First Reprint]

SENATE, No. 3463

STATE OF NEW JERSEY

222nd LEGISLATURE

INTRODUCED FEBRUARY 12, 2026

Sponsored by:

Senator  GORDON M. JOHNSON

District 37 (Bergen)

Senator  ANTHONY M. BUCCO

District 25 (Morris and Passaic)

Assemblyman  ROY FREIMAN

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Assemblyman  ALEXANDER "AVI" SCHNALL

District 30 (Monmouth and Ocean)

Assemblyman  CHRISTOPHER P. DEPHILLIPS

District 40 (Bergen, Essex and Passaic)

Co-Sponsored by:

Senators McKnight, Mukherji, Assemblyman Tully,
Assemblywomen Murphy and Brennan

SYNOPSIS

Makes certain changes to regulation of health care
service firms.

CURRENT VERSION OF TEXT

As amended by the General Assembly on June 11, 2026.

An Act concerning health care service firms and amending P.L.2002,
c.126.

Be It
Enacted by the Senate and General Assembly of
the State of New Jersey:

1. Section 1 of P.L.2002,
c.126 (C.34:8-45.1) is amended to read as follows:

1. a. Notwithstanding any
other law or regulation to the contrary, an employment agency required to be
licensed pursuant to P.L.1989, c.331 (C.34:8-43 et al.), or any other firm,
company, business, agency, or other entity that is not a home health care agency
licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.) or a hospice licensed
pursuant to P.L.1997, c.78 (C.26:2H-79 et seq.), which employs, places,
arranges for the placement of, or in any way refers, an individual to provide
companion services, health care services, or personal care services in the
personal residence of a person with a disability or who is age 60 or older,
regardless of the title by which the provider of the services is known, shall
be registered as a Health Care Service Firm and shall be subject to the rules
and regulations governing Health Care Service Firms adopted by the Division of
Consumer Affairs in the Department of Law and Public Safety.  The Division of
Consumer Affairs is authorized to enforce the health care service firm
registration requirement, and the provisions of P.L.1989, c.331 (C.34:8-43 et
al.), upon any person whose operations are subject to this section, whether the
operations include the direct employment of individuals, the use of an Internet
website or application, or any other process or business model.

As used in this section:

"Companion services"
means non-medical, basic supervision and socialization services which do not
include assistance with activities of daily living, and which are provided in
the individual's home. Companion services may include the performance of
household chores.

"Health care
services" means any services rendered for the purpose of maintaining or
restoring an individual's physical or mental health or any health-related
services, and for which a license or certification is required as a
pre-condition to the rendering of such services.

"Personal care
services" means services performed by licensed or certified personnel for
the purpose of assisting an individual with activities of daily living that may
involve physical contact. Services include, but are not limited to, bathing,
toileting, transferring, dressing, grooming, and assistance with ambulation,
exercise, or other aspects of personal hygiene.

b.    (Deleted by amendment,
P.L.2014, c.29)

c.    As a condition of being
registered under P.L.1989, c.331 (C.34:8-43 et al.), a health care service firm
shall obtain within 12 months of registration accreditation from an accrediting
body that is recognized by the Commissioner of Human Services as an accrediting
body for homemaker agencies participating in the Medicaid program, as set forth
at N.J.A.C.10:60-1.2.  For purposes of accreditation pursuant to this
subsection, the accrediting body shall apply the standards set forth in
N.J.A.C.13:37-14.1 et seq. and N.J.A.C.13:45B-13.1 et seq., as applicable.

d.    As a condition of
registration under P.L.1989, c.331 (C.34:8-43 et al.):

(1)  All health care service
firms shall annually submit to the director financial statements prepared by
the firm, which shall be consistent with the firm's tax filing with the State
for the year covered by the financial statements.

(2)  In addition to the
financial statements required pursuant to paragraph (1) of this subsection, a
health care service firm that receives more than [$250,000] $500,000
for the provision of New Jersey Medicaid Personal Care Assistance services
shall submit to the director an audit the third calendar year after the date of
registration or on December 30, 2022, whichever date is later, and every third
year thereafter.  The audit shall be submitted no later than September 30th
of the calendar year in which it is due.

(3)  In addition to the
financial statements required pursuant to paragraph (1) of this subsection, a
health care service firm that generates $10 million or more in gross income in
a year shall submit to the director an audit for that year, except that an audit
required by this paragraph shall not be required to be submitted prior to
December 30, 2022.  The audit shall be submitted no later than September 30th
of the calendar year in which it is due.

(4) (a) In addition to the
financial statements required pursuant to paragraph (1) of this subsection, a
health care service firm that receives less than [$250,000] $500,000
in compensation for the provision of New Jersey Medicaid Personal Care
Assistance services and that generates [$1
million or more, but]
less than $10 million[,] in gross
income in a year shall submit to the director a report for that year, except
that a report required by this paragraph shall not be required to be submitted
prior to December 30, 2022. The report shall [be
prepared by an independent third-party practitioner based on a review of the
firm's financial statements and records, general management, and internal
controls, which review shall be conducted in compliance with the standards and
procedures developed by the director pursuant to subsection b. of section 2 of
P.L.2014, c.29 (C.34:8-45.1a).]
include information concerning:

(i)   the health care
service firm’s insurance coverages;

(ii)  any litigation the
health care service firm is a party to and a list of all regulatory actions
taken by the Division of Consumer Affairs in the Department of Law and Public
Safety against the health care service firm, including any disposition of same
for the previous three years;

(iii) any independent
contractors used by the health care service firm for the subject year; and

(iv) transactions and
liabilities that exceed 50 percent of the firm’s total billings or liabilities,
as appropriate.

If the Division of Consumer
Affairs in the Department of Law and Public Safety determines that, based on the
information provided by the health care service firm in the report, there is
reason to doubt the health care service firm’s financial viability, the
division may seek additional information from the health care service firm or
make an adverse finding and order the health care service firm to take
corrective action.  Once the health care service firm complies with or
completes the terms of any ordered corrective action, the division shall deem
the health care service firm compliant with the requirements of this subsection.

(b)  If the division makes
adverse findings against a firm upon review of a report submitted pursuant to
subparagraph (a) of this paragraph, the director shall order such corrective
action as the director deems appropriate, and, upon compliance with or completion
of the corrective action, shall require the firm to obtain a separate review of
the firm's data for that year, which shall be conducted by a different
independent third-party practitioner than the one that furnished the original
report, and shall be based on the standards and procedures developed by the
director pursuant to subsection b. of section 2 of P.L.2014, c.29
(C.34:8-45.1a).  The firm shall additionally be required to submit to the
director an audit for the calendar year next following the year for which the
adverse finding was made, regardless of the firm's gross income for the year.

An audit required pursuant to
this paragraph shall be conducted by a certified public accountant, who is
licensed by the State of New Jersey or by any other jurisdiction of the
United States, and shall encompass an examination of the subject firm's
financial records, financial statements, the general management of its
operations, and its internal control systems.  The audit shall include an audit
report with an unqualified opinion and shall be accompanied by any management
letters prepared by the auditor in connection with the audit commenting on the
internal controls or management practices of the health care service firm. The
audit shall be divided into two components: compliance and financial.  The
compliance component of the audit shall evaluate the firm's compliance with
relevant laws and regulations governing health care service firms.  The financial
component shall include an audit of the financial statements and accompanying
notes, as specified in the Statements on Auditing Standards issued by the
American Institute of Certified Public Accountants.

e.    In addition to any other
penalty provided by law, a person shall be liable for a penalty of $500 per day
for each day that the person continues to operate a firm without registering as
required under this section.  The penalty shall be collected by the Director of
the Division of Consumer Affairs in a summary proceeding in accordance with the
"Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et
seq.).

(cf: P.L.2020, c.132, s.1)

12. Section 2 of P.L.2014, c.29 (C. 34:8-45.1a) is
amended to read as follows:

2.   a.
The Director of the Division of Consumer Affairs in the Department of Law and
Public Safety shall enter into a memorandum of understanding with an
accrediting body chosen by the director through appropriate procurement
processes authorized to accredit a health care service firm pursuant to
subsection c. of section 1 of P.L.2002, c.126 (C.34:8-45.1).  The memorandum of
understanding shall establish the standards for accreditation and for reporting
the results of audits performed pursuant to subsection d. of section 1 of
P.L.2002, c.126 to the Division.

b.   [The director shall, in consultation with
representatives of health care service firms registered with the division,
develop an agreed-upon set of standards and procedures for independent third
party practitioners to review health care service firm financial statements and
records, general management, and internal controls pursuant to paragraph (4) of
subsection d. of section 1 of P.L.2002, c.126 (C.34:8-45.1).  At a minimum, the
standards and procedures developed pursuant to this subsection shall address:

(1) the
minimum educational, training, and professional certification qualifications
for independent third party practitioners performing reviews of health care
service firm financial statements and records;

(2) the
data points and metrics to be included in a review of a health care service
firm's financial statements and records, general management, and internal
controls which shall include, at a minimum, verification of the accreditation
and licensing status of the firm; review of the firm's ownership structure;
review of contracts and funding sources as well as payments, cash transactions,
and reconciliation of account balances; review of the adequacy of the firm's
insurance coverage; review of billing practices and invoices to ensure the
adequacy of supporting documentation and the inclusion of appropriate
authorizations; review of any history of litigation involving the firm,
regulatory actions taken against the firm, or past audits of the firm; review
of the use of independent contractors; and review of large transactions and
liabilities that exceed a specified percentage of the firm's total billings or
liabilities, as appropriate; and

(3) the
thresholds and requirements for the division to make an adverse finding and
take corrective action against a firm based upon a review of an independent
third party report concerning the firm's financial statements and records.] (Deleted by amendment,
P.L. , c. ) (pending before the
Legislature as this bill). 1

(cf:
P.L.2020, c.132, s.2)

1[2.]  3.1 The Division
of Consumer Affairs in the Department of Law and Public Safety shall adopt
rules and regulations, in accordance with the “Administrative Procedure Act,”
P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary to effectuate the
provisions of this act.

1[3.]  4.1  This
act shall take effect immediately.