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A man walks across the rear lawn of the New Jersey Statehouse in Trenton.
TRENTON — State lawmakers are crafting a bill that would cap annual rental increases for nursing home operators that lease their space of operation.
A4336 states that no landlord leasing or renting property to a tenant operating a nursing home shall raise annual rent by more than 4%.
The bill intends to help limit hefty rental increases to nursing homes. Without capping increases, nursing homes could be forced to pay rental prices out of care-market value, said Laurie Facciarossa Brewer, New Jersey’s long-term care ombudsman.
However, the bill allows for annual increases over that threshold for certain circumstances, such as for maintaining utilities or completing reasonable building renovations.
That increase would have to be approved through state Superior Court, according to the bill.
“This bill would help ensure that more money is available for resident care,” Brewer said recently.
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The bill passed the Assembly Health Committee on Sept. 15 by an 8-1-2 vote. The bill now heads to the Assembly Aging and Senior Services Committee.
A Senate version, S2890, has been referred to the Senate Health, Human Services and Senior Citizens Committee.
John Indyk, vice president of the Health Care Association of New Jersey, said a more equitable way to assess increases would be if facilities filed cost reports, something that had been mandated until 2015, before then Gov. Chris Christie ended the requirement.
Cost reports, Indyk said, break down how much a facility spends on various expenditures, which, in turn, gauges Medicaid reimbursement rates.
Indyk said the bill may incentivize annual rental increases.
“We’re all for paying reasonable rates — I get it about related transaction parties and concerns about that — but, if we had cost reports, we could determine what’s a reasonable rate,” Indyk said.
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Assemblywoman DeAnne DeFuccio, R-Bergen, Passaic, did not vote, and Assemblywomen Bethanne McCarthy Patrick, R-Salem, Gloucester, Cumberland, and Nancy Munoz, R-Morris, Somerset, Union, abstained, according to the Legislature’s website.
Assemblyman Brian Rumpf, R-Ocean, Burlington, Atlantic, was the sole committee member to vote against the legislation.
Rumpf, like Indyk, feels New Jersey reissuing a mandate for cost reports would be the best way to address the issue, adding he doesn’t believe government should have as much of a role in determining rental payments for nursing homes.
“I think that’s a better way to go,” Rumpf said of cost reports. “If it’s determined not enough money is being put into property improvements or not enough money is being put into staffing, or whatever the proponent might be, there would be the opportunity for corrective action to be suggested or imposed by the Department of Health.”
Rumpf also said the bill didn’t explain the circumstances as to why the threshold was set at 4%.
The bill is sponsored by three Assembly Democrats.
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Assemblyman Herb Conaway, D-Burlington, couldn’t be reached for comment Monday.
Assemblywoman Shanique Speight, D-Essex, also did not return phone calls seeking comment.
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A man walks across the rear lawn of the New Jersey Statehouse in Trenton.
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