How could NJ group home reform bills impact the industry?

Burns and broken bones. Understaffed homes and persistent medication errors. Preventable deaths and basic needs such as food and cleanliness ignored.

The failings of New Jersey’s $1.5 billion group home system for adults with developmental and intellectual disabilities are vast and often heartbreaking, NorthJersey.com found in its yearlong investigation Hidden at Home ― and the solutions are both elusive and fragmented.

Legislation to make monitoring cameras more readily available in group homes has languished in Trenton for years. A law requiring the state to make six unannounced visits a year was scaled back to two before passage in 2017. And a requirement to call 911 in an emergency hits low-paid workers ― and not the group home company ― with fines when those calls are not made.

And as NorthJersey.com has reported, the state Department of Human Services, which oversees the group home system, rarely uses the powers at its disposal to keep problem companies in check.

The latest legislative fixes, a seven-bill package now working its way through the process, includes one that would allow the first-ever fines to be levied against group home providers.

But the bills don’t change how investigations of abuse, neglect and exploitation of group home residents are conducted, a major complaint of families and advocates who want to see a system overhaul. Now, most investigations are handled by the group homes themselves. In place of action, two years of study is baked into the reforms, which offer little in the way of additional funding.

“Most often, these allegations are investigated … within the agency themselves and by DHS,” said Yana Mermel, whose daughter suffered abuse and neglect in a group home, detailed in an NJ Advance Media report. “And essentially, what ends up happening is a situation where it’s a fox guarding the henhouse.”

What’s more, the package is largely scripted by the Department of Human Services, which long ago lost the trust of many families who rely on it to serve their loved ones with conditions such as autism, cerebral palsy, and Down syndrome.

“Most of this is their initiative,” said Sen. Joseph Vitale, D-Middlesex, the sponsor of the bill package and chair of the Senate Health, Human Services and Senior Citizens committee. “So this is their idea for systemic reform.”

Group home providers, meanwhile, have successfully beaten back one of the most important bills in the package, which aims to control spending and executive pay. They also won changes to a measure that imposes fines, limiting the amount of the sanctions. That bill, S3750, moved out of committee on May 19.

Many advocates and families want more.

“This is a positive step forward… It introduces mechanisms of accountability and financial consequences, but it doesn’t address the root cause of the problem,” said Pat Miller, New Jersey chair of the National Council on Severe Autism.

Parent advocates Donna Icovino and Cyndy Hayes published a white paper offering solutions, including an overhaul of the way investigations are conducted. With a gubernatorial election on the horizon, the pair are pinning their hopes on the next governor to step in with reforms.

“It’s that pervasive, it’s that hidden,” Icovino said. “And it’s not going to change unless we revamp the system in a very deliberate and a complete overhaul, and I believe it has to come from the governor.”

Debate over fines

After outcry from providers who argued that the proposed fines would unfairly punish group homes that made mistakes instead of focusing on “bad actors,” Vitale inserted language that requires the state to consider a company’s history.

The amendments say that when determining the amount of a fine, the state shall examine whether a company has “a history or pattern of repeated violations,” its compliance with investigations and plans of correction, and whether the company has taken action to prevent incidents in the future.

“Who’s to say that DHS actually will not just give sort of silly fines of $100, $500, completely meaningless fines that would further deter these actions?” Mermel said.

Before many of the fines could be levied, Human Services would have to take substantial action against a group home provider. But the state infrequently uses its existing powers, and just 2% of all reported incidents are investigated by the department, NorthJersey.com found, so even under the proposed structure, fines could be rare.

For example, companies would be fined up to:

• $5,000 every three months if assigned a Quality Management Team — a panel of state officials that meets periodically to review and fix what’s going wrong at a company. Only six companies have faced this highest level of state oversight. The bill says the state “may” impose this fine, but doesn’t appear to require it, like the other measures.

• $25,000 for a substantiated finding from the state Office of Investigations in six categories of serious abuse, neglect and exploitation. But this state office investigates a sliver of such cases each year: In 2024, the Office of Investigations substantiated about 70 cases of abuse, neglect and exploitation — compared with 1,000 substantiated by group homes themselves, according to state incident data.

• $10,000 for a second provisional license given to homes where inspectors find issues that “directly endanger the health, safety or wellbeing” of residents. In the last seven years, the state issued an average of 42 provisional licenses a year — there are more than 2,000 homes across the state. And documents show that fewer than 60 homes received a “repeat” or “second” provisional license during that time — meaning a company did not correct issues after inspectors returned.

• $10,000 on the third time they fail to run required criminal background checks or drug testing of their workers. First, a company would be required to write a plan of correction, and after a second violation, they wouldn’t be allowed to accept new residents. The state currently has the power to suspend admissions but has rarely used it: In the last decade, it has halted admissions across all homes for just four providers.

Proposed fines would also be imposed on companies that operate without a license when one is required, don’t submit a plan of correction, employ someone who was placed on the Central Registry of Offenders or child abuse registry, and fail to conduct an internal investigation and submit a report within six months.

Group home companies predict the fines will affect who they serve.

Lisa Coscia, president of Beacon Specialized Living, wrote in an email blast that “penalties should not be so large agencies would need to cut programs or risk quality. Providers will be hesitant to serve a behaviorally complex population for fear of being penalized when injuries occur, which they will.”

The fines should be reinvested in the frontline workforce of direct support professionals, or DSPs, suggested Miller, of the National Council on Severe Autism.

“Because they need the hands-on, person-centered training and planning and ongoing career development,” Miller said. “Because right now we have high turnover, medication errors, more incidents of neglect, abuse and death.”

Bill to rein in executive compensation stalled

At the same time, a measure designed to rein in executive compensation and ensure that money paid to providers is largely spent to benefit group home residents is stalled in committee. Vitale said it was not put up for a vote due to “pushback from the provider community” at an earlier hearing.

He said providers felt it was “too onerous in terms of how we require them to spend the dollars, how much they can earn.” He called the public discussion in December a good first step, but can’t say when the bill might come up for a vote.

“The bill is still active,” the senator said. “We’re still kicking it around.”

The measure limits to 15% the amount of program revenue providers may allocate annually to executive compensation, general and administrative expenses, management fees, interest and lease payments, and other similar expenses — plus profit or retained earnings.

If a provider exceeds the 15% it would be considered a violation of health and safety standards for resident care. The excess could be recovered by the state and potentially lead to the appointment of a receiver.

Providers call it government overreach, and say it could put them out of business, prevent them from finding top-flight candidates for executive positions, and stifle flexibility, innovation and growth.

“There will be no expansion in the future, because without the reserves, the agencies can’t purchase homes to make more beds available to people sitting on the waiting list, people living in nursing homes, people in the [developmental centers] that want to live in the community,” said Valerie Sellers, CEO of the New Jersey Association of Community Providers, in an interview.

“You’ve got thousands sitting waiting for community services,” Sellers said. “And if those bills pass, expansion in this community will stop.”

“It will result in poorer quality care due to brain drain, an inability to innovate, and less money for care from increased costs of compliance,” Matt Binder, the senior advocacy specialist at Easterseals New Jersey, wrote in testimony last year.

New Concepts for Living, a Bergen County-based group home provider, has been expanding, creating a mix of residences, including harder-to-find medically supportive homes.

“Without that financial flexibility to innovate and hold reserves, agencies would not be able to acquire, expand or refurbish new housing … maintain its current facilities, such as basic roof, plumbing and other repairs; incorporate new technologies to ensure its services and facilities stay current and modern; and more,” CEO Steve Setteducati said earlier this year.

Vitale, for his part, said, “The sky is always falling, right?”

“I don’t mean to be glib about it — they all have their legitimate concerns. And there are some more profitable than others,” he added. “Even nonprofits have to make a profit. But at some point it’s how much is enough, what’s reasonable?”

The limits on pay in the bill are stark. It puts a $250,000 ceiling on an employee’s salary — including bonuses — for agencies that receive $20 million or more in revenue from the Division of Developmental Disabilities in the state Department of Human Services.

Providers receiving less than $5 million are capped at $187,500, between $5 million and $10 million limited to $212,500 for an individual salary, and $225,000 for those between $10 million and $20 million in revenue.

Among New Jersey’s largest nonprofits that run group homes, executive paychecks range from $428,000 to $1.2 million, according to tax filings.

Meanwhile, pay for the workers who care for residents around-the-clock average $20 an hour, far below the $25-an-hour goal that advocates say is a living wage.

Paul Aronsohn, the ombudsman for individuals with developmental disabilities, said his office receives calls every day about basic needs of residents not being met, and that understanding how group homes spend taxpayer and personal funds is critical to ensuring residents receive quality care.

“I believe that transparency is even more important than caps and similar directives related to executive compensation and overall agency spending,” Aronsohn said. “We all need to know how money is being spent…and not being spent.”

This debate is playing out against a backdrop of potential drastic federal cuts to Medicaid, which could mean New Jersey loses hundreds of millions of dollars to fund group homes.

“We are terrified at how we are going to maintain a continuity of care, given the proposed federal cuts, costly regulation. It’s going to exacerbate that strain that we face,” said Elizabeth Drobit-Blair, CEO of provider QMANJ.

What’s missing

The pending seven-bill package is nearly silent on investigations of abuse, neglect and exploitation of group home residents, most of which are handled by the group homes themselves.

Some families say it’s time to upend the system and move investigations out of the hands of providers and the state Department of Human Services, into the Office of the Attorney General or an independent agency, pointing to New York as an example.

“The New York State Justice Center is created specifically for this reason to be a third-party entity which investigates these allegations, because, again, right now, what we have is essentially DHS investigating themselves,” Mermel said.

Sen. Robert Singer, R-Ocean, said he planned to introduce a bill creating a special unit in the Attorney General’s Office specially trained to handle matters involving the care of people with intellectual and developmental disabilities.

Vitale’s bills do not address the state’s role in investigating group home deaths: NorthJersey.com found that the state does not investigate all unexpected deaths of group home residents, about 120 a year on average. The state also fails to track the cause of each death. Of the roughly 1,000 deaths of group home residents between 2019 and 2024, more than 25% were listed as “other” — the most frequent cause.

Instead, one bill would create an advisory committee to review certain deaths of people with developmental disabilities, as well as cases of abuse, neglect or exploitation. It gives the committee two years to conduct the review.

This bill, too, would give the power to the state Department of Human Services, calling for its commissioner, currently Sarah Adelman, to appoint all 13 members — one of whom would be a person with an intellectual or developmental disability and two family members of such a person. The committee’s work would be confidential, with its findings and recommendations to be reviewed by the commissioner, who then would prepare a report for the governor.

Another piece of pending legislation would allocate $240,000 to the department to create a full-time “director of medical services” who could review complex medical cases. While it would add a needed layer of oversight to multifaceted abuse, neglect and death cases, it wouldn’t address the absence of a medical background in the department’s core group of 45 investigators.

The bills would need to be voted on by the full Senate and Assembly and signed by the governor to become law.

Investigators are supposed to have registered nursing licenses with four years of experience on the job. But most of the 45 members of the team do not have nursing licenses, a NorthJersey.com analysis of licensing records found.

However, the state allows another route to the job in the absence of a nursing license: A bachelor’s degree with three years of experience in a health or human services setting can suffice. A master’s in public health can reduce the required experience to two years.

Other legislation

Beyond the Vitale reform package, other legislation aims to address medication errors in group homes, which are not required to have nurses or other licensed medical professionals dispense medications or oversee their delivery.

Assemblywoman Aura Dunn, R-Morris, introduced a bill in March to require a nurse — or a certified medication aide working under the supervision of a nurse — to administer medication in group homes and supervised apartments.

Dunn introduced the measure in response to meeting the parents of Katie Moronski, who died two days after moving into a group home from “Acute intoxication due to Bupropion, Olanzapine, Fluoxetine and Lorazepam.” The first three drugs were part of Katie’s regular medication regimen, which the group home is responsible for dispensing. Records show the lorazepam was administered in a hospital emergency room in response to a seizure.

NorthJersey.com revealed the persistent medication errors that put group home residents at risk, including Katie’s death. Other residents suffer when workers fail to administer medication. That was the case of resident Jacquelyn Kaminski, who was hospitalized after the staff repeatedly missed her epilepsy medication and she had nearly 30 seizures in five hours.

Other parents continue to press legislators to consider a bill that could lead to more cameras in group home common areas.

Vitale said the intent is “noble,” but he is still weighing privacy and workforce concerns.

“I haven’t made a decision yet, but I do plan to meet with the community soon,” Vitale said.

This article originally appeared on NorthJersey.com: How NJ group home reform bills could impact the industry