$281.63

Avg Per Diem — Jul 2025

+0.5%

Year-Over-Year Change

Rate Methodology — Cost-Based Prospective Per Diem with Case-Mix (N.J.A.C. 10:63)

New Jersey reimburses NFs under a cost-based prospective per diem with components for Direct Care (case-mix adjusted), Other Direct Care, Indirect Care, and Capital, plus a Pay-for-Performance quality incentive add-on. Rates are set annually on a state fiscal year basis (Jul 1 – Jun 30) using filed cost reports and rebasing periodically. Per diems average ~$281/day across 348 enrolled NFs.

Operator implication: Case-mix coding accuracy on the Direct Care component drives meaningful rate variance. Cost report quality and timing affect rebasing outcomes.

NJ FamilyCare MLTSS — NFs Carved Into Managed Care (since Jul 2014)

Nursing facilities are carved into NJ FamilyCare Managed Long Term Services and Supports (MLTSS). Five MCOs administer NF benefits: Aetna Better Health, Horizon NJ Health, UnitedHealthcare Community Plan, Wellpoint (formerly Amerigroup), and Fidelis Care. MCOs must pay at minimum the DMAHS FFS Medicaid rate — floor, not ceiling.

Operator implication: Operators manage MCO contracts in addition to DMAHS rate compliance. Above-floor MCO-negotiated rates differentiate revenue across the operator base.

NF Quality Care Assessment (NFQCA) — Provider Tax (Frozen Under H.R.1)

New Jersey levies a per-non-Medicare-resident-day Quality Care Assessment on NF days. Generates federal matching revenue passed back through rate add-ons. Provider tax rates are frozen under H.R.1 / P.L. 119-21 — cannot be increased, but the existing assessment is grandfathered.

Operator implication: Stable supplemental revenue source. Rate freeze prevents upward adjustment but also protects against federal phase-down pressure.

Certificate of Need — Active (N.J.S.A. 26:2H)

New Jersey maintains an active CON program for nursing facilities. New construction, bed additions, and major capital projects require Department of Health approval. Bed inventory is largely flat with limited new authorization.

Operator implication: Supply-constrained market. Acquisitions are the primary market entry path. CON protection supports existing facility valuations.

Medicaid Expansion State — Standard FMAP with Enhanced Match for Expansion Population

New Jersey expanded Medicaid in 2014. Standard FMAP applies to traditional NF population; enhanced match (currently 90%) applies to the expansion population. NJ is one of the largest Medicaid programs in the Northeast.

Operator implication: NJ has higher exposure than non-expansion states to enhanced-FMAP changes under federal reconciliation activity.

H.R.1 / P.L. 119-21 — Federal Medicaid Funding Pressure

Federal reconciliation creates ongoing pressure on FMAP, provider tax structures, and expansion population funding. New Jersey, as a high-cost expansion state with a sizable Medicaid program, has elevated exposure relative to smaller or non-expansion peers.

Operator implication: Long-term funding pressure on the NJ Medicaid base. Monitor federal appropriations activity.

Federal Staffing Mandate — Suspended Through 9/30/2034; State Rules Remain

The CMS federal staffing mandate is suspended through September 30, 2034 (P.L. 119-21). New Jersey state staffing rules (N.J.A.C. 8:39) remain in full effect, including minimum CNA-to-resident ratios and 24/7 RN coverage requirements.

Operator implication: Federal compliance ratchet deferred but state ratios remain binding. State requirements are not subject to federal repeal.

Annual Appropriations — Rate Trajectory Tied to Budget Cycle

NJ NF rate adjustments are determined each year through the state budget appropriations process rather than locked in by multi-year statutory base. Year-over-year rate changes vary with the Governor’s budget and Legislative negotiation.

Operator implication: Rate trajectory uncertainty year-over-year. Monitor each annual budget cycle (FY runs Jul 1 – Jun 30) for direction.

Case-Mix Methodology Evolution — Possible Federal PDPM Alignment

Many states are migrating case-mix methodology toward the federal PDPM model. New Jersey has not announced a comprehensive PDPM transition timeline as of this report, but national alignment trends suggest eventual methodology evolution.

Timing: Monitor DMAHS bulletins for any case-mix methodology changes. Facilities with high-acuity populations would benefit from PDPM alignment.

MLTSS MCO Rate Divergence — Above-Floor Contract Dynamics

Under MLTSS, individual MCO-negotiated rates above the DMAHS FFS floor will increasingly differentiate operator revenue. As MCO contracts mature, the spread between the FFS benchmark and contracted rates becomes a key revenue driver.

Timing: Ongoing as MLTSS contract cycles renew with the five participating MCOs.

Workforce & Wage Cost Pressure — Northeast Premium Market

New Jersey faces high labor and wage costs typical of the New York metro area and broader Northeast. Cost-based rates capture wage inflation with a lag, creating margin compression during periods of rapid cost escalation.

Timing: Ongoing structural pressure. Operators with efficient labor management gain relative margin advantage.