The New Jersey Office of the State Comptroller (OSC) has engaged in a thoughtful, deliberative process to evaluate nursing home care in the state and to remove from nursing home ownership the owners that provide the poorest quality care to residents. In a 2022 report, An Examination of the Lowest-Rated Long Term Care Facilities Participating in New Jersey’s Medicaid Program (Feb. 2, 2022), OSC evaluated the 15 lowest-rated nursing homes in New Jersey. It found that the facilities had provided the lowest quality of care for multiple years while receiving an average of $103 million from the Medicaid program. OSC recommended, in a phased enforcement approach, that these extremely poor quality facilities improve or be barred from receiving Medicaid reimbursement. OSC has been implementing these recommendations ever since. Other states should adopt OSC’s approach and commitment to improving care for nursing home residents.
The most recent actions involve two nursing homes under common ownership (Hammonton Center for Rehabilitation and Healthcare and Deptford Center for Rehabilitation and Healthcare). On December 10, 2025, OSC issued a scathing report about the two facilities, Investigation Uncovers Massive Medicaid Scam at Two NJ Nursing Homes, documenting how they and their owners diverted public reimbursement to private profit and provided grossly inadequate care to the facilities’ residents.
On January 19, 2026, OSC filed a lawsuit against Daryl Hagler, Kenneth Rozenberg, and 31 additional “family members, associates, and related entities,” alleging “a multi-year scheme to exploit two Medicaid-funded nursing homes for unlawful profit, while residents suffered sub-standard quality care.” OSC, “OSC Sues Hammonton and Deptford Nursing Home Owners and Associates for Medicaid Fraud; Bridgeton Nursing Home Suspension Set for March 13, 2026” (posted Jan. 19, 2026). OSC “seeks restitution and disgorgement of Medicaid overpayments, civil penalties for false statements/false claims and staffing violations, and damages.”
The Complaint in State of New Jersey, Office of the State Comptroller v. Innova Atlantic WH Operations, LLC d/b/a Hammonton Center for Rehabilitation and Healthcare, et al, Docket No: ) (NJ Superior Court, Mercer County, Jan. 19, 2026) describes “a multi-year investigation into the finances, operations, and compliance with contractual and quality standards at the nursing homes conducted by the Office of the State Comptroller, Medicaid Fraud Division,” which found “pervasive, systemic, and longstanding violations of law, contract and/or profiteering by the Defendants.” Complaint ¶2. OSC alleges that the Special Focus Facilities were chronically understaffed, averaging less than half of the nursing staff required by state law during the investigation period, ¶¶104-118; that surveys and other investigations documented systemic failures in care, ¶¶119-121; and that the owners diverted Medicaid funds to themselves through use of related party transactions, ¶¶124-129.
The Complaint includes three counts: (1) Breach of the Medicaid Provider Participation Contract; (2) violation of the Medical Assistance and Health Services Act and the Medicaid Program Integrity and Protection Act (N.J.S.A. 30:4D-1 et seq.; N.J.S.A. 30:4D-53 to -64); and (3) Unjust Enrichment.
On January 19, 2026, OSC also announced the suspension of South Jersey Extended Care (SJEC) and its owners from the Medicaid program. On December 12, 2024, OSC had issued a report about the facility, entitled An Investigation of Fraud, Waste, and Abuse in New Jersey’s Lowest Rating Nursing Home, which found that “SJEC’s owners and operators improperly funneled millions of Medicaid dollars into their own businesses and charities, leaving residents in a dismal, understaffed, and under-resourced facility.”
The Center has written many times about the New Jersey State Comptroller’s actions to protect nursing home residents:
- “New Jersey Denies Medicaid Participation for Bad Nursing Home Owners” (CMA Alert, Jun. 18, 2025).
- “New Jersey State Comptroller Protects Nursing Home Residents Again” (CMA Alert, Feb. 20, 2025).
- “Effective Enforcement: Two New Jersey Nursing Home Operators Suspended” (CMA Alert, Dec. 19, 2024).
- “A Model for Nursing Home Enforcement” (CMA Alert, Mar. 21, 2024).
- “Second State Report Recommends Barring Medicaid Payments to Chronically Poor-Performing Nursing Facilities” (CMA Alert, Feb. 10, 2022).
February 5, 2026 – T. Edelman