Date: February 21, 2024Attorney: Mohamed H. Nabulsi and Peter P. Sepulveda

Nursing Homes Under Fire – How Nursing Homes Can Protect Themselves in an Environment Where State and Federal Agencies Have Them Under a Microscope

As the former Bureau Chief of the New Jersey Office of the Attorney General – Medicaid Fraud Control Unit (“MFCU”), Peter Sepulveda, Esq. received and analyzed all referrals from the New Jersey Medicaid Fraud Division, the Long-Term Care Ombudsman, all Medicaid Managed Care Organizations (“MCOs”), Adult Protective Services, municipal police departments, and county prosecutor’s offices.  Over the course of his nine years as Bureau Chief, the MFCU initiated hundreds of cases involving both physical and financial abuse of the elderly.  Peter has trained both criminal and civil investigators throughout the state in recognizing the signs of elder abuse and in evaluating whether factual scenarios and evidence results in a strong criminal case.  He has a keen sense for identifying criminal activity as well as conduct that rises to the level of a civil violation.  Now as Counsel in the Healthcare Practice Group at Mandelbaum Barrett PC, Peter utilizes the acumen, skills and experience he gained in his former position to help nursing homes and other elder-care providers identify and rectify areas of exposure and non-compliance, reduce the likelihood of scrutiny, and respond to governmental outreach and defend governmental actions, civil or criminal.   

In the wake of the COVID-19 pandemic, the State of New Jersey has dramatically increased the attention paid to investigating nursing homes.  This increased attention has come in the form of new bills, the creation of the New Jersey Task Force on Long-Term Care Quality and Safety, and an overall increased deployment of resources into the investigation of nursing homes. 

In the State of New Jersey, nursing homes are licensed and regulated by the New Jersey Department of Health (“NJDOH”).  To ensure compliance with regulations, NJDOH investigates complaints and penalizes facilities for non-compliance.  Additionally, the NJDOH certifies aides and administrators in nursing homes to ensure their training, experience and background meet state standards.

Investigations of resident complaints are handled by the New Jersey Office of the Long-Term Care Ombudsman (“NJLTCO”).  The NJLTCO is responsible for securing, preserving, and promoting the health, safety, and welfare of New Jersey’s long-term care residents, through investigations of abuse, neglect, and exploitation; legislative and regulatory advocacy; policy work; and education and outreach. 

As the Medicaid program funds the majority of nursing home care in New Jersey, the New Jersey Office of the State Comptroller – Medicaid Fraud Division (“MFD”) also focuses on the investigation of nursing homes.  MFD has the authority to seek monetary judgments against nursing homes for improper billings submitted to the Medicaid program and to bar a nursing home from participating as a provider in the State’s Medicaid program.

Where the NJLTCO or MFD investigations reveal potential criminal conduct, either may refer the matter to the MFCU, the agency that I lead as Bureau Chief for nine years prior to joining Mandelbaum Barrett.   The MFCU investigates complaints of patient or resident abuse or neglect in health care facilities receiving Medicaid funding such as nursing homes.  Abuse and/or neglect means both physical abuse or neglect and financial abuse pertaining to money or property abuse or neglect. 

The MFCU has increasingly prioritized elder exploitation and abuse in recent years.  In 2018, during my term as Bureau Chief, the MFCU launched the Elder Protection Task Force (“EPTF”), which investigates allegations of financial exploitation, abuse and/or neglect of elderly and incapacitated adults.  The EPTF is composed of the leadership of all state agencies and several federal and county agencies whose mission is to protect New Jersey’s elderly population.

In addition to facing licensing consequences from the NJDOH, civil penalties and even debarment from the Medicaid program from the MFD, criminal prosecution from the MFCU, and insurance fraud prosecution, a nursing home represents a potential target for a False Claims Act lawsuit.  Nursing homes are typically larger in size and enterprise value than the majority of providers, thereby representing “deep pockets” for the government to pursue a False Claims Act case.  

When confronted with such an array of agencies seeking to investigate, sanction and even prosecute nursing homes and their owners and representatives, it is important to understand the common factual scenarios that could occur where a nursing home, its owners or representatives could find themselves facing civil or criminal exposure.    

  • In the aftermath of the pandemic, New Jersey state agencies have an increased focus on infectious disease protocols and the maintenance of adequate staffing levels.  Failure to follow these regulations could lead to significant monetary penalties and even the loss of a facility’s nursing home license.
  • New Jersey authorities have increased their focus on any financial exploitation of nursing home residents.  Due to the resident’s status as a vulnerable individual, any financial improprieties will be treated extremely seriously and could result in serious consequences.
  • Facilities can be subject to civil or even criminal penalties for the conduct of all facility employees.  A failure to properly train or supervise employees can often result in liability for the employee’s conduct extending all the way to the owners and operators of the nursing home.

In light of the increased governmental scrutiny of nursing homes, it is critically important to examine the integrity of a nursing home’s operations, business and financial practices as well as its safeguards for its residents.  The best protection against an investigation by these state agencies is to implement prophylactic measures to prevent such investigations or to at least increase the likelihood of surviving such investigations.

When faced with an investigation by any of the above-mentioned agencies, it is important to have counsel who is familiar with both nursing home regulations and with the agencies involved; to have counsel who knows not only the legal authority of each of the agencies involved in a case, but also has experience dealing with each of the agencies involved and understands the ways to successfully defend against each of the types of actions they may institute. 

Allow us to protect your home- the business you have devoted your life to, the home where New Jersey’s residents live out their golden years after providing so much to our state. 

To discuss the operations of your nursing home and how to help prevent or deal with a governmental investigation or action, please contact Mohamed Nabulsi, Healthcare Chair, at or Peter Sepulveda at