Bridgeton, NJ — New Jerseys state watchdog has denied Medicaid participation to the would-be buyers of South Jersey Extended Care, citing a high risk of fraud and abuse and throwing the troubled Bridgeton nursing homes future into doubt.
In a report released Nov. 20, the Office of the State Comptroller said the proposed new ownership group failed to disclose key ties to previously sanctioned operators and could not explain suspicious payments. Without Medicaid which covers roughly 70% of the facility’s residents the 200-bed home faces potential closure or a forced sale.
Why the sale was denied
The comptrollers office said its review uncovered hidden ownership links, opaque corporate structures, and about $500,000 in consulting fees flagged as possible kickbacks. Investigators also found shared personnel with an operator previously barred from Medicaid, according to the report.
This group presented an unacceptably high risk of fraud, waste, and abuse, State Comptroller Kevin Moriarty said in a statement. Hidden ownership and suspicious payments are not just red flagsthey’re sirens warning of a repeat of profiteering that has harmed vulnerable New Jerseyans.
The proposed buyers had sought to take over a facility already under intense scrutiny. South Jersey Extended Care was suspended from Medicaid in December 2024 after an earlier comptroller investigation found $4.5 million in improper billing tied to substandard care. A court-appointed receiver has operated the home since mid-2025 while a sale was pursued.
A long-troubled facility
South Jersey Extended Care has for years ranked among the states lowest-performing nursing homes under federal metrics. The facility currently holds a one-star rating in the Centers for Medicare & Medicaid Services Five-Star Quality Rating System and has racked up repeated health and safety citations for issues including infection control and staffing shortages.
Families say the problems are not just on paper. The chair of the facilitys family council, Theresa Ruiz, said her relatives and others endured preventable infections and delays in basic care. These new owners? Theyre vultures circling a dying bird, Ruiz said. If they take over without checks, itll be the same storyprofits over people.
What happens next for residents and staff
The denial blocks a critical funding stream estimated at $10 million to $15 million annually. The receiver has warned that, without Medicaid reinstatement, layoffs could begin and residents may need to be relocated as soon as January. The New Jersey Department of Health said it is coordinating with the facility to ensure safe transfers if needed.
Our focus is resident safety, Health Commissioner Dr. Kaitlyn Luby said. Were prepared to assist with safe transfers if funding lapses.
The buyer group disputes the findings and plans to appeal. We are disappointed by the comptrollers decision and believe it mischaracterizes legitimate business arrangements, said Anthony Russo, who leads the investor consortium, through his attorney. We remain committed to improving SJEC and will seek review through administrative channels.
No criminal charges have been filed. The comptrollers office said it has referred its findings to the state Attorney General and federal authorities for further review.
Policy push and broader fallout
Advocates hailed the decision as a win for transparency but warned it underscores longstanding gaps in oversight. AARP New Jersey said lawmakers should move forward on measures that require clear, public ownership disclosures for nursing homes.
The case may also set a precedent for more aggressive pre-approval vetting of nursing home sales in New Jersey. State officials recovered $132 million in improper Medicaid payments in fiscal 2025, according to public data, and the comptroller has stepped up audits of long-term care operators since the pandemic.
Industry groups caution that blanket denials could destabilize care in rural areas like Cumberland County, where options are limited. If South Jersey Extended Care closes or loses significant capacity, nearby hospitals and neighboring facilities could see an influx of residents needing placements on short notice.
For now, the facilitys fate rests with regulators, the receiver, and the pending appeal. A hearing on the denial is expected in December. If no viable buyer clears state scrutiny, officials say they will work to transition residents safely to other settings.
