New Jersey audit reforms could ease costs for smaller home care agencies

New Jersey has enacted bipartisan legislation to modernize financial reporting and audit requirements for home health and home care businesses. The changes raise the Medicaid threshold that triggers an annual audit, extend filing deadlines and broaden CPA eligibility—steps designed to reduce administrative costs without eliminating state oversight.

Key takeaways

• The Medicaid reimbursement threshold for personal care assistance audits rises from $250,000 to $500,000.

• Annual audit submissions will be due by Sept. 30.

• Qualified out-of-state CPAs may conduct audits.

• Smaller providers receive revised reporting requirements and, in some cases, opportunities to correct financial concerns.

For owners managing payroll, billing, compliance and staffing, these changes could make financial administration more manageable. Accurate books and timely reporting remain essential, however, particularly for agencies that operate near regulatory thresholds.

What the legislation changes

Senate Bill 3463 was approved unanimously by New Jersey’s legislature and signed into law by the governor. The measure updates requirements for health care service firms, including home care agencies that receive Medicaid reimbursement for personal care assistance.

The higher audit threshold is expected to have the greatest effect on small and mid-sized providers. Agencies below the new threshold may avoid the expense of an annual audit, while firms that remain subject to an audit will have additional time to submit required information.

The law also permits qualified certified public accountants licensed outside New Jersey to perform audits. That change may expand provider access to specialized auditors and create more flexibility in selecting a firm.

Reporting and oversight remain in place

The legislation revises financial reporting requirements for firms with less than $10 million in gross income and changes the information required in annual reports. It also allows corrective action in certain cases involving financial viability, giving providers an opportunity to address issues before more serious consequences arise.

The reforms do not remove New Jersey’s registration and accreditation framework. Instead, they adjust administrative requirements while retaining the state’s broader oversight structure. Providers should continue documenting financial activity carefully and monitoring compliance obligations.

What home care leaders should consider

New Jersey agencies should review whether the new threshold changes their audit obligations and confirm the effective dates and filing procedures with their advisers. They should also assess whether their current bookkeeping systems can produce complete, consistent reports by the new deadline.

For home health, hospice, home care and wound care operators in the Chicagoland area—including Naperville, Lisle and Westmont—the New Jersey law is not a change to Illinois requirements. It does, however, highlight a broader operational lesson: specialized accounting processes can reduce compliance risk and improve decision-making.

Soriaga and Associates helps small health care businesses manage bookkeeping, payroll, tax preparation, cost report filing, consulting and fractional CFO needs. With more than 25 years of experience serving the region, the firm focuses on accounting systems that support day-to-day operations as well as regulatory readiness.

Sources

• New state law seeks to reduce regulatory burden of audits for home health agencies, McKnights Home Care.