Key Takeaways
- For the September 2026 renewal, New Jersey health care service firms (HCSFs) must file only the annual financial statement, not an audit or separate report.
- Future rules raise the Medicaid Personal Care Assistance audit threshold from $250,000 to more than $500,000 and retain annual audits for firms with $10 million or more in gross income.
- HCSFs should track receipts, gross income and triennial cycles, retain supporting records and monitor New Jersey regulations for future audit and reporting duties.
New Jersey bill S-3463/A-4790 materially revises the financial reporting requirements applicable to health care service firms (HCSFs). The law, signed last month by Gov. Mikie Sherrill, took effect immediately, establishing September 30 as the deadline for required audits and directing the Division of Consumer Affairs to adopt implementing regulations. The Division has since announced that, pending updated regulations, it is suspending the audit and separate report requirements under N.J.A.C. 13:45B-13.5A(b)-(e).
The statutory changes remain important for future filing periods. For the September 2026 registration renewal, however, HCSFs are not required to submit a financial audit or separate report and must submit only the annual financial statement required by N.J.A.C. 13:45B-13.5A(a).
What Changed
Under the amended statute, an HCSF receiving more than $500,000 for New Jersey Medicaid Personal Care Assistance services would be subject to the triennial audit requirement once the Division implements the revised requirements. The prior threshold was more than $250,000. The statute retains the third-calendar-year cycle and establishes September 30 as the filing deadline in a year when an audit is required.
Once implemented, this may eliminate the triennial audit requirement for firms with applicable receipts of more than $250,000 but less than $500,000, provided another audit trigger does not apply. The amended statute retains an annual audit requirement for an HCSF generating $10 million or more in gross income, although the Division has suspended audit submissions pending updated regulations.
The law also permits any future required audit to be performed by a CPA licensed in New Jersey or another U.S. jurisdiction, expanding the pool of qualified practitioners available to affected firms.
What Did Not Change
Every HCSF must continue to submit annual financial statements prepared by it and consistent with its New Jersey tax filing for the year covered. This obligation applies even when no audit is required.
When an audit is required after the Division adopts updated regulations, it is expected to continue covering the firm’s financial records and statements, general management and internal control systems and to include financial and compliance components, an unmodified opinion and any management letters prepared in connection with the engagement.
For the September 2026 renewal, firms should focus on preparing the annual financial statement required by N.J.A.C. 13:45B-13.5A(a) and continue monitoring the Division’s implementing guidance.
The Revised Report Requirement
Under the amended statute, HCSFs receiving less than $500,000 for New Jersey Medicaid Personal Care Assistance services and generating less than $10 million in gross income would fall within the separate report category once the Division implements the revised requirements. The Division is not requiring this report with the September 2026 renewal.
The former law generally limited this category to firms with at least $1 million but less than $10 million in gross income. Removal of the $1 million floor means some smaller firms that previously fell outside the report requirement may now have a filing obligation. The law, therefore, reduces the audit burden for certain providers while potentially extending reporting requirements for others. These provisions describe the statutory framework, but the report requirement is temporarily suspended pending updated regulations.
When implemented, the report would no longer need to be prepared by an independent third-party practitioner. It would include information regarding the firm’s insurance coverage; litigation and regulatory actions, including their disposition, during the preceding three years; independent contractors used during the reporting year; and transactions and liabilities exceeding 50% of total billings or total liabilities, as applicable.
These future disclosures focus on financial and operational risk, including insurance coverage or exposure, litigation exposure, contractor dependence and significant concentrations. Management should be prepared to ensure the report agrees with the accounting records, legal information and annual financial statements once the requirement is implemented.
Corrective Action and Financial Viability
Once the revised report requirement is implemented, the filing will not be merely administrative. If the Division questions a HCSF’s financial viability, it may request additional information, make an adverse finding and order corrective action.
The statute also provides for further review following an adverse finding and an audit for the next calendar year regardless of gross income. Providers should therefore retain support for future report disclosures and monitor the forthcoming regulations.
Preparing for the September 2026 Registration Renewal
For the upcoming September 2026 registration renewal, the Division has stated that HCSFs are not required to submit a financial audit or separate report. Each HCSF must still submit the annual financial statement required by N.J.A.C. 13:45B-13.5A(a).
Firms should prepare a financial statement consistent with their New Jersey tax filing for the year covered, retain supporting records and monitor the Division’s rulemaking for future audit and report requirements.
Why This Matters for Providers
Providers should continue to calculate gross income and receipts specifically attributable to New Jersey Medicaid Personal Care Assistance services, confirm their registration date and triennial audit cycle and retain support for the filing category that may apply after updated regulations are issued.
Implementing guidance will remain important because the law directs the Division to adopt rules to effectuate the revised requirements. The statute requires an audit of when applicable receipts exceed $500,000 and a report when they are below $500,000, but it does not expressly address exactly $500,000. A firm at that threshold should obtain clarification before filing. In the meantime, no audit or separate report is required with the September 2026 renewal; only the annual financial statement remains due.
Bottom Line
S-3463/A-4790 provides meaningful future audit relief by increasing the Medicaid Personal Care Assistance threshold and establishing a September 30 statutory deadline. The Division, however, has suspended the audit and separate report requirements pending updated regulations.
For the September 2026 registration renewal, all HCSFs must submit the annual financial statement required by N.J.A.C. 13:45B-13.5A(a), but they are not required to submit an audit or separate report. Firms should continue to evaluate the statutory thresholds, maintain supportable financial information and monitor implementing guidance for later periods.
We Can Help
PKF O’Connor Davies works with home care providers and health care service firms to evaluate reporting requirements, prepare annual financial statements and supporting documentation, assess future audit readiness and respond to regulatory developments. As New Jersey updates the regulations, providers should monitor the final requirements and maintain records capable of supporting future filings and regulatory oversight.
Contact Us
For questions about New Jersey’s revised health care service firm requirements or the September 2026 registration renewal, please contact your PKF O’Connor Davies client service team or:
Keith Solomon, CPA
Partner, Health Care Practice Leader
ksolomon@pkfod.com | 914.341.7078
Michael Thilker, CPA, CITP
Partner
mthilker@pkfod.com | 856.441.0217