Establishes requirements for sanctions and other actions involving low-performing nursing homes.

This New Jersey bill establishes a three-tier system for responding to nursing homes with consistently low federal Medicare and Medicaid ratings. After two consecutive one-star ratings, the state may restrict new Medicaid admissions or reduce quality incentive payments. For three consecutive one-star ratings, the state can impose stricter penalties like removing Medicaid residents, halting payments, or revoking Medicaid participation, while requiring the nursing home to submit an 18-month improvement plan for state approval. Failure to comply with the improvement plan results in loss of Medicaid reimbursement until residents are relocated.