TRENTON—The owners of the Deptford Center for Rehabilitation and Healthcare, Hammonton Center for Rehabilitation and Healthcare, and related entities will be suspended from New Jersey Medicaid, effective May 24, the Office of the State Comptroller announced. 

Citing poor conditions in the facilities and evidence of massive Medicaid fraud in New York, OSC’s Medicaid Fraud Division sent letters on January 25, notifying Kenneth Rozenberg, Beth Rozenberg, and Daryl Hagler and their entities that they would be suspended from NJ Medicaid in 120 days. 

The suspension is temporary, pending completion of OSC’s investigation and completion of New York State legal proceedings.  Hagler and the Rozenbergs were accused of siphoning $83 million from nursing homes funded by New York Medicare and Medicaid to enrich themselves. In July 2023, a New York State Supreme Court judge found evidence of “repeated and persistent fraud” so credible that she appointed a financial monitor and health monitor to assess and manage operations.  

“When there is evidence of fraud of this magnitude, and when a judge has acted to prevent further siphoning and self-dealing, we have a duty to act.  To protect New Jersey Medicaid and the residents who rely on it, we must stop the flow of Medicaid funds to these individuals, and we must require them to step aside,” said Acting State Comptroller Kevin Walsh. 

OSC’s letters noted that the New Jersey facilities, Hammonton Center and Deptford Center, have been cited repeatedly for serious health and safety violations that negatively impacted residents’ care.  Both Hammonton Center and Deptford Center have received the lowest possible quality rating from the federal Centers for Medicare and Medicaid Services. The Department of Health issued Hammonton numerous penalty notices for significant deficiencies identified during survey inspections.  OSC’s letter also advised that the nursing homes may continue to operate with Medicaid funds if the current owners entirely disassociate from these facilities – meaning they divest ownership or  the facilities are placed under the control of an independent monitor or receiver so that the suspended parties have no role in providing services to residents, no access to or authority over Medicaid funds, and do not financially benefit from Medicaid. 

OSC has kept the Department of Health, the Department of Human Services, and the Long-term Care Ombudsman informed so that they can be prepared to take actions to protect the residents of Deptford Center and Hammonton Center while the suspensions are in effect.

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