How New Jersey Medicaid Pays for Adult Medical Day Care: Five Health Plans, a $95.96 Per-Diem Floor, and the Records Auditors Check

New Jersey licenses 167 adult day health services facilities with 20,980 slots — 31 of them in Middlesex County — and between 20,700 and 23,400 Medicaid recipients use them in a typical year. The money behind those visits comes almost entirely from five health plans: of $1.82 billion the state paid for adult day health services from 2019 through September 2024, 99.9 percent went through managed care. Two things every New Jersey center should have in view this fall: the per-diem floor the Legislature wrote into the budget on June 30, and the three billing patterns the State Comptroller has told the plans to hunt for.

ElderSuite serves adult day care centers nationwide. This piece is New Jersey-specific — the Medicaid adult medical day care benefit for seniors and adults with disabilities, not DDD day habilitation.

One benefit, two names, five plans

The Department of Health licenses "adult day health services facilities" under N.J.A.C. 8:43F; the Medicaid rule, N.J.A.C. 10:164, uses the same term; and the budget, the rate notices, and the health-plan contract call it "adult medical day care." They are one benefit. The NJ FamilyCare managed care contract defines it as "Medical Day Care (Adult Day Health Services)": preventive, diagnostic, therapeutic, and rehabilitative services under medical and nursing supervision, in an ambulatory setting, for adults with physical or cognitive impairments who live in the community.

It is a State Plan benefit, not a waiver-only service, and it has been delivered through managed care since July 1, 2011 — a carve-in the Legislature re-enacts every year in the Appropriations Act. The plans are the five NJ FamilyCare health plans listed by the Division of Medical Assistance and Health Services: Aetna Better Health of New Jersey, Fidelis Care, Horizon NJ Health, UnitedHealthcare Community Plan, and Wellpoint. All five serve every county except Fidelis Care, which does not serve Hunterdon. Together they carried 73,674 members eligible for Managed Long Term Services and Supports in December 2025, up 7 percent in a year.

Fee-for-service has not disappeared, but it is a bridge, not a track. The state authorizes fee-for-service adult day health for up to 90 days while a beneficiary waits for plan enrollment or during a gap in managed care coverage; over the same 2019–2024 window, fee-for-service paid 0.1 percent of the total.

Who qualifies, and who decides

A participant needs NJ FamilyCare Plan A and clinical eligibility under 10:164-1.5: at least limited assistance in two activities of daily living that the center will provide entirely on site, or at least one skilled service delivered daily on site, or rehabilitation toward a time-limited goal ordered by a physician, physician assistant, or advanced practice nurse, or supervision and cueing in three ADLs with documented short-term memory and decision-making deficits. That is a lower bar than the three-ADL nursing-facility level of care MLTSS requires, which is why adult medical day care is available to Plan A members who are not in MLTSS at all. For members who are, the plan's care manager can authorize medical day services above the State Plan limit as part of the MLTSS plan of care.

The budget language adds three limits that have been repeated every year since 2010: no payment for anyone whose authorization rests solely on the need for medication administration; physical, occupational, and speech therapy do not by themselves establish eligibility; and no payment without prior authorization.

The plan decides. Under the contract, a plan care manager completes the NJ Choice assessment — the interRAI Home Care instrument with New Jersey revisions — in person, and if the member qualifies, the plan sends the center an authorization. The state's Office of Community Choice Options audits a 5 percent sample of those medical day care assessments every month. Redetermination is at least annual, and a member who does not attend for 30 consecutive days loses coverage and needs a new assessment and a new authorization to come back.

The per-diem floor: $94.66 to $95.96

New Jersey does something few states do: it writes the adult medical day care rate into the budget. The FY2027 Appropriations Act, approved June 30, 2026, provides that "the minimum fee-for-service and managed care per diem reimbursement rates for adult medical day care providers shall be $95.96." The FY2026 Act carried the same clause at $94.66. On July 15, 2026, DMAHS gave public notice of its intent to amend the State Plan to the new figure, with the fee schedule to follow.

The number binds the plans, not just the state. The contract's directed-payment clause requires every plan to pay adult medical day care centers at least the state fee-schedule rate — the January 2026 contract text still prints $94.66 effective July 1, 2025, and the Appropriations Act now sets the floor for the year that began July 1, 2026. A plan that wants to change how it pays medical day care providers must also give DMAHS 30 days' written notice first.

What one per diem covers

The unit is one visit per day, and the rules around it are exact. Under 10:164-1.4, a day of service means at least five hours, not counting transportation between the center and the participant's home. Under 10:164-1.6, a beneficiary is covered for no more than five days of treatment per week, combined across every center that serves them, and the per diem covers every service licensure requires — including transportation, which the center must provide and may not bill separately. The licensing rule at 8:43F-17.1 caps a participant's total daily transportation between home and the center at two hours.

Fee-for-service claims use local code W9002 for the visit; plan encounters carry S5102.

Licensing, without a Certificate of Need

The Department of Health license under 8:43F is annual. The fee for an initial license or a renewal is $1,500 plus $10 per slot, with a $450 inspection fee every other year, and owners and the administrator need clearance from the Department's Criminal Background Investigation Unit. Adult day health care facilities are exempt from Certificate of Need review under 8:33-6.1; the "CN-6" project application is a licensure form, not a CN application.

The operating standards that matter most to staffing: a registered nurse designated as director of nursing on duty whenever participants are present; at least one full-time-equivalent direct care staff member for every nine participant equivalents, with time spent driving participants never counted as direct care; a medical consultant who sets medical policy with the administrator; and no participant on site more than 12 hours in a calendar day. The chapter was readopted November 18, 2021 and runs to November 18, 2028; the Medicaid rule was readopted September 22, 2021 and runs to September 22, 2028.

Billing: the claim goes to the plan

For all but the bridge cases, there is no fiscal-agent claim. The claim goes to the member's plan, and the contract sets terms every plan must write into its provider agreements: claims within 180 calendar days of the date of service, corrected claims within 365 days, and — for medical day care claims on MLTSS members — 90 percent of clean electronic claims processed within 15 calendar days and 90 percent of clean paper claims within 30. The plan's authorization number is what makes the claim payable.

Electronic claims go out as 837P files, and three of the five plans — Horizon NJ Health (payer ID 22326), Aetna Better Health of New Jersey (46320), and Fidelis Care (14163) — are available payers on the Availity clearinghouse, the same clearinghouse ElderSuite submits claims through. That means a New Jersey center can run the whole pipeline in one system: daily attendance becomes service documentation, documentation becomes claims, and claims go out electronically. Availity requires a one-time payer enrollment before the first claim goes out. For the full workflow from attendance record to electronic claim, see ElderSuite's Medicaid billing guide.

For the bridge cases, fee-for-service claims require the pre-numbered prior authorization form FD-411 and must reach the state within one year of the date of service. Since June 1, 2026, fee-for-service claims also pend, and then deny, if the billing provider's license on file has expired.

One thing you do not need: electronic visit verification. New Jersey's EVV program covers personal care assistance, home-based supportive care, in-home respite, home health, and certain DDD services. Center-based adult day health is not on the list.

The records the Comptroller told the plans to check

The Medicaid rule is specific about attendance. 10:164-1.3 requires a daily attendance record with each beneficiary's printed name and arrival and departure times, signed by the beneficiary to acknowledge being present for the time shown — or, if the beneficiary cannot sign, a written attestation of the times by the administrator or a designee — plus a completed monthly attendance roster, form CSS-11, whenever the state asks for it. The licensing rule at 8:43F-15.3 adds clinical notes entered on the day the service is rendered, signed physician orders, a medication administration record, and an attendance record of every day the participant was in the facility; the interdisciplinary plan of care is due within 30 days of the first day of attendance and must list the participant's scheduled days, with reassessment at least quarterly; and records are kept ten years after the last discharge. Your attendance tracking is the first document in that file.

The reason it matters: in October 2023 the Office of the State Comptroller reported that 21 adult medical day care providers had improperly billed about $946,000 over six years, and the three patterns it found have become the stated red flags for every plan's special investigations unit. The largest — $613,286 across 7,849 claims — was billing a sixth day in a Sunday-through-Saturday week. The second was billing days when the participant was an inpatient in a hospital or nursing facility. The third was two centers billing the same participant on the same day. In December 2024, the Comptroller, DMAHS, DOH, and the plans ran a joint provider training on exactly those rules. A center whose attendance record shows signed times, whose schedule never books a sixth day, and whose census is reconciled against admissions has already answered the audit.

Where to check

• The NJ FamilyCare managed care contract (benefit package, directed payments, claims terms) and the health plans page
• N.J.A.C. 10:164, the Medicaid adult day health services rule, and N.J.A.C. 8:43F, the licensure standards
• DMAHS public notices for rate amendments, and the FY2027 Appropriations Act
• The Comptroller's 2023 report and December 2024 provider training
• DOH's licensed long-term care facility list for the current count of licensed centers