N.J. Stat. Ann. § 26:2H-12.17

2. The Commissioner of Health may waive the 10% utilization requirement or reduce the required percentage by regulation for specific regions of the State or Statewide if the commissioner determines that sufficient numbers of assisted living beds are available in the State to meet the needs of Medicaid-eligible persons within the limits of the federal waiver to provide assisted living services through the Medicaid program.