TRENTON - The New Jersey Public Advocate's Office is investigating allegations that a company operating eight assisted-living facilities in South Jersey improperly discharged residents when their savings ran out.

Public Advocate Ronald K. Chen is scheduled to appear in Superior Court here on Thursday to ask a judge to enforce a subpoena issued against Assisted Living Concepts Inc. of Milwaukee.

Laurie Facciarossa Brewer, a spokeswoman for the Public Advocate's Office, said the agency, which has subpoena power, learned of the allegations late last year.

At that time, the adult children of residents at Chapin House in Rio Grande, Cape May County, contacted the department with concerns that their parents were being involuntarily discharged because their private funds had run out, making them eligible for Medicaid. Medicaid pays less than the facility charges residents paying with their own money.

Brewer said the Public Advocate's Office issued a subpoena in January seeking information about residents in all eight of the company's South Jersey facilities. In February, the company rejected the subpoena but also promised not to evict any residents because their private funds had run out, Brewer said.

In April, the public advocate learned that more people were allegedly being evicted because their funds had run out, so the subpoena was renewed, she said.

Laurie Bebo, president and chief executive officer of Assisted Living Concepts, said the company did not feel that the public advocate's request for information had proper legal standing because no investigation was pending. She said the company was also concerned about the privacy rights of the residents.

Bebo added that the company had been working with the state Department of Health and Senior Services to review its policies on Medicaid.

"We've had good discussions as of late and are working through that process," Bebo said.

Brewer said staff members from Assisted Living Concepts initially indicated to residents and potential residents that if their private funds ran out, they would be able to stay at the facilities with Medicaid funding alone. However, staff members later told residents it was company policy not to accept Medicaid payments, Brewer said. Assisted Living Concepts' state license requires it to set aside a certain percentage of its spots for Medicaid recipients, Brewer said. The facilities have not maintained those percentages, she said.

Bebo said the state laws requiring facilities to maintain minimum numbers of residents receiving Medicaid did not apply to Assisted Living Concepts' facilities because they were built before the law took effect.

The Public Advocate's Office has identified several Chapin House residents it says were improperly discharged when they ran out of money. The public advocate is also trying to determine whether residents at other Assisted Living Concepts facilities may have also been improperly evicted. "We suspect and believe that this could be more widespread than Chapin House," Brewer said.

Contact staff writer Adrienne Lu at 609-989-8990 or alu@phillynews.com.