CMS Proposes Rule to Increase Nursing Home Transparency, Increase Quality of Care
The Centers for Medicare and Medicaid Services (CMS) has proposed a rule that would require the majority of nursing homes in the United States to publicly report their ownership structure and details of any associated businesses. This move is part of the Biden administration’s efforts to increase transparency in the nursing home industry, and to ensure that quality care is not undermined by owners or operators profiting off of it.[0]
The proposed rule would implement portions of Section 6101(a) of the Affordable Care Act, and would require nursing homes enrolled in Medicare or Medicaid to disclose individuals or entities that provide administrative services or clinical consulting services to the nursing homes. Furthermore, the rule would require nursing homes that receive Medicare and Medicaid reimbursement to share more information about individuals or organizations that provide administrative services or clinical consulting to the nursing homes.
CMS Administrator Chiquita Brooks-LaSure said, “CMS is committed to using every tool at our disposal to improve nursing home care and identify trends that enhance residents’ quality of life. If finalized, this rule would strengthen our ability to examine ownership types, including private equity and real estate investment trusts.”[1]
Mark Parkinson, president of the American Health Care Association, described the rule as “a distraction from the real issues” affecting the quality of care in nursing homes, such as Medicaid payments that he said are too low and staffing challenges. He added, “If we truly want to improve America’s nursing homes, we need policymakers to prioritize investing in our caregivers and this chronically underfunded health care sector. Together, we should focus on meaningful solutions that can strengthen delivering the quality of care and services that our nation’s seniors deserve.”[2]
The rule would also provide a definition of private equity and real estate investment trusts (REITs).[1] A private equity firm is a publicly traded or non-publicly traded entity that raises capital from individuals or entities, and then uses it to acquire a stake in a SNF (specialized non-financial business).[3] A REIT (Real Estate Investment Trust) is either a publicly-traded or non-publicly traded company that holds all or part of the buildings or real estate utilized in its operations.[4]
Researchers have warned that quality declines when private equity firms invest in nursing homes, and one study published in the Journal of the American Medical Association found that residents of nursing homes acquired by private equity firms were 11.
0. “CMS nursing home ownership rule targets private equity” Modern Healthcare, 13 Feb. 2023, https://www.modernhealthcare.com/policy/cms-nursing-home-ownership-rule-private-equity
1. “Biden-Harris Administration Continues Unprecedented Efforts to Increase Transparency of Nursing Home Ownership” EIN News, 13 Feb. 2023, https://www.einnews.com/pr_news/616815980/biden-harris-administration-continues-unprecedented-efforts-to-increase-transparency-of-nursing-home-ownership
2. “More nursing home ownership info intended to aid consumers, regulators” USA TODAY, 13 Feb. 2023, https://www.usatoday.com/story/news/2023/02/13/nursing-home-care-compare-gao-report-ownership-congress-cms/11230607002/
3. “Nursing Home Ownership Must Be Clarified, Says HHS Proposal (1)” Bloomberg Law, 13 Feb. 2023, https://news.bloomberglaw.com/health-law-and-business/nursing-home-ownership-must-be-clarified-under-hhs-proposal
4. “Feds blur nursing home ownership lines with new transparency rule: critics” McKnight's Long-Term Care News, 14 Feb. 2023, https://www.mcknights.com/news/feds-blur-nursing-home-ownership-lines-with-new-transparency-rule-critics/
