Biden Administration Pushes for Skilled Nursing Facility Ownership Transparency
By Jonathan Springston, Editor, Relias Media
The Centers for Medicare & Medicaid Services (CMS) this week proposed updating federal code to require disclosure of certain ownership, managerial, and other information regarding Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities. This is the Biden administration’s latest move as part of a broader mission to improve U.S. nursing homes.
Inside the Affordable Care Act, there is a provision that added section 1124(c) to the Social Security Act. This requires the disclosure of information about nursing home ownership and oversight. However, some information is not currently required to be disclosed.
CMS is proposing to ramp up enforcement by requiring Medicare SNFs and Medicaid nursing facilities to disclose data outlined in section 1124(c) at initial enrollment and during revalidation. Further, CMS seeks to define private equity companies and real estate investment trusts (REITs), which would lead to Medicare SNFs disclosing whether each direct and indirect owning or managing entity is a private equity company or REIT.
The Department of Health and Human Services (HHS) referenced a study that indicated residents living in nursing homes acquired by private equity were 11% more likely to record a preventable emergency department visit and 8.7% more likely to experience a preventable hospitalization vs. residents living in for-profit facilities not associated with private equity.
HHS also cited data from a 2021 working paper from the National Bureau of Economic Research (NBER). The authors of that paper studied data on 18,000 nursing home facilities collected over 17 years. The researchers reported private equity ownership increased excess mortality rates by 10%, increased prescription of antipsychotic drugs by 50%, decreased hours of frontline nursing staffing by 3%, and increased taxpayer spending per resident by 11%.
At the time NBER released its paper, the American Investment Council (a private equity advocacy organization) was critical, arguing the authors “only focused on a very narrow subset of nursing home patients” and said the paper was “inconsistent with recent peer-reviewed academic research that shows that private equity-backed companies are delivering high-quality care to nursing home residents.”
Meanwhile, the top official at the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) described this week’s CMS proposal as a “red herring.”
“Less than 5% of nursing homes are owned by private equity firms and roughly 12% are owned by a REIT, an entity that typically has no influence on daily operations. This has become a distraction from the real issues that impact the majority of providers, like Medicaid underfunding and workforce shortages,” said AHCA/NCAL President and CEO Mark Parkinson. “If we truly want to improve America’s nursing homes, we need policymakers to prioritize investing in our caregivers and this chronically underfunded healthcare sector.”
The CMS proposal is open for public comment until April 14, 2023. For more on this and related subjects, be sure to read the latest issues of Healthcare Risk Management and Hospital Case Management.