White House furthering nursing home ownership transparency efforts
HHS has issued a proposed rule to require nursing homes to disclose additional ownership and management information to CMS.
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Following up on one of the subjects broached during his State of the Union address, President Joe Biden is directing the Department of Health and Human Services to increase the transparency of nursing home ownership and management as part of a larger bid to improve safety and quality in the nation's nursing homes.
HHS has issued a proposed rule to require nursing homes to disclose additional ownership and management information to the Centers for Medicare and Medicaid Services, as well as states. The rule also includes private equity and real estate investment trust definitions, potentially setting the stage for the disclosure of whether nursing home owners are private equity investors or real estate investment trusts.
The move is part of the administration's broader initiative to improve the quality and care available at nursing homes. By making facility ownership and oversight more transparent, the hope is that nursing home residents and their families will be able to make more informed care decisions, HHS said.
WHAT'S THE IMPACT?
The proposed rule would implement portions of Section 6101(a) of the Affordable Care Act. This would require nursing homes enrolled in Medicare or Medicaid – the majority of the country's nursing homes – to disclose additional information regarding owners, operators and management. For example, nursing homes would disclose individuals or entities that provide administrative services or clinical consulting services to the nursing homes.
Nursing homes frequently use other companies to provide major services or support, but families currently have no way of knowing which different companies or firms provide care to their loved ones and how they might be connected to the owners of a nursing home, said HHS.
The proposed rule would also require additional information about entities that lease or sublease property to nursing homes, since the facilities and property owners may be set up as different corporate entities, even though the entities work hand-in-hand.
In addition to the Section 6101(a) disclosures, the proposed rule would provide definitions of "private equity company" and "real estate investment trust" to assist nursing homes when reporting the data. The expectation is that the definitions will lead to the disclosure of whether direct and indirect nursing home owners are private equity companies or real estate investment trusts via an updated nursing home enrollment application expected to be ready for public use in the summer of 2023.
Concerns about the quality of care and operations of nursing facilities owned by private equity companies and other types of investment firms have increased since 2011, said HHS, which pointed to research finding that some outcomes are significantly worse at these facilities.
One recent study, for example, found that residents in nursing homes acquired by private equity were 11.1% more likely to have a preventable emergency department visit and 8.7% more likely to experience a preventable hospitalization when compared to residents of for-profit nursing homes not associated with private equity.
Another working paper examining 18,000 nursing home facilities over a 17-year period found that private equity ownership increased excess mortality for residents by 10%, increased prescription of antipsychotic drugs for residents by 50%, decreased hours of frontline nursing staffing by 3%, and increased taxpayer spending per resident by 11%. The study implies an additional 20,150 lives lost as a result of private equity ownership.
Another study found that private equity-backed nursing homes had a COVID-19 infection rate and death rate that were 30% and 40% above statewide averages, respectively.
Research also suggests that private equity ownership of nursing homes may lead to an uptick in Medicare costs, as well.
The additional data required to be reported under the rule would be publicly reported.
THE LARGER TREND
The proposed rule builds on recent data releases and transparency efforts. In April 2022, CMS released data publicly for the first time on mergers, acquisitions, consolidations and changes of ownership from 2016 to 2022 for hospitals and nursing homes enrolled in Medicare.
In September, CMS released additional data publicly on the ownership of roughly 15,000 nursing homes certified as a Medicare Skilled Nursing Facility, regardless of any change in ownership, including providing more information about organizational owners of nursing homes. And in December 2022, CMS released ownership data publicly for all Medicare-certified hospitals.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
