Transparency and Definitions
In a proposed rule, the Centers for Medicare & Medicaid Services will use a tool included in the Affordable Care Act to require more information on nursing home owners, managers and real estate and other partners. The rule cites a 2021 analysis from the Journal of the American Medical Association that found private equity companies seek annual returns of 20% or more. This creates unsafe financial pressures to generate profits by reducing “staffing, services, supplies, or equipment, which could adversely affect quality of care.”
A “private equity company” is a publicly traded or non-publicly traded company that collects capital investments from individuals or entities to purchase an ownership share of a SNF.
The agency would define a “REIT” as a publicly-traded or non-publicly traded company that owns part of the buildings or real estate where the provider operates.
A “disclosable party” is a person or entity that exercises operational, financial or managerial control over a facility. This may including providing policies or procedures; or financial or cash management services; or leases or subleases real property to the facility.
GAO has sought increased transparency for years. CMS will collect information in a nursing home enrollment application starting this summer.
The information about related entities that lease or sublease property to nursing homes are necessary because corporate chains set up as different corporate entities under the same umbrella.