CMS Finalizes Nursing Home Ownership Transparency Rule
On Nov. 17th, the Centers for Medicare and Medicaid Services (CMS) published a final rule requiring nursing homes enrolled in Medicare or Medicaid to disclose and submit certain ownership, managerial, and other information to CMS and state Medicaid agencies. The rule, Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities; Medicare Providers' and Suppliers' Disclosure of Private Equity Companies and Real Estate Investment Trusts, implements portions of Section 6101 of the Affordable Care Act, requiring the disclosure of certain ownership, managerial, and other information regarding Medicare and Medicaid nursing facilities. It also defines the terms private equity company and real estate investment trust, about which information must be disclosed on Form CMS-855A, the Medicare enrollment application. The rule is aimed at increasing transparency and addressing concerns that ownership by private equity firms and real estate trusts had a negative impact on nursing home care quality.
Although nursing homes must currently report certain ownership and management data to CMS and the states as part of Medicare and Medicaid enrollment processes, some of the information under Section 1124(c) of the Act has not previously had to be disclosed (e.g., persons who merely furnish cash management services to a skilled nursing facility (SNF) that is enrolling in Medicare). CMS believes that this additional data, as outlined in the final rule, will give the agency and the states a more complete background on the organizations and individuals that own, oversee, and facilitate the operations of nursing homes.
The final rule requires the following:
- Medicare SNFs and Medicaid nursing facilities will need to disclose the data outlined in Section 1124(c) upon initial enrollment and revalidation. Medicare SNFs will also have to: (1) report this information as part of any change of ownership; and (2) report any change to this data within the timeframes specified. These new Section 1124(c) data elements include:
- Trustees.
- Additional Disclosable Parties (some new parties), such as people or entities that:
- Exercise financial control over the SNF
- Lease or sublease real property to the SNF
- Own a whole or part interest equal to or exceeding 5 percent of the total value of such real property
- Provide to the SNF administrative services, clinical consulting services, accounting or financial services, policies or procedures for any of the SNF’s operations, or cash management services
- Organizational structures of additional disclosable parties, such as the additional disclosable party’s board members.
In comments on the proposed rule, LeadingAge National advocated for minimizing the additional reporting burden on non-profit homes by allowing the Internal Revenue Service (IRS) Form 990 to be deemed sufficient for compliance with the requirements for submission of “additional disclosable parties” and sought clearer definitions to limit the risk of overly broad definitions. Although these changes are not reflected in the final rule, LeadingAge National will continue to engage with CMS as it moves toward implementation of the requirements. The rule takes effect Jan. 16, 2024, but nursing homes will not be expected to comply until CMS and states have completed the additional work needed to collect the information required by the rule. CMS indicated that it will be issuing sub-regulatory guidance to explain the new requirements to stakeholders, including examples of the types of data that must be disclosed.
A Fact Sheet on the rule is available here, and the text of the rule is here.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841