The Centers for Medicare and Medicaid Services (CMS) on Feb. 15, 2023, published a proposed 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 Centers for Medicare and Medicaid Services (CMS) on Feb. 15, 2023, published a proposed 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.   

CMS framed the proposal as an important step in continuing to implement President Biden’s initiative to improve the quality and care available at nursing homes. “By making facility ownership and oversight more transparent, nursing home residents and their families will be more empowered to make informed decisions about care,” the agency noted in a press statement.

LeadingAge supports transparency and accountability in all nursing homes as our not for profit members are required annually to disclose board governance and ownership structure on the 990 Form.  Please read Katie Smith Sloan’s statement and our press release on the proposed rule.  We ask members to forward feedback on the proposed rule, as LeadingAge develops clarity on the impact of these proposals and identifies comments and questions to submit to CMS.

Background

The federal Affordable Care Act, enacted in March 2010, added a new Section 1124(c) to the Social Security Act requiring Medicare- and Medicaid-nursing homes to disclose certain information relating to ownership and leadership of their organizations.  CMS initially proposed regulations to implement these provisions several years ago but decided against finalizing them at that time.  The agency is revisiting the issue now against the backdrop of the White House’s steady focus on nursing home reform, including transparency and accountability.

In the proposed rule, CMS specifically details concerns about the quality of care and operations of nursing facilities owned by private equity and other types of investment firms but adds that studies have also identified certain quality concerns in facilities across the board, regardless of the precise type of ownership involved. “We believe nursing home owners and operators are in a position to address … problems … and make operational improvements,” CMS notes.  “Knowing who these parties are through their disclosures on the Form CMS-855A and to States would: (1) provide additional transparency that may assist CMS and other regulators in holding nursing facilities accountable; and (2) allow consumers to select facilities with better knowledge of their owners and operators.”

What information would have to be disclosed under the proposed rule? 

Consistent with Section 1124(c) the proposed regulations would require Medicare-certified skilled nursing facilities (SNFs) to disclose the following:

(1) Each member of the governing body of the facility, including the name, title, and period of service for each such member;

(2) Each person or entity who is an officer, director, member, partner, trustee, or managing employee of the facility, including the name, title, and period of service of each such person or entity;

3) Each person or entity who is an additional disclosable party of the facility; and

4) The organizational structure of each additional disclosable party of the facility and a description of the relationship of each such additional disclosable party to the facility and to one another.

CMS already collects some of this information as part of the Medicare enrollment process, such as the SNF’s owners (including organizational structures), managing employees, corporate officers, corporate directors, and other parties.

However, there would be new, supplemental disclosures under the proposed rule.  One example is found in the term “additional disclosable party,” which would include any person or entity that provides management or administrative services, management or clinical consulting services, or accounting or financial services to the facility.

Also new: CMS intends to add data elements to the CMS-855A form through which owning and managing entities of SNFs would have to disclose whether they are either a private equity company (proposed to be defined as a publicly-traded or non-publicly traded company that collects capital investments from individuals or entities and purchases an ownership share of a provider) or a Real Estate Investment Trust (REIT) (proposed to mean a publicly-traded or non-publicly traded company that owns part or all of the buildings or real estate in or on which a provider operates).

For nursing facilities enrolling in Medicaid (NFs), the proposed regulations closely mirror those for SNFs.  One exception is that CMS is not proposing to require states to collect data signifying whether a particular organization is a private equity company or REIT, though it encourages states to do so. 

Because states have discretion in the operational aspects of their Medicaid programs, the impact this proposed rule would have on Medicaid provider enrollment will vary from state to state. Some states may already collect all of the information CMS outlines, while others may collect the majority but not all of the information, and still others may collect only a portion of it.

When and how would nursing homes disclose the information?

SNFs would be required to make these disclosures using the form CMS-855A upon initial enrollment – which would include a change of ownership – and revalidation, which typically occurs every five years, though CMS has the authority to initiate the process within a shorter timeframe.  The rule would also require a SNF to report any change to its reported information within 30 days for changes of ownership and 90 days for all other changes.

NFs would be required to make the disclosures only upon initial enrollment and revalidation, using whatever provider enrollment system the applicable State Medicaid agency has established.  In deference to states’ operation of their provider enrollment programs, CMS is encouraging states to establish reporting requirements regarding changes in the data a Medicaid NF submits, including changes of ownership, but it is not proposing to require states to do so.

Will this information be publicly available? 

Yes.  If the rule is finalized, CMS intends to make the data that is reported publicly available within one year, as required by the Affordable Care Act.  The agency would provide more information after the final rule is published regarding what specific information will be released, the timing, and the specific vehicle for posting or delivering the information.

When would these requirements take effect?

CMS will accept public comments on its proposal through April 14, 2023 and then proceed to evaluate the feedback received.  If finalized, the rule would become effective 60 days after the date of publication in the Federal Register.  

However, Medicare SNFs would not have to disclose the data required under section 1124(c) until the Form CMS-855A was revised to collect this data and became publicly available for use.  For Medicaid nursing facilities, the required data would not have to be reported until the applicable State Medicaid agency had established the means to collect it.

LeadingAge will continue to analyze the proposed rule, and our team will seek feedback from members to inform our comments to CMS on these important issues.