On February 13, 2023, the Centers for Medicare & Medicaid Services (CMS) placed on display at the Federal Register a proposed rule that would implement portions of section 6101 of the Affordable Care Act, which require the disclosure of certain ownership, managerial, and other information regarding Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities (hereafter occasionally referenced collectively as “nursing homes”). This proposed rule is part of the continued effort of the Biden-Harris Administration through a series of initiatives, announced on February 28, 2022, designed to improve care and accountability at such facilities.[1]
Background
Section 6101(a) of the Affordable Care Act, signed into law on March 23, 2010, added a new section 1124(c) to the Social Security Act (the Act) establishing requirements for the disclosure of information about nursing home ownership and oversight.
Over the years, CMS has become increasingly concerned about the quality of care at nursing homes, especially those owned by private equity companies and other types of investment firms, and academic researchers have indicated that this trend needs closer scrutiny. CMS believes that greater transparency about nursing home owners and operators can help CMS and other regulators hold these parties more accountable for the quality of care they furnish.
Although nursing homes must currently report certain ownership and management data to CMS and the states as part of, respectively, the Medicare and Medicaid enrollment processes, some of the information under section 1124(c) of the Act is not currently required to be disclosed (e.g., persons who merely furnish cash management services to an SNF that is enrolling in Medicare). This additional data would give CMS and the states a more complete background on the organizations and individuals that own, oversee, and facilitate the operations of nursing homes.
Proposed Provisions
Given both the statutory mandate in section 1124(c) of the Act and the need to address quality of care concerns in nursing homes through increased transparency, this proposed rule would require the following:
- Medicare SNFs and Medicaid nursing facilities would need to disclose the data outlined in section 1124(c) upon initial enrollment and revalidation. Medicare SNFs would also have to: (1) report this information as part of any change of ownership pursuant to 42 CFR § 489.18; and (2) report any change to this data within the timeframes specified in 42 CFR § 424.516(e).
- For Medicare SNFs, the data would be reported via the Form CMS-855A Medicare enrollment application. For Medicaid nursing facilities, the data would be reported via means prescribed by the state.
The rule would also provide definitions of private equity company and real estate investment trust, setting the stage for Medicare SNFs to disclose whether each direct and indirect owning or managing entity is a private equity company or real estate investment trust. The revised Form CMS-855A, for which a revision notice was published in the Federal Register for 60-day public comment on December 15, 2022 (87 FR 76626), would collect, among other things, this private equity company and real estate investment trust data. If this revised form is finalized, Medicare SNFs would have to disclose this data on that version of the Form CMS-855A. Thus, the updated application (CMS-855A form) SNFs use for enrollment purposes would itself be the vehicle for requiring the private equity and real estate investment trust disclosures; we expect that the updated application will be ready for public use in summer 2023. Further, if our provisions in this proposed rule are finalized, the Form CMS-855A would again be revised to collect the data in section 1124(c).
Since, as mentioned, CMS and the states already collect some of the data in section 1124(c), CMS is also proposing that Medicare SNFs would not have to report this same information twice on the same Form CMS-855A Medicare enrollment application submission. CMS believes this approach would help alleviate the reporting burden on SNFs. States would have the discretion to adopt a similar policy.
CMS is further proposing a number of definitions to assist nursing homes in furnishing the requested data. This includes, for purposes of Medicare enrollment, definitions of private equity company and real estate investment trust.
Public Posting of Data
Consistent with section 6101(b) of the Affordable Care Act, CMS intends to make data reported pursuant to section 1124(c) publicly available if this rule is finalized. However, as indicated in the proposed rule, CMS would provide more information after the final rule is published regarding the timing, vehicle, and content of this publication.
For more information, please visit the Federal Register.
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