Continuing the theme of increased transparency of ownership of nursing homes included in the 2010 Affordable Care Act, the White House issued a Fact Sheet titled "Protecting Seniors and People with Disabilities by Improving Safety and Quality of Care in the Nation's Nursing Homes" in advance of the State of the Union address.1 Reforms to be developed by and implemented through the Department of Health and Human Services ("HHS") and its Centers for Medicare & Medicaid Services ("CMS") were introduced in the Fact Sheet to focus on transparency of ownership of nursing homes. The nursing home industry was singled out in the announcement.
Increase Accountability for Chain Owners of Substandard Facilities
President Biden announced that he is turning to Congress to give CMS new authority to require minimum corporate competency to participate in Medicare and Medicaid programs. The proposed new authority would allow CMS to exclude an individual or entity from obtaining a Medicare or Medicaid provider agreement for a nursing home (without regard to the whether the facility is newly constructed or acquired through a change of ownership) based on the Medicare compliance history of the individual's or entity's other owned or operated facilities. Another aspect of the proposed new authority includes the ability for CMS to impose enforcement actions on facility owners and operators even after they close a facility. This enforcement authority would include actions against owners or operators of multiple facilities that consistently provide substandard and noncompliant care in only some of the facilities that they own or operate.
Improve Transparency of Facility Ownership and Finances
It was also announced that CMS plans to collect and publicly report more robust corporate ownership and operating data. It will also make this information easier to find on the Nursing Home Care Compare website. Additionally, CMS will design and implement a new database to track and identify owners and operators across states to highlight any previous issues with resident health and safety. Information collected through provider enrollment and health and safety inspections will be input into the database to provide information on prospective owners and operators to states.
Examine the Role of Private Equity and REITS
Included within the proposal is the announcement that federal agencies such as HHS intend to study the role of private equity, real estate investment trusts (REITs), and other investment ownership in the nursing home sector in order to inform the public when the corporate entities behind nursing homes are not serving their residents' health and safety interests.
Footnotes
1. FACT SHEET: Protecting Seniors and People with Disabilities by Improving Safety and Quality of Care in the Nation's Nursing Homes can be viewed at https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/ (last accessed March 2, 2022).
2. The Arnall Golden Gregory Change of Ownership (CHOW) team leads all regulatory aspects of healthcare transactions for investors, operators, managers, capital partners, and developers of every size in all 50 states. The team streamlines the regulatory process so that clients close their transactions on or ahead of schedule. Whether obtaining licensure and Medicare/Medicaid approvals, structuring transactions to expedite closings, anticipating issues to minimize cash flow disruption, negotiating regulatory terms in deal documents, creatively resolving diligence issues, or advising on CHOW guidelines and compliance, the team provides extensive experience and practical solutions. To date, the CHOW team has served as primary regulatory counsel in transactions valued at more than $25 billion.
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