The Department of Health and Human Services should clarify and provide better definitions in a proposed nursing home ownership rule, long-term care provider groups say. The comment period ended Friday for the rule, which the government says is intended to make more clear ownership and management operations of facilities.
The rule was proposed in February. When finalized, additional disclosure requirements would be effective 60 days after the rule’s release.
The rule would use part of the Affordable Care Act to require nursing homes enrolled in the Medicare or Medicaid programs to disclose the individuals, private equity firms or real estate investment trusts or entities that provide administrative services or clinical consulting services to them.
Provider responses have been split on the rule since its inception. LeadingAge has spoken in favor of the Centers for Medicare & Medicaid Services proposal, whereas the American Health Care Association has viewed it as more of a “red herring” in nursing home reform.
In written comments to CMS Friday, LeadingAge said that “without additional definition or clarification of certain terms, the proposed rule may result in disclosures that are overly broad, including certain facility employees, as well as consultants, advisors, and other service providers that nursing homes routinely engage, that do not own, control or manage the operations and activities of facilities in a manner that the rule is intended to address.”
Without precise descriptions, AHCA wrote Thursday to CMS Administrator Chiquita Brooks-LaSure, “it is possible that CMS will not be able to collect the relevant information that it is seeking and it may receive a significant amount of information that is unnecessary.”
Gregory T. Limoncelli, co-chair of law firm Akerman LLP’s senior living and care sector team and a partner in the corporate practice group, told the McKnight’s Business Daily: “While there is certainly benefit to more transparency in efforts to root out fraud and waste in the Medicare/Medicaid systems, the proposed regulations appear to see the additional disclosures as an effort to improve bedside care. I am not sure as to how the increase in disclosure results in that improvement unless you assume that increased disclosure would frighten away from the industry solely bad actors that have a say over operations. This assumption ignores the confidential nature of many equity investors for competitive and privacy purposes as well as the time and effort needed to comply.”
Additionally, attorney Myla Reizen, a partner in K&L Gates’ Miami office, noted that recent research provided by CMS asserts that resident outcomes are significantly worse at private-equity nursing homes. The downside to the proposed rule, she said, is that if the rule becomes permanent, then additional disclosures could mean added costs for private equity-backed nursing homes and REITs as they add layers of review to ensure transparency.
“Capital will flow where it makes the most sense, and these are clear disincentives to good as well as bad actors. In an industry that desperately needs capital to rehabilitate aging facilities and, moreover, add new facilities to address the growing aging population, to strike out against an entire capital source could do more harm than good,” Limoncelli said.
