On Feb. 15, 2023, the Center for Medicaid & Medicare Services (CMS) published a proposed rule with the goal of increasing transparency between nursing homes and consumers.1
According to the
recent Federal Register publication, the proposed rule would implement portions 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.”2
This is the second time that CMS proposed requiring additional disclosures,
the first time being in 2011, in which CMS did not finalize its proposal.3
CMS noted, however, that a change in circumstance, including the “decline in nursing facility quality” and concerns regarding the impact on quality of private equity investment in nursing homes, has created a stronger sense of urgency to move forward with the rule at this time.
Comments on the proposed rule were accepted until April 14, 2023.4 This article breaks down what the proposed rule entails and how it will impact nursing homes if finalized.
What Information Would Nursing Homes Need to Disclose?
The proposal calls for nursing facilities to disclose the following information to CMS or, for
Medicaid nursing facilities, the applicable state Medicaid agency:
each member of the governing body of the facility including the name, title, and period of service of each member;
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;
each person or entity who is an additional disclosable party (defined below) of the facility; and
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.5
Note that to the extent that a Medicare SNF already reports certain ownership and managerial data via the
Form CMS-855A provider enrollment application, the SNF would not need to report the same data a second time.6
Who Would Be Considered An ‘Additional Disclosable Party?’
The proposed rule includes the addition of several defined terms, including a broad definition for “additional disclosable party,” which would include “any person or entity”7 who:
exercises operational, financial, or managerial control over the facility or a part thereof, or provides policies or procedures for any of the operations of the facility, or provides financial or cash management services to the facility;
leases or subleases real property to the facility, or owns a whole or part interest equal to or exceeding 5% of the total value of such real property;
provides management or administrative services, management or clinical consulting services, or accounting or financial services to the facility.8
When Would Disclosure Occur?
Under the current proposed rule, nursing homes would have to disclose such information in three instances:
initial enrollment in Medicare or Medicaid;
revalidation of Medicare or Medicaid enrollment; or
upon the occurrence of a change of information (the reporting of which would have to occur within a certain time period).9
How is This Different from Prior Ownership Disclosure Rules?
The proposed rule would implement portions of the Affordable Care Act, specifically Section 6101(a), which requires nursing facilities enrolled in Medicare or Medicaid to disclose additional information regarding owners, operators, and management.
The proposed rule would also add elements to the CMS 855A, through which owning and managing entities would be required to disclose whether they are a private equity company or a real estate investment trust (REIT), providing definitions of “private equity company” and “real estate investment trust.”
Finally, the proposed rule creates the requirements that the information would be accessible to the public (more on this below).
Where Would This Data Be Reported?
For Medicare SNFs, the data would be reported via the Form CMS-855A Medicare enrollment application.
For Medicaid nursing facilities, given that “states have considerable discretion in the operational aspects of their Medicaid provider enrollment programs,” reporting of data would be via means prescribed by the state.
The proposed rule does, however, encourage states to adopt measures such as “establish[ing] reporting requirements regarding changes in the data required under section 1124(c) of the Act, including when the provider changes its ownership,” and “collect[ing] data signifying whether a particular organization reported under section 1124(c) of the Act is a private equity company or REIT.”10
When Would This Rule Take Effect?
While, if finalized, the rule would become effective 60 days after a final rule is published in the Federal Register, Medicare SNFs would not be required to make disclosures until CMS makes publicly available an updated Form CMS-855A to collect the disclosure data.
A similar scenario applies to Medicaid nursing facilities who would not be required to make the required disclosures “until the applicable State Medicaid agency has established the means to collect it.”11
As the proposed rule gives states a considerable amount of discretion in the operational aspects of their Medicaid provider enrollment programs, the number of projected initial and revalidation applications reporting this information, as well as the time it takes the facility to disclose the data, will likely vary from state to state depending on whether states already collect the required information.
Who Would Have Access to this Data?
If finalized, CMS intends to make the disclosed information publicly available within one year after the final regulation is published in the Federal Register.12 It is unclear where this data would be made available, though the CMS notes that it would consider making this data available on
This article was originally published on the State Bar of Wisconsin’s
Health Law Blog. Visit the State Bar
sections or the
Health Law Section webpages to learn more about the benefits of section membership.
Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities, 88 Fed. Reg. 9820 (Feb. 15, 2023).
2 For reference, the applicable section of the Affordable Care Act is Section 6101(a).
3Id. at 9820.
4Id. at 9820.
5Id. at 9820.
6Id.at 9824 (“While proposed paragraph (g)(1)(ii) also would require SNFs to disclose this data, the SNF would not have to report it twice on the same Form CMS-855A submission: once per sections 1124(a) and 1124A of the Act and again per section 1124(c) of the Act.”).
7 With respect to a skilled nursing facility defined at section 1819(a) of the Social Security Act.
8 This duplicates the definition of the same term in section 1124(c)(5)(A) of the Social Security Act.
9 Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities, 88 Fed. Reg. 9820, 9821 (Feb. 15, 2023).
10Id. at 9825.
11Id. at 9821.
12Id. at 9825.