11/16/2023

Biden-Harris Administration Issues Final Rule on Disclosures on Nursing Home Ownership

The Biden-Harris Administration requires nursing homes to disclose additional ownership and management information to the Centers for Medicare & Medicaid Services (CMS) and states and makes this information public.

This week, the Department of Health & Human Services released research through its Office of the Assistant Secretary for Planning and Evaluation showing that private equity ownership is associated with poorer staffing conditions which drive decreases in quality of care. The Biden Administration issued a final rule including definitions of private equity and real estate investment trusts, setting the stage for identifying whether a nursing home belongs to one of these types of owners. These actions continue to build on the Biden-Harris Administration’s commitment to improving the safety and quality of care in the nation’s nursing homes. 

“HHS continues to take action to improve the safety, quality, and accountability of nursing homes,” said HHS Secretary Xavier Becerra. “The Biden-Harris Administration believes that residents living in nursing homes should receive the dignity, care, and respect they deserve. Taking steps to help consumers to learn more about the owners of a nursing home will allow them to make the choice that best meets their needs.”

The final rule requires nursing homes enrolled in Medicare or Medicaid — the majority of this country’s nursing homes — to disclose additional information regarding their owners, operators, and management; for example, nursing homes will disclose individuals or entities that provide administrative services or clinical consulting services to the nursing homes. Nursing homes will also be required to disclose entities that exercise financial control over the facility, such as an organization the nursing home hires to manage all of its financial matters.

The number of nursing homes sold each year has increased since 2016, generously outpacing that of hospitals. Between 2016 and 2021, 348 hospitals experienced a change in ownership, but 3,000 nursing homes experienced a change in ownership – four times more than hospitals. Nursing homes with lower Star quality ratings are sold more often than those with higher Star quality ratings, raising concerns about the relationship between ownership changes and quality.

Recent research has found that resident outcomes are significantly worse at private equity-owned nursing homes, and in the two to three years after real estate investment trusts invest in nursing homes, registered nurse staffing levels decline by as much as 6%. Private equity ownership of nursing homes may also lead to an uptick in Medicare costs. Additionally, the 10 largest nursing home chains own more than 10% of nursing homes — a disproportionate share that raises concerns about market concentration.

For a fact sheet on the final nursing home ownership disclosure rule, please click here.

For the ASPE report on nursing home ownership and quality trends, please click here.

The final rule can be downloaded from the Federal Register by clicking here.