Bacon's Rebellion

by James C. Sherlock

Regulators and law enforcement agencies cannot oversee what they do not understand.  

They do not understand nursing home management structures, and thus, business models of chains whose facilities, due to the core role of understaffing in those models, routinely abuse and cause the untimely deaths of residents.

Section 1124(c) of the Social Security Act is designed to provide enforcers with the data needed to understand nursing homes, their chains, and their complex relationships with other entities that provide goods and services. It instructs the Secretary of Health and Human Services (HHS) to write rules to implement the law. He has done so.

On November 17, 2023, CMS published in the Federal Register a final rule title “Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities; Medicare Providers’ and Suppliers’ Disclosure of Private Equity Companies and Real Estate Investment Trusts” (88 FR 80141).  This final rule implements parts of section 1124(c) of the Act, which requires SNFs to disclose detailed information about their ownership and management as well as additional data regarding:

(1) other parties with which the SNF is associated; and

(2) the ownership structures of these other parties.

Refer to Medicare Enrollment for Providers & Suppliers for more information on the SNF disclosure requirements.

Section 6101(b) of the Affordable Care Act states that no later than one year after final regulations promulgated under section 1124(c) of the Act are published in the Federal Register, the Secretary shall make the information reported available to the public.  On November 21, 2024, CMS updated this dataset to include the reported information.

The Model to be Populated 

Below is a notional model that the rule aims to populate. Not shown for space reasons but required for reporting are co-owned suppliers of goods and services, such as durable medical equipment for residents and non-emergency medical transportation, that are billed separately to Medicare and Medicaid.

Many have yet to fully comply with that rule and, by extension, the law. They have claimed variously:

• The instructions are unclear. (Not really.)
• Compliance is a lot of work. (They have a point.)
• Reporting would “take nurses from bedsides.” (Nonsense. All nursing homes have administrators. Chain staffs are full of them.)

An unspoken reason is that many are obsessed with secrecy. They not only do not wish to expose themselves to regulatory scrutiny and criminal investigations, but also fear that the information they are required to provide could expose them to tort claims beyond individual facilities.

CMS last month backed off for a second time on a requirement to report additional ownership information out of cycle, meaning under a deadline, rather than waiting for a change of ownership. An industry spokesperson told McKnight’s Long Term Care News that:

Providers remain committed to transparency around ownership and to adhering to reporting requirements.

Well. We’ll look.

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