On November 17, 2023, the Centers for Medicare & Medicaid Services (“CMS”) finalized its proposed rule (“Final Rule”), found here, implementing certain sections of the Affordable Care Act to require the disclosure of certain ownership, managerial and other information regarding Medicare-participating skilled nursing facilities (“SNFs”) and Medicaid-participating nursing facilities (“NFs”).
As previously summarized by Hall Render here, the proposed rule titled “Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities” (“Proposed Rule”) sought to increase the transparency of the quality of care and operations of SNFs and NFs by requiring these facilities to disclose certain ownership and oversight data outlined in Section 1124(c) of the Social Security Act (the “Act”) upon initial enrollment or revalidation application.
As summarized below, the Final Rule finalizes these proposed revisions to take effect on January 16, 2024.
Data Reported Under Section 1124(c) of the Act
The Final Rule requires SNFs to disclose the following data to CMS (and for NFs, the applicable state Medicaid agency):
- Members of the facility’s governing body, including name, title and period of service of each member;
- The facility’s officers, directors, members, partners, trustees and managing employees, including the name, title and period of service of each such person or entity;
- Each person or entity who is an additional disclosable party 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.
Pursuant to the Final Rule, the definition of “additional disclosable party” includes a person or entity that:
- Exercises operational, financial or managerial control over the facility or a part thereof, or provides policies or procedures for any of the facility’s operations, 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 percent of the total value of such real property; or
- Provides management or administrative services, management or clinical consulting services or accounting or financial services to the facility.
Finalized Revisions to Form CMS-855A
For SNFs, the aforementioned data would be reported by completing the Form CMS-855A Medicare enrollment application (“CMS-855A” or “Form”). For NFs, the data would be reported via means prescribed by the applicable state Medicaid agency. Additionally, the Proposed Rule sought to provide definitions of private equity company (“PEC”) and real estate investment trust (“REIT”), whereby SNFs would disclose whether each direct and indirect owning or managing entity is a PEC or REIT through a CMS-855A. The Final Rule finalized its proposed definition of PEC but did not finalize its proposed definition of REIT to provide a definition consistent with the commentor’s concerns to be more consistent with current federal law and industry practice.
Public Posting of Data
CMS finalized the Proposed Rule’s requirement that the information provided per Section 1124(c) of the Act be publicly available within one year of the Final Rule.
Practical Takeaways
The Final Rule provides that Medicare SNFs will not have to disclose the data required by Section 1124(c) of the Act until the CMS-855A is (1) revised to collect this data, and (2) publicly available for use. It’s important to note that the Office of Management and Budget recently approved a revised Form (09/23 version), to account for the disclosure of ownership information as finalized by the Final Rule summarized above. The CMS factsheet confirms this updated version of the CMS-855A is now being accepted.
For more information on the Final Rule and revisions to the CMS-855A, please contact:
- Brian Jent at (317) 977-1402 or bjent@hallrender.com;
- Lauren Hulls at (317) 977-1467 or lhulls@hallrender.com;
- Julie Mitchell at (317) 429-3643 or jmitchell@hallrender.com;
- Sean Fahey at (317) 977-1472 or sfahey@hallrender.com;
- Todd Selby at (317) 977-1440 or tselby@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
