On February 13, 2023, the Centers for Medicare & Medicaid Services (“CMS”) proposed a rule, found here, to implement certain sections of the Affordable Care Act (“ACA”) that would require the disclosure of certain ownership, managerial and other information regarding Medicare-participating skilled nursing facilities (“SNFs”) and Medicaid-participating nursing facilities (“NFs”). The purpose of the proposed rule is to provide CMS and the states a more comprehensive background on ownership and control of SNFs and NFs. These proposed regulations follow through on the Biden Administration’s commitment made in the 2022 State of the Union to implement the ACA’s requirements regarding transparency in corporate ownership of nursing homes, including by collecting and publicly reporting more robust corporate ownership and operating data.
For healthcare providers who operate or work in SNFs and NFs, this proposed rule is a significant development that underscores the importance of transparency and accountability. It highlights the desire by CMS to receive accurate and up-to-date information about owners and operators to ensure that they are providing high-quality care to patients.
Data Reported under Section 1124(c)of the Social Security Act
In an effort to increase the transparency of the quality of care and operations of SNFs and NFs, the proposed rule would require these facilities to disclose ownership and oversight data outlined in section 1124(c) of the Social Security Act (the “Act”) upon initial enrollment or revalidation application.[1]
The data required to be disclosed by the proposed rule includes, but is not limited to: (1) members of the facility’s governing body; (2) the facility’s officers, directors, members, partners, trustees and managing employees; (3) parties that exercise operational, financial, or managerial control over the facility or a part thereof; (4) parties who lease or sublease real property to the facility, or have a whole or part interest equal to or exceeding 5% of the total value of such real property; and (5) parties that furnish management or administrative services, management or clinical consulting services or accounting or financial services to the facility.
For SNFs, the 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 particular state Medicaid agency.
Proposed Revision to Form CMS-855A
The proposed rule seeks to provide definitions of private equity company and real estate investment trust, whereby SNFs would disclose whether each direct and indirect owning or managing entity is a private equity company or real estate investment trust through a CMS-855A.
For reference, the purpose of the CMS–855A is to gather information from a Medicare provider or supplier, such as identifying information, whether it meets certain qualifications to be a health care provider, where it practices or renders services and other information necessary to establish participation eligibility and correct claims payments.
On December 15, 2022, an information collection request regarding the revision of the CMS-855A was published in the Federal Register (87 FR 76626), along with a supporting statement outlining the requested changes, found here. The 60-day public comment period on the information collection request ended on February 13, 2023.
If finalized, SNFs would be required to disclose private equity company and real estate investment data on the revised version of the CMS-855A once the updated version is released for use. CMS anticipates the updated CMS-855A to be ready for public use this summer.
Public Posting of Data
Lastly, CMS intends to make data reported in accordance with section 1124(c) of the Act publicly available within one year of finalizing this proposed rule. CMS states in the proposed rule that data may be available on data.cms.gov, however, further information regarding the published data would be provided to the public in sub-regulatory guidance.
Takeaways
- It is important to note that CMS already collects some of the data in section 1124(c), and this proposed rule aims to fill gaps in the information that is currently reported.
- SNFs and NFs should monitor the progress of this proposed rule and prepare to comply with any new reporting requirements that may be imposed. They should also be prepared to provide complete and accurate information about the ownership and management of their facilities to ensure that regulators have the information they need to monitor and enforce quality of care standards.
- Comments on the proposed rule may be submitted until April 14, 2023.
For more information on the proposed rule and revisions to the CMS-855A, or would like any assistance preparing public comments, 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; 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.
