Warren, Grassley, Casey, Lawmakers Call for Greater Transparency in Nursing Home Ownership to Hold Bad Actors Accountable and Keep Patients Safe
“Although CMS issued this proposed rule in May 2011, it was never finalized. Twelve years later, it’s time to finalize this rule to ensure the safety of our nation’s nursing home patients.”
Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.), Chuck Grassley (R-Iowa), and Bob Casey (D-Pa.) and U.S. Representatives Lloyd Doggett (D-Texas) and Katie Porter (D-Calif.) sent a bipartisan letter to Health and Human Services (HHS) Secretary Xavier Becerra and Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, calling on CMS to strengthen and finalize its proposed rule to make nursing home ownership more transparent.
“While we appreciate CMS taking steps to implement this long overdue rule, which establishes requirements for the disclosure of information about the owners and operators of Medicare skilled nursing facilities and Medicaid nursing facilities, we believe that certain provisions of the proposed rule could be strengthened for the benefit of patients. Specifically, we urge you to clarify ownership definitions, establish strong auditing and enforcement measures, and ensure that comprehensive reporting information is made available to the public in an easily searchable format,” wrote the lawmakers.
The Affordable Care Act established requirements for the disclosure of information about the owners and operators of Medicare skilled nursing facilities and Medicaid nursing facilities. In May 2011, CMS published a proposed rule to implement these provisions, but it was never finalized due to overwhelming opposition from the nursing home industry. The lawmakers are calling on CMS to finally implement this rule.
The proposed rule comes as reports show private equity-owned nursing homes are associated with higher Medicare costs and increased emergency department visits and hospitalizations – underscoring the importance of nursing home ownership transparency. Yet, private-equity firms use complex legal arrangements to obscure their ownership stakes in nursing homes and prevent regulators from holding them accountable for poor quality care.
“Increased transparency will empower older adults, their families, researchers, and health care providers to identify nursing homes that provide excellent care, while at the same time hold bad actors accountable,” continued the lawmakers. “To prevent nursing home owners from prioritizing profits over patients, these data will give CMS the tools to identify waste, fraud, and abuse of federal Medicare and Medicaid dollars.”
In addition, the lawmakers recommend that CMS consider strengthening its proposed rule in the following ways:
- Require more robust ownership reporting requirements for Medicare-certified nursing homes
- Require standardized reporting requirements for Medicaid-certified nursing homes.
- Require reporting of all related-parties in which nursing home owners have a direct or indirect stake.
- Require a complete listing of each facility in a nursing home chain owned by the same parent company.
- Provide clear reporting timelines and establish penalties for failure to report accurate information.
- Establish a requirement for annual auditing to verify data accuracy.
- Make these data available in a publicly searchable database.
To better understand how CMS intends to finalize this proposed rule, the lawmakers are asking the agency to answer a set of questions by June 1, 2023. CMS responded to the lawmakers on June 15, 2023, and its response can be found here.
Senator Warren has led the fight for stricter oversight of nursing homes and increased transparency, while calling out the risks of private equity’s ownership of nursing homes:
- In May 2022, Senator Warren and lawmakers sent a letter to private equity giant KKR for the grossly substandard care and unsafe living conditions in group homes it owned for people with intellectual and developmental disabilities.
- In February 2022, testifying before the Senate Budget Committee, Senator Warren called out private equity firms’ predatory practices of buying up distressed companies; stripping workers of benefits, fair pay, and safe working conditions, and reaping billions in profits. She noted that research shows that private equity ownership of nursing homes led to a 10% jump in short-term mortality rates.
- In October 2021, Senator Warren and lawmakers reintroduced the Stop Wall Street Looting Act, a comprehensive bill to fundamentally reform the private equity industry and level the playing field by forcing private investment firms to take responsibility for the outcomes of companies they take over, empowering workers, and protecting investors.
- In October 2021, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy, Senator Warren spoke about the need to protect companies and communities from destructive private equity practices as the industry’s growth continues to explode.
- In August 2021, Senator Warren and lawmakers launched an investigation into private equity ownership of for-profit hospice companies and subsequent reductions in the quality of care.
- In March 2021, Senator Warren released Genesis’s response to her January 2021 letter and sent a letter to the company, revealing new information that the company CEO - who left the company in near bankruptcy in January 2021 - has been awarded $8 million in salary and bonuses since the start of the pandemic. Senator Warren raised new questions about why the company lavishly rewarded its CEO after more than 2,800 of its residents died of COVID-19 and despite the fact that he left the company in dire financial conditions.
- In January 2021, Senator Warren sent a letter to Genesis Healthcare, Inc. (Genesis), one of the nation's largest nursing home chains, asking why their top executives, including their recently retired former CEO, have received millions of dollars in bonuses after more than 2,800 of their residents died of COVID-19 and despite the fact that the company has accepted $300 million in taxpayer-funded aid.
- In November 2019, Senators Warren and Sherrod Brown (D-Ohio), and Representative Mark Pocan (D-Wisc.) wrote to four private equity firms that invested in companies providing nursing home care and other long-term care services, citing reports that show private equity investment has played a role in the declining quality of care in nursing homes and requesting information about each firms' management of this sector,
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