The Centers for Medicare & Medicaid Services (CMS) published a proposed rule on February 15, 2023, that would set standards for the disclosure of information from nursing homes about their ownership and oversight. When finalized, the proposed rule should place greater scrutiny on nursing homes and give prospective residents, along with their families, more resources to make informed decisions when choosing a nursing home. We discuss the proposed rule from CMS in more detail below and explain how these changes could benefit nursing home residents in the future.
The Problem with For-Profit Nursing Homes
The safety of nursing home residents and their quality of care has been a growing concern for CMS over the past several years with an estimated 70% being for-profit. A possible explanation for the safety problems in privately-owned nursing homes could be the inherent tension in their operation. Administrators regularly find themselves making choices in the interest of investor profits at the expense of giving residents the highest quality care.
The COVID-19 pandemic further compounded and highlighted concerns over poor conditions as nursing home residents were (and continue to be) some of the most at-risk members of our community. Last year, the White House released a statement on the current state of our country’s privately acquired nursing homes, which included some startling data points from academic studies. For example:
- Of the inspected nursing homes between 2013 to 2017, 82% had some deficiency in federal infection prevention and control guidelines.
- Residents of private equity-owned facilities were 11.1% more likely to have an avoidable emergency department visit and nearly 8.7% more likely to face an avoidable hospital stay.
- There was at least a 10% increase in excess resident mortality.
- There was about a 50% increase in antipsychotic drug prescriptions.
- There was around a 30% to 40% increase in COVID-19 infection and death rates for residents.
Details of CMS’s Private Equity Disclosure Rules for Nursing Homes
Some of the key changes to the CMS’s proposed disclosure rules are as follows.
Additions to Medicare Enrollment Disclosures
When private nursing homes initially enroll for Medicare and Medicaid participation, they must submit documentation with information about the business. The CMS proposed rule would add to the reporting information by requiring disclosure of:
- The name, title, and length of service for each member of the nursing home facility’s governing body
- Every director, member, partner, trustee, and managing employee of the facility, including both individuals and entities
- Every “additional disclosable party” of the nursing home facility, including details of their organizational structure and relationship to the facility
The organizational structure of a disclosable party refers to their ownership and management (e.g., the officers, directors, and shareholders of a corporation or the trustees of a trust).
The proposed rule further defines “additional disclosable party” to include the following persons or entities:
- Those with operational, financial, or managerial control of the facility or any part of the facility
- Those who provide the facility with any operational policies or procedures
- Those who provide financial or cash management services
- Those who lease or sublease real property to the facility and those who own a whole or partial interest in the real property of 5% or more
- Those who provide key services to the facility (e.g., management or administration, clinical consulting, accounting, or financial services, etc.)
New Disclosures for a Nursing Home’s Medicaid Enrollment
The CMS proposed rule would add the same new disclosures under the Medicare enrollment discussed above as well as make some other changes. First, the new rule would more broadly define who a “managing employee” is for disclosure purposes to include people regardless of:
- The nature of their working arrangement (i.e., contractual, or otherwise)
- Their status as a W-2 employee of the institution, organization, or agency
Other Rule Additions Related to the Proposed Disclosure Requirements
CMS intends to make the data received from these disclosures available to the public, potentially through its website. CMS would also maintain the current certification standard for the person who supplies and undersigns the new disclosures on the enrollment application. In other words, they would certify the information is “true, correct, and complete” as opposed to “to the best of my knowledge,” which is a lesser standard.
How Additional Disclosures from Nursing Homes Could Improve Resident Care in the Long-Term
For-profit nursing homes tend to prioritize profits over people. The consequence of those financial decisions usually manifests at the expense of residents in the following ways:
- Having inadequate nursing staff-to-patient ratios that lead to residents not receiving basic care (e.g., feeding, bathing, and other hygiene), can lead to great harm.
- Having a lack of resources to properly identify problems before they become serious (i.e., the delayed or missed diagnoses of medical conditions).
- Having insufficient supplies and equipment to prevent bedsores and pressure sores (e.g., specialty wheelchairs and beds that help the body alleviate pressure points).
The proposed rules from CMS should help with accountability and transparency in the nursing home business in three ways: (1) identify the owners and managers behind poor-performing nursing homes; (2) allow for faster recourse against those owners through the help of bedsore lawyers; and (3) help future residents make smart choices about the nursing homes they choose.
Identifying Bad Actors
The data from CMS’s proposed disclosures should help identify the private equity firms, companies, and trusts behind poor-performing nursing homes. This should improve awareness among consumers and provide an opportunity for news outlets to report on these connections, which could incentivize better action from private ownership groups to avoid bad publicity.
Holding Liable Owners Accountable
For harmed residents and their families, litigation is the most common form of recourse for damages from nursing home abuse. With faster access to information about the decision makers behind a nursing home, bedsore attorneys and other nursing home abuse lawyers will be able to hold all parties accountable where possible. Without this change, determining all liable parties could take longer because the information gathered would be limited to private investigation or discovery during litigation against the nursing home, some of which is never disclosed.
Informed Consumers of Nursing Home Services
With greater public information about a nursing home’s ownership and management, families of prospective residents can perform greater research into a specific facility. With proper research, consumers of nursing home services will have greater insight into a nursing home’s reputation as well as the reputation of its private equity investors. For example, searching for news stories of prior incidents or litigation alleging nursing home abuse.
Possible Future Rulemaking from the White House’s Direction
The proposed rules from CMS are just one part of the White House’s stated commitment to improving the quality of nursing home facilities and the care they provide. Based on other directives from the White House, we may see additional changes that would further add to the improvement of care for nursing home residents. Some of these areas for improvement could include:
- Minimum nursing home staffing requirements
- Reduction in crowding of resident rooms, especially multi-occupancy rooms with 3 or more people
- Incentive funding based on quality performance
- Safeguards into the diagnosis and prescription of antipsychotic medication
- Increased funding for inspection activities
- Increased financial penalties and enforcement sanctions for poor performers
Contact a Bedsore Lawyer Today for Questions on Nursing Home Negligence and Abuse
CMS’s proposed disclosures, if finalized, would be a win for residents and their families when it comes to transparency and accountability.