Written by Adam Balick on November 21, 2023

CMS Expands Ownership Disclosure Requirements for Skilled Nursing Facilities

On November 17, 2023, The Centers for Medicare & Medicaid Services announced a final rule requiring skilled nursing facilities to publicly disclose additional ownership and management information.   The new rule is specifically intended to require disclosure of private equity and real estate investment trust ownership, as well as those with management and financial control.   The new rule will require SNFs that participate in Medicare and Medicaid to disclose specific ownership and financial data on initial enrollment, revalidation and reactivation, as well as during any change of ownership (CHOW).

In announcing the new rule, CMS’s Administrator said, “By strengthening our ability to examine nursing home ownership, including private equity and real estate investment trusts, we can improve transparency for the people we serve and their loved ones, researchers, and regulators, and enable better informed decisions about nursing home care.”

The CMS press release added, “Nursing homes frequently use other companies to provide major services or supports within a facility, but families currently have no way of knowing which different companies or firms provide care to their loved ones and how they might be connected to the owners of a nursing home. That will change under this rule.”

The rule expands the definition of “ownership” to include any party that: 1) exercises financial control over a SNF that leases or subleases property to the SNF, 2) has a 5 percent or greater stake in the value of SNF property, 3) provides administrative services, clinical consulting services, accounting or financial services, policies or procedures for any SNF operations, or 4) provides cash management services to a SNF.

The following individuals and entities will now have to be disclosed:

• Trustees.
• Additional Disclosable Parties, including people or entities that:
  • Exercise financial control over the SNF.
  • Lease or sublease real property to the SNF.
  • Own a whole or part interest equal to or exceeding 5% of the total value of such real property.
  • Provide to the SNF administrative services, clinical consulting services, accounting or financial services, policies or procedures for any of the SNF’s operations, or cash management services.

• Organizational structures of additional disclosable parties, such as the additional disclosable party’s board members.

CMS will update its Form CMS-855A to allow SNFs to disclose the required information.   Once the form is updated, CMS expects to initiate off-cycle revalidations of SNFs to obtain the information.

The final rule can be accessed at this link.   https://www.govinfo.gov/content/pkg/FR-2023-11-17/pdf/2023-25408.pdf

CMS has also prepared a Fact Sheet, which can be found at this link.  https://www.cms.gov/newsroom/fact-sheets/disclosures-ownership-and-additional-disclosable-parties-information-skilled-nursing-facilities-and-0