The Centers for Medicare & Medicaid Services (CMS) on Wednesday released groundbreaking new data on nursing home ownership that administrator Chiquita Brooks-LaSure hopes will bring more transparency to health care and inform policy decisions moving forward.
“One of the things that we are particularly focused on is the turnover, not just at the staffing level, but at the ownership level as well,” Brooks-LaSure said. “We are really focused on transparency and how dollars are being spent and what we are seeing is a tremendous amount of change in the industry and we want to better highlight what’s happening there.”
She spoke on the topic, and others, during a roundtable discussion in Chicago with nursing home workers, advocates and state and federal officials.
The data provides information on mergers, acquisitions, consolidations and changes of ownership from 2016-2022 for nursing homes enrolled in Medicare. The agency said it was the first time such information was made available to the public.
Jonathan Blum, CMS COO and principal deputy administrator, thinks making data more transparent may help shape policy and potentially change behavior.
“I think this is a huge commitment towards us wanting to get better information to help inform policy and also help the public demand better answers about [how tax dollars are being spent],” Blum told reporters after the event Wednesday.
The data comes from CMS’s provider enrollment, chain and ownership system (PECOS), established in 2002. Providers must enroll and disclose ownership within 30 days of a change in ownership.
While the PECOS data itself is not new, information on ownership changes will now be more easily accessible.
An analysis of the data indicates that 348 hospitals and more than 3,000 skilled nursing facilities experienced a change in ownership between 2016 and 2021.
Among the key findings were that ownership changes were “much more common” for nursing homes than hospitals during the six-year timeframe.
Data shows that 62.3% of SNFs that were purchased have a single organizational owner. Between 2016 and 2021, 3,236 SNFs were sold – equating to 39.9 per 1,000 SNFs per year.
CMS plans to update the data quarterly.
Informing policy decisions
The data release comes on the heels of the White House’s unveiling of its comprehensive nursing home reform proposals, which in part called for greater transparency related to nursing home ownership. The topic has been a public policy concern for decades, according to CMS.
The Biden administration specifically pointed to private equity as a “dangerous model” that has been “buying up” struggling nursing homes, and while its impact to the overall market has been debated, CMS thinks the new data may be a useful tool to track quality of care.
“Private equity and other private investment firms have purchased SNFs; in some cases, new owners have sold the real estate assets to another entity under their control and then released the building back to the original facility with substantial management and consulting fees,” CMS said in its announcement.
The nursing home industry’s largest trade group, the American Health Care Association, said in a statement sent to Skilled Nursing News that it appreciates the efforts made by the administration to share this information and that it supports financial transparency for the sector moving forward.
“As we seek to better understand the potential impact of nursing home ownership trends, we must also consider how the chronic underfunding of long term care interplays with the financial decisions nursing home providers may feel pressured to make,” AHCA added. “Policymakers and providers should work in tandem on these efforts, so that no matter who owns a nursing home, residents receive the highest quality care.”
CMS suggests that the data could be used to further examine the impact ownership changes have on health care costs and how infection control, staffing, quality metrics and other factors are associated with the likelihood of a change in ownership in various states and across the country.
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