As the Biden administration continues to set its sights on nursing home ownership transparency, most recently through the unveiling of a new database, two members of Congress are trying to take it one step further.
U.S. Rep. Jan Schakowsky of Illinois and Rep. Mark Takano of California last week introduced the Linking Investors and Nursing Home Quality (LINHQ) Act, a bill that aims to bring “long-overdue” transparency into nursing home ownership and financial activity.
Specifically, the legislation would require nursing homes and parties with ownership interests to disclose ownership and financial information each year — down to the 5% ownership level. Those who do not comply would be subject to admissions being barred and a suspension of federal payments until reporting and quality metrics are met, according to a news release.
Rep. Schakowsky described the role private equity has played in the nursing home sector as “extremely concerning.”
“The Linking Investors and Nursing Home Quality Act will ensure that there is transparency in who owns long-term care facilities, shed light on where taxpayer dollars are going, and ensure that nursing home residents and workers are protected,” she said in a statement.
The Biden administration has also called out the role of private equity and real estate investment trusts (REITs), going so far as to call PE a “dangerous model” that has been “buying up” struggling nursing homes.
However, while nursing homes can utilize a variety of debt and equity capital options, the U.S. Department of Housing and Urban Development (HUD) and local commercial lenders remain the most widely used options for operators, according to a report compiled by ATI Advisory and commissioned by the National Investment Center for Seniors Housing & Care (NIC).
The federal bill would also create a data liaison team within the Centers for Medicare & Medicaid Services (CMS) to identify patterns in ownership where facilities do not meet payroll-based journal (PBJ) levels of 4.1 direct care hours per resident; don’t comply with reporting requirements; or do not meet other federal government quality standards.
In the same vein, the legislation would establish an interagency board to review “poor quality” and noncompliant nursing homes, and refer those to other governmental agencies for further investigation, according to the release.
The agency would also submit a biannual report to Congress on its findings.
An analysis of the CMS provider enrollment, chain and ownership system (PECOS) data indicates that 348 hospitals and more than 3,000 skilled nursing facilities experienced a change in ownership between 2016 and 2021.
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.
Not everyone feels that these efforts to increase transparency, particularly as it relates to ownership, are worth the federal government’s time.
Calling the exercise “a colossal waste of time,” former CMS Administrator Seema Verma believes a more comprehensive approach — rather than the punitive approach the administration is taking — is needed to drive quality in the sector.
“We’re not sitting here trying to figure out who owns home health or who owns dialysis facilities or who owns providers. We’re kind of going through this exercise just in nursing homes because somehow we think that that’s going to increase quality of care,” Verma told Skilled Nursing News in an exclusive interview during the Synergy Summit conference in San Diego.
Companies featured in this article:
ATI Advisory, Centers for Medicare & Medicaid Services, National Investment Center for Seniors Housing & Care, U.S. Department of Housing and Urban Development
