On April 14, 2023, the Attorneys General of 18 different states sent a letter to Health and Human Services (HHS) Secretary Xavier Becerra, and Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, in support of a proposed rule that would require the disclosure of certain ownership information regarding Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities (collectively “Nursing Facilities”), particularly from private equity investors and real estate investment trusts (the “Proposed Rule”).

HHS and CMS issued the Proposed Rule on February 15, 2023, with a comment period that ended on April 14, 2023. Under the Proposed Rule, Nursing Facilities would have to disclose:

• The name, title, and period of service of each member of the governing body;
• The name, title, and period of service of each person or entity who is an officer, director, member, partner, trustee, or managing employee of the Nursing Facility
• Each person or entity who is an additional disclosable party of the Nursing Facility. “Additional disclosable party” is defined in the Proposed Rule as “any person or entity who: (1) exercises operational, financial, or managerial control over the facility or a part thereof, or provides policies or procedures for any of the operations of the facility, or provides financial or cash management services to the facility; (2) leases or subleases real property to the facility, or owns a whole or part interest equal to or exceeding 5 percent of the total value of such real property; or (3) provides management or administrative services, management or clinical consulting services, or accounting or financial services to the facility.”
• The organizational structure of each additional disclosable party of the Nursing Facility and a description of the relationship of each such additional disclosable party to the facility and to one another.

Additionally, the Proposed Rule contemplates adding data elements to the Form CMS-855A requiring owning and managing entities of Nursing Facilities to disclose whether they are either a private equity company or a real estate investment trust. Such information would be made publicly available.

The State Attorneys General issued the letter in support of additional disclosure requirements, and cited concerns regarding for-profit ownership of Nursing Facilities (including the alleged impact on quality of care). This follows a trend of enhanced scrutiny of for-profit Nursing Facilities at both the state and federal levels. However, any final version of the Proposed Rule issued by HHS and CMS will be notable for both non-profit and for-profit Nursing Facilities as many of the requirements of the Proposed Rule apply to all Nursing Facilities enrolled in Medicare and or Medicaid.

The letter was signed by the Attorneys General of Arizona, California, Delaware, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.

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