CMS Finalizes New Reporting Requirements for Nursing Homes, Health Providers

The Centers for Medicare & Medicaid Services (CMS) finalized reporting requirements originally enacted under the Affordable Care Act (ACA) about the owners and operators, including private equity company (PEC) and real-estate investment trusts (REITs) of Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities. Additionally, CMS extends PE, REIT reporting requirements to other Medicare providers.

The ACA was enacted in 2010. Although CMS originally proposed an implementation rule in 2011, it had not finalized the policies until now. The original statutory language is found under Section 6101(a) of the ACA.

In general, as part of a Form CMS-855A initial enrollment or revalidation application, a Medicare SNF would have to disclose to CMS — or for Medicaid nursing facilities, the applicable state Medicaid agency — the following information:

• Each member of the governing body of the facility, including the name, title, and period of service of each member
• Each person or entity who is an officer, director, member, partner, trustee, or managing employee of the facility, including the name, title, and period of service of each such person or entity
• Each person or entity who is an additional disclosable party of the facility
• The organizational structure of each additional disclosable party of the facility and a description of the relationship of each such additional disclosable party to the facility and to one another

These four items are pulled verbatim from the ACA statute. To help clarify what it wants reported, CMS finalizes certain definitions and key terms. There are slight variations between Medicare and Medicaid requirements, but the largest difference is that SNFs must report private equity (PE) or real estate investment trust (REIT) information while state Medicaid programs are not required to collect that from nursing homes but are encouraged to do so.

Here is a side-by-side overview of the definitions and requirements:

TERMS/DEFINITIONS	MEDICARE SNF	MEDICAID NURSING FACILITY
Additional disclosable party	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% 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.	Same
Managing employee	Specific to this requirement, managing employee means: An individual (including a general manager, business manager, administrator, director, or consultant) who directly or indirectly manages, advises, or supervises any element of the practices, finances, or operations of the facility.	Clarify that an individual can qualify as a managing employee:   (1) even if he or she is acting under contract or through some other arrangement; and   (2) whether or not the individual is a W–2 employee of the institution, organization, or agency.  Specific to this reporting requirement, an individual means: an individual (including a general manager, business manager, administrator, director, or consultant) who directly or indirectly manages, advises, or supervises any element of the practices, finances, or operations of the facility.
Organizational structure	For a corporation — The officers, directors, and shareholders of the corporation who have an ownership interest in the corporation which is equal to or exceeds 5%. For a limited liability company — The members and managers of the limited liability company including, as applicable, what percentage each member and manager has of the ownership interest in the limited liability company. For a general partnership — The partners of the general partnership. For a limited partnership — The general partners and any limited partners of the limited partnership who have an ownership interest in the limited partnership which is equal to or exceeds 10%. For a trust — The trustees of the trust. For an individual — Contact information for the individual.	Same

ADDITIONAL REPORTING CHANGES	MEDICARE SNF	MEDICAID NURSING FACILITY
New data elements	New data elements added to the Form CMS-855A through which owning and managing entities of SNFs would have to disclose whether they are either a private equity company or a REIT.   CMS finalizes definitions on this data element.   A private equity company would be defined as a publicly traded or non-publicly traded company that collects capital investments from individuals or entities (that is, investors) and purchases a direct or indirect ownership share of a provider (for example, SNF, home health agency, etc.).   A REIT would be defined as a real estate investment trust as described in 26 U.S.C. 856	CMS does not require in this regulation that states collect data signifying whether a particular organization reported is a private equity company or REIT, though CMS encourages this.
Frequency of reporting	Medicare SNF must report on initial enrollment and revalidation plus any change within the current timeframes for reporting changes in enrollment data — specifically, 30 days for changes in ownership or control and 90 days for all other changes. CMS would be able to collect this information as warranted and would not need to wait for SNF revalidation cycle. SNFs would not be required to report the same information twice on the same form.	CMS gives states deference in deciding whether to require this information be submitted more frequently than enrollment or revalidation. In addition, states would only have to require reporting of this information once in the same application submission, but the proposed rule gives deference to states should they want to require it in another area of the submission.

CMS responds to varies comments in the final rule including whether medical directors are managing employees. CMS says they are, indicating that in the final 2024 home health prospective payment system rule, CMS explicitly states managing employees includes SNF and hospice medical directors and administrators. CMS believes this change will make their stance clear — a position the agency says it has held for many years.

CMS intends to make this information public within one year of finalizing the regulation.

PEC, REIT definitions apply to other providers

In the proposed 2024 inpatient prospective payment system rule, CMS indicated it was looking at incorporating similar definitions and requirements into the revised CMS Form 855A. With this rule, CMS finalizes doing so. As such, any provider or supplier using the Form 855A would be required to report PEC or REITs. This includes hospitals, home health, hospice, health centers among others.

CMS explains that in finalizing this requirement beyond SNFs, the agency can “better understand the scope” of PEC and REIT involvement in the health care and that “limiting the collection of PEC and REIT data to SNFs would give us an incomplete picture of PEC and REIT impact on patient care.”

Outlook

The current administration has a concerted focus on the nursing home industry, including the role of private equity and REITs on quality and finances. Their interest in PEC in particular extends beyond SNFs to other Medicare providers. We expect their attention to continue.

How we can help

There is plenty on the plate for nursing homes. From the proposed nursing home staffing mandate to this new disclosure rule, CLA can help explain how your organization may be impacted. Contact us for assistance.