The final rule comes amid mounting concerns about the role private equity companies and other investment firms play in the quality of care in nursing homes.
Studies show that private equity ownership is associated with poorer staffing conditions and decreases in quality of care, the Centers for Medicare and Medicaid Services said.
The final rule includes specific definitions of private equity and real estate investment trusts, setting the stage for identifying whether a nursing home belongs to one of those types of owners.
The rule will require nursing homes that receive Medicare and Medicaid reimbursement to disclose additional information regarding their owners, operators and management; for example, nursing homes will disclose individuals or entities that provide administrative services or clinical consulting services to the nursing homes.
Nursing homes frequently use other companies to provide major services or support 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, the administration said.
The additional data required to be reported under the rule will be public, the administration said, allowing families to make more informed choices about the care of their loved ones. It will also allow the federal government to see a much fuller picture of nursing home ownership.
Between 2016 and 2021, 348 hospitals experienced a change in ownership, compared to 3,000 nursing homes. But officials did not know how many of those transactions involved private equity or real estate investment trusts.
The rule was applauded by sunshine advocacy groups and bipartisan lawmakers.
“For too long, our nation’s nursing home system has lacked critical federal policies to protect our loved ones and seniors at a time when they can’t always advocate for themselves. This final rule will bring long overdue transparency and accountability,” said Sen. Chuck Grassley (R-Iowa).
“This final rule from the Biden administration will allow us to look under the hood of these facilities, giving us the tools we need to better protect nursing home residents and hold negligent or profiteering facility owners accountable,” said Sen. Bob Casey (D-Pa.), chairman of the Senate Special Committee on Aging .