Proposed Rule Highlights Continued Push by CMS for Skilled Nursing Facility Ownership Transparency

Footnotes for this article are available at the end of this page.

In recent years, the Biden administration and Congress have pushed for greater transparency in skilled nursing facility ownership. In an effort focused on increased ownership disclosures specifically related to private equity and real estate investment trust (“REIT”) ownership, the Centers for Medicare & Medicaid Services (“CMS”) has proposed new regulations that would affect Medicare and Medicaid-enrolled providers. The proposed rule, entitled “Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities,” was published in the Federal Register on February 15, 2023.1

If finalized, the new rule would become effective 60 days after the date the final rule is published in the Federal Register. However, Medicare-enrolled nursing facilities would not be required to disclose the additional data until the Form CMS-855A is revised to capture this data.

Statutory Background

In its proposed rule, CMS would implement portions of Section 6101 of the Affordable Care Act (ACA), requiring the disclosure of certain ownership, managerial, and other information regarding Medicare and/or Medicaid-enrolled nursing homes. Section 6101 of the ACA added a new section to the Social Security Act, located at 42 U.S.C. § 1320a-3, requiring “disclosing entities” under the Medicare and Medicaid programs to provide the Secretary of Health & Human Services or the appropriate state agency with “full and complete information as to the identity of each person with an ownership or control interest . . . in the entity.” The term “person with an ownership or control interest” is defined to include a person who:

(A)(i) has directly or indirectly (as determined by the Secretary in regulations) an ownership interest of 5 per centum or more in the entity; or

(ii) is the owner of a whole or part interest in any mortgage, deed of trust, note, or other obligation secured (in whole or in part) by the entity or any of the property or assets thereof, which whole or part interest is equal to or exceeds 5 per centum of the total property and assets of the entity; or

(B) is an officer or director of the entity, if the entity is organized as a corporation; or

(C) is a partner in the entity, if the entity is organized as a partnership.

Further, the entity must provide information related to “additional disclosable parties,” which includes any person or entity who:

(i) 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;

(ii) 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

(iii) provides management or administrative services, management or clinical consulting services, or accounting or financial services to the facility.3

In its fact sheet regarding its new proposed rule, CMS states that certain information it is authorized to collect under the statutory language above is not currently being collected and that “[t]his additional data would give CMS and the states a more complete background on the organizations and individuals that own, oversee, and facilitate the operations of nursing homes.” The proposed rule is intended to rectify this gap in information collection.

Those familiar with CMS disclosure requests will notice that similar proposals were included in the May 6, 2011, proposed rule titled, “Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Disclosure of Ownership and Additional Disclosable Parties Information.” As noted in the February 13, 2023, Federal Register, CMS “did not finalize [the 2011] proposed disclosure provisions in the subsequent final rule . . . due to the need for more time to consider the comments received.”

CMS Proposal

In the proposed rule, CMS notes that it has received “information regarding particular categories of nursing facility owners (including, but not limited to, private equity companies and real estate investment trusts) that has generated concerns about the standard of care that nursing facility residents receive.” As a result, CMS decided to increase information collected through the Medicare and Medicaid programs.4 The three primary proposals in the rule include:

1. Additional disclosures: Regulations will be modified to ensure that the following is reported on an ongoing basis, including within 30 days of a change of ownership or control and 90 days for all other changes (and not just at initial enrollment):

a. Each member of the governing body of the facility, including the name, title, and period of service of each member;

b. 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;

c. Each person or entity who is an additional disclosable party of the facility; and

d. 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.

2. Timing of reporting: Nursing facilities would be required to report the information above upon initial enrollment, when revalidating, and within required timeframes specified in 42 C.F.R. § 424.516(e).

3. Definitions: CMS proposes adding the following definitions in the final rule, which will relate to additional disclosure requirements:

a. Private equity company: A publicly traded or non-publicly traded company that collects capital investments from individuals or entities (that is, investors) and purchases an ownership share of a provider (for example, SNF, home health agency, etc.).
b. Real estate investment trust: A publicly traded or non-publicly traded company that owns part or all of the buildings or real estate in or on which the provider operates.

Regarding the proposed definitions, CMS states:

We recognize that these definitions may be modestly different from definitions of the same terms used in other settings. We solicit comment on the propriety of our proposed definitions and welcome any suggested revisions thereto; we particularly seek comment on whether our proposed definition of private equity company should include publicly traded private equity companies. We also welcome public feedback regarding any other types of private ownership besides private equity companies and REITs about which CMS should consider collecting information from SNFs as part of the enrollment process.

Implementing the New Rules via Changes to Form CMS-855A

In an effort related to the changes described above, CMS also proposed changes to the Form CMS-855A, the form CMS uses to collect information related to Medicare Part A providers, including skilled nursing facilities.  Most notably, the Form CMS-855A would be modified as follows:

  • The definitions section would include the following definitions (definitions may be similar, but not identical, to the definitions above):
    • Private equity company (for Medicare purposes): A non-publicly traded company that collects capital investments from individuals and/or entities (i.e., investors) and purchases an ownership share of a provider (e.g., skilled nursing facility, home health agency, etc.).
    • Real estate investment trust (for Medicare purposes): A publicly or non-publicly traded company that owns part or all of the buildings or real estate (i.e., real property) in or on which a Medicare provider operates.
    • Holding company: A business entity, usually a corporation or limited liability company (LLC), created to hold the controlling stock or membership interests in other companies.
  • Section 5 (Ownership Interest and/or Managing Control Information (Organizations)) would be updated to include additional types of organizations. That is, once an entity has been disclosed in Section 5, the applicant must identify whether the disclosed entity is a consulting firm, holding company, investment firm (other than a private equity company), management services company, private equity company, or real estate investment trust.

The proposed rule is accessible here.

For more information, please contact AGG Healthcare attorneys Hedy Rubinger, Jessica Grozine, or Alex Foster.


The Arnall Golden Gregory CHOW team leads all regulatory aspects of healthcare transactions for investors, operators, managers, capital partners, and developers of every size in all 50 states. The team streamlines the regulatory process so that clients close their transactions on or ahead of schedule. Whether obtaining licensure and Medicare/Medicaid approvals, structuring transactions to expedite closings, anticipating issues to minimize cash flow disruption, negotiating regulatory terms in deal documents, creatively resolving diligence issues, or advising on CHOW guidelines and compliance, the team provides extensive experience and practical solutions. To date, the CHOW team has served as primary regulatory counsel in transactions valued at more than $35 billion.


[1] 88 FR 9820-01.

[2] 42 U.S.C. § 1320a-3(a)(3).

[3] 42 U.S.C. § 1320a-3(c)(5)(A).

[4] Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities, 88 FR 9820-01.