Greater transparency may have unintended consequences.

The Biden administration and Congress have been pushing for greater transparency in SNF industry but there may be unintended consequences. The Centers for Medicare & Medicaid Services ("CMS") has proposed new regulations aimed at increasing ownership disclosures, particularly in relation to private equity and real estate investment trust ("REIT") ownership. The proposed rule, titled "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.

Important to note, should the proposed rule be finalized, it will come into effect 60 days after its publication in the Federal Register, and Medicare-enrolled SNFs will only be required to disclose the additional data once the Form CMS-855A has been revised to capture this information.

As federal regulators move closer to finalizing a proposed rules some have cautioned that while the rule seeks to require facilities to disclose information on entities providing administrative or clinical consulting services and those leasing or subleasing property, the definitions provided are broad, which could make it difficult for providers to understand what needs to be disclosed.

Additionally, the rule's tone has also been described as "demonizing" private equity, which could scare off much-needed investments, leaving facilities without capital for staffing and renovations. The inherent negative bias toward private equity may be fully unfounded and detract from more pressing regulatory and funding issues.

There is unanimous agreement that the federal government has a legitimate responsibility to prevent fraud and ensure appropriate use of Medicare and Medicaid funds. Yet, industry and patient advocates continue to focus on far more pressing issues facing the Skilled Nursing industry. One blinding example of issues that can truly benefit from administration's attention is the systemic staffing shortage that is affecting healthcare providers across the country. The shortage is being felt particularly acutely in skilled nursing facilities, where there is a high demand for skilled professionals such as Registered Nurses. The shortage is being driven by a number of factors, including an aging population, the retirement of existing healthcare workers, and increased demand for healthcare services. This shortage is not only affecting the quality of care that patients receive, but also putting a strain on the healthcare system as a whole. Without adequate staffing, healthcare providers are struggling to keep up with demand, and patients are suffering as a result.

We look forward to exploring practical solutions that will have a lasting, systemic and positive effects on healthcare providers, and the recipients our ever-expanding healthcare system.

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