Lawmakers use report to push for transparency in nursing home ownership; target large chains

WASHINGTON, D.C.-Between 1998 to 2008, private investment firms acquired 1,876 nursing homes, with 10 large firms accounting for 89% of the purchases, according to a report from the Government Accountability Office (GAO).

The report argued that the laws during that 10-year period did not require sufficient disclosure of information on multihome chains, leading to a lack of accountability across the nursing home industry. Greater transparency regarding companies’ ownership of nursing homes is needed, the GAO report concluded.

Three lawmakers-Pete Stark (D-Calif.), House Ways and Means Subcommittee on Health chairman; Max Baucus (D-Mont.), Senate Finance Committee chairman; and Ranking Member Chuck Grassley (R-Iowa)-requested the report, titled “Complexity of Private Investment Purchases Demonstrates Need for CMS to Improve the Usability and Completeness of Ownership Data.”

The lack of clear ownership information makes it difficult for consumers and regulators to know who owns the nursing home and who bears responsibility for decision-making affecting quality of care and to hold those responsible parties accountable, the report stated.

“This GAO report found that a handful of private equity firms have been buying up nursing homes over the past decade-leaving seniors and their loved ones in the dark about who is making the decisions about their care,” said Stark. “New disclosure requirements in the health reform law will shed light on who owns nursing homes, who is making care decisions, and how these facilities are being run.”

The Affordable Care Act requires nursing homes to provide information to state and federal health officials about the facility’s ownership, governing body, and organizational structure. The new law also increases transparency of information related to nursing home staffing, certifications, complaints, criminal violations and expenditures, including wages and benefits for staff.

The three lawmakers have requested a subsequent GAO report that will evaluate the relationship between these corporate structures and the quality of care provided to nursing home residents.

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Long-Term Living 2010 December;59(12):11