White House Turns Up Heat on Nursing Home Owners

The Biden Administration, which in November notified nursing home operators it is planning to impose a new standard for care at skilled nursing facilities, now is planning to require more transparency about who owns or provides services at these facilities.

The proposal, unveiled on Monday, would require nursing homes that receive Medicare and/or Medicaid reimbursement to disclose investments by private-equity companies or REITs in nursing homes, and to provide information—which will be made public—about individuals or organizations that are providing care and services, according to a report in the Wall Street Journal.

President Biden has criticized private-equity ownership of nursing homes, suggesting that equity funds and REITs—he calls them “Wall Street”—are driving down quality and raising costs.

Last month, the Centers for Medicare & Medicaid Services, which has stepped up targeted audits and compliance surveys at nursing homes, announced that it will begin to publicly display survey citations as soon as the citations are issued—before nursing home operators can respond to these complaints.

The centerpiece of the Biden Administration’s reform of nursing homes is a proposal to establish a staffing minimum of 4.1 hours of nursing care per resident day at skilled nursing facilities.

The American Health Care Association (AHCA) has estimated that it will cost nursing home operators $11.3B annually to meet the staffing requirement, which also would entail hiring an additional 191K nurses and nurse aides in the midst of a national shortage of nurses—at a time when operators’ margins are being squeezed by rising costs.

Health and Human Services Secretary Xavier Becerra has said that the pandemic exposed systemic deficiencies in the care provided at US nursing homes, repeatedly implying that better care might have reduced the pandemic death toll in nursing homes—estimated at more than 160,000.

Critics have noted that many of the worst outcomes at nursing homes occurred in states like New York, the epicenter of the COVID-19 outbreak in March 2020—when then-Gov. Andrew Cuomo ordered nursing homes not to send infected residents to hospitals.

The Biden Administration said Monday that ownership of 3,000 nursing homes has changed hands since 2016. It claimed it doesn’t have a clear picture of how many of these facilities are now owned by investment funds.

The White House also touted a report, published last month in Health Affairs, which suggested a direct connection between REIT investments in nursing homes and what the publication said was a 6% decline in registered-nurse staffing levels at the facilities in the “two to three years” after these investments were made.

A shortage of nurses that predated the pandemic has been exacerbated by thousands of overworked nurses joining the Great Resignation during the pandemic.

Mark Parkinson, AHCA president and CEO, on Monday called the administration’s efforts to pin the blame for nursing home care deficiencies on Wall Street investment firms “a red herring.” Parkinson estimated that only 5% of nursing homes currently are owned by private-equity firms.

“This has become a distraction from the real issues that impact the majority of providers, like Medicaid underfunding and workforce shortages,” Parkinson told WSJ.