Attorneys General Call for Required Disclosure of Nursing Home Ownership and Management to Address Growth of Private Equity and Real Estate Firms in Industry
New York Attorney General Letitia James co-led a coalition of 18 attorneys general and the Inspector General of the District of Columbia in support of a proposed rule by the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) that would require the disclosure of certain ownership, managerial, and other information regarding nursing facilities, particularly from private equity investors and real estate investment trusts. This letter follows Attorney General James’ recent actions to address problems in nursing homes and protect vulnerable New Yorkers.
The letter supports a proposal by CMS to require nursing facilities and their owners to disclose the true decision makers exercising control over nursing facilities’ operations. The coalition contends that such disclosure would improve the ability of attorneys general and their Medicaid Fraud Control Units (MFCUs) to hold bad actors accountable for providing substandard care in nursing facilities.
“We trust nursing homes to protect our state’s most vulnerable communities and to provide them with the quality care they deserve,” said Attorney General James. “Transparency and accountability with regard to who is managing these facilities and the services they provide are vital to our ability to protect residents. The health and safety of New Yorkers remains our top priority, and as part of our ongoing efforts to monitor nursing homes to keep people safe, we will continue to take every measure to hold those who cause harm accountable.”
Attorneys general are charged with protecting the safety and well-being of residents of nursing facilities. Their offices, through MFCUs or other units, have authority to investigate and prosecute those responsible for committing abuse or neglect of residents and misappropriation of residents’ funds in these facilities.
As the COVID-19 pandemic and its aftermath exposed, many nursing facilities continue to deliver substandard care to their residents. More than 200,000 nursing facility residents and staff died due to COVID-19 since the start of the pandemic, accounting for at least 23 percent of all COVID-19 deaths in the U.S. Recent analyses have found that, for every two victims of COVID-19 in nursing facilities, there was another resident who died prematurely of other causes. The coalition of attorneys general assert that these tragic outcomes are too often reflective of facilities that are chronically understaffed resulting in the failure to provide basic support to residents, including hygiene, wound care, feeding, and hydration.
In their letter, the attorneys general note that the quality of care delivered by nursing facilities operated on a for-profit basis, particularly when those for-profit owners and/or operators include private equity investors, is often worse than at non-profit nursing facilities. A recent study found that nursing facilities with private equity ownership had increases of short-term mortality by 10 percent; this study also found worsening mobility of residents, declines in nurse availability per resident, and elevated use of antipsychotic medications in nursing facilities owned by private equity.
The attorneys general’s letter further emphasizes that corporate owners and operators, including but not limited to private equity investors and real estate investment trusts, continue to structure acquisitions of nursing facilities to avoid disclosing to CMS the extent of their ownership or involvement in the facilities’ operations. This lack of transparency hampers and delays law enforcement efforts from identifying the true decision makers at nursing facilities — who may be responsible for the root causes of substandard care.
This action is the latest in Attorney General James’ efforts to protect nursing home residents throughout the state. In February, Attorney General James secured more than $7.1 million from the Saratoga Center for Rehabilitation and Skilled Nursing Care, a former nursing home in Ballston Spa, and its owners and operators for years of fraud and resident neglect. In November and December 2022, Attorney General James filed special proceedings against three nursing facilities and their owners due to findings of repeated and persistent fraud and illegality, including resident neglect, illegal conversion of government funds, and false and misleading representations to the New York State Department of Health. These facilities included: The Villages of Orleans Health and Rehabilitation Center in Orleans County, Fulton Commons Care Center in Nassau County, and Cold Spring Hills Center for Nursing and Rehabilitation in Nassau County. In January 2021, Attorney General James released a report revealing that many nursing homes were ill-equipped and ill-prepared to deal with the pandemic crisis because of poor staffing levels, which resulted in a lack of compliance with infection control protocols and increased risk to residents.
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