Nursing Homes Often Do Not Report Private Equity Firms Among Their Owners

Incomplete Ownership Data Reflects HHS Failure to Implement Disclosure Law Passed in 2010

WASHINGTON, D.C. – The U.S Department of Health and Human Services (HHS) has failed to implement a 2010 law requiring full disclosure of nursing home ownership by private equity firms, which may be contributing to substandard care, according to a Public Citizen study released today.

In response to findings that private equity firms were slashing costs to supercharge profits and that nursing home ownership reports were incomprehensibly opaque, Congress mandated in the 2010 Affordable Care Act (ACA) that facilities provide comprehensive details of their ownership structures and that those details be made public. The law required HHS to create rules to implement the transparency provisions within two years.

But more than a decade later, after the coronavirus pandemic turned some nursing homes into virtual death traps, HHS still has not issued regulations to implement the requirements spelled out in the 2010 law. Meanwhile, findings of substandard care at private equity-owned nursing homes have continued to accumulate.

“Comprehensive ownership information is essential for effective oversight and for families to decide where to place their loved ones,” said Taylor Lincoln, a research director at Public Citizen and author of the study. “Otherwise it’s impossible to determine if a facility is owned by those who may be guilty of fraud or providing negligent care at other locations.”

Public Citizen’s study tested the comprehensiveness of ownership data currently published by the federal government, which is based on requirements that predated the ACA and that HHS enhanced without implementing formal regulations. The study looks in depth at the reports of nursing homes owned by two private equity firms and, in a more general way, at 13 nursing homes believed to be owned by private equity firms. Among the findings:

  • A private equity firm that appears to own more than 130 nursing homes and another that lists in its portfolio a nursing home chain consisting of 58 facilities do not appear anywhere in the federal government’s ownership database;
  • One of those private equity firms had one of its facilities terminated by Medicare for failing to meet basic safety requirements;
  • Among 13 private equity firms believed to possess substantial holdings in U.S. nursing homes, only seven appear at all in the federal ownership database, and many of those appear to be grossly incomplete; and
  • Diagrams showing the relationships between each nursing home’s owners, which the ACA required HHS to collect and disclose, have not been made public.

The Biden administration promised in February to take several steps to improve the quality and safety of nursing home care, including implementing the disclosure requirements in the ACA. But the administration does not appear to have begun creating a regulation to do so.

Public Citizen recommends that the administration begin work on that regulation. In the meantime, the administration should increase public disclosure of the ownership information that is currently collected, and it should issue notices to nursing homes demanding that they improve the quality of their disclosure in line with instructions the department has laid out for the ownership reporting form.