Proposed Rule2023-02993
Medicare and Medicaid Programs; Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities
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Published
February 15, 2023
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This proposed rule would implement portions of section 6101 of the Patient Protection and Affordable Care Act (Affordable Care Act), which require the disclosure of certain ownership, managerial, and other information regarding Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities.
Full Text
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<title>Federal Register, Volume 88 Issue 31 (Wednesday, February 15, 2023)</title>
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[Federal Register Volume 88, Number 31 (Wednesday, February 15, 2023)]
[Proposed Rules]
[Pages 9820-9830]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-02993]
[[Page 9820]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 424 and 455
[CMS-6084-P]
RIN 0938-AU90
Medicare and Medicaid Programs; Disclosures of Ownership and
Additional Disclosable Parties Information for Skilled Nursing
Facilities and Nursing Facilities
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement portions of section 6101 of
the Patient Protection and Affordable Care Act (Affordable Care Act),
which require the disclosure of certain ownership, managerial, and
other information regarding Medicare skilled nursing facilities (SNFs)
and Medicaid nursing facilities.
DATES: Comment period: To be assured consideration, comments must be
received at one of the addresses provided below, by April 14, 2023.
ADDRESSES: In commenting, please refer to file code CMS-6084-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-6084-P, P.O. Box 8010,
Baltimore, MD 21244-1810.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-6084-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Frank Whelan, (410) 786-1302 or via
email at <a href="/cdn-cgi/l/email-protection#16506477787d38417e737a777856757b65387e7e6538717960"><span class="__cf_email__" data-cfemail="aee8dccfc0c580f9c6cbc2cfc0eecdc3dd80c6c6dd80c9c1d8">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the search instructions on that website to
view public comments. CMS will not post on <a href="http://Regulations.gov">Regulations.gov</a> public
comments that make threats to individuals or institutions or suggest
that the individual will take actions to harm the individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
I. Executive Summary and Background
A. Executive Summary
1. Purpose
Section 6101(a) of the Affordable Care Act (Pub. L. 111-148) added
a new section 1124(c) to the Social Security Act (the Act). This
provision established requirements for the disclosure of information
about the owners and operators of Medicare SNFs and Medicaid nursing
facilities. (Except as otherwise indicated, these Medicare and Medicaid
providers will be collectively referenced as ``nursing facilities,''
``nursing homes,'' or simply ``facilities''.)
We included provisions to implement section 1124(c) of the Act as
part of the May 6, 2011 proposed rule titled ``Prospective Payment
System and Consolidated Billing for Skilled Nursing Facilities;
Disclosures of Ownership and Additional Disclosable Parties
Information'' (76 FR 26364). We did not finalize these proposed
disclosure provisions in the subsequent final rule, published on August
8, 2011,\1\ due to the need for more time to consider the comments
received, though we stated that we would address our provisions in a
separate final rule in early 2012. After reviewing the comments, we did
not publish a final rule or finalize our proposals.
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\1\ ``Prospective Payment System and Consolidated Billing for
Skilled Nursing Facilities for FY 2012; Final Rule'' (76 FR 48485).
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As explained in detail in the present proposed rule, however, we
have recently received information regarding particular categories of
nursing facility owners (including, but not limited to, private equity
companies and real estate investment trusts) that has generated
concerns about the standard of care that nursing facility residents
receive. To help ensure that CMS has sufficient data on these owners
and can thus better monitor and hold accountable their nursing
facilities, we are again proposing to implement section 1124(c) of the
Act, albeit with isolated exceptions as explained in section II.C. of
this proposed rule.
2. Summary of the Major Provisions
There are three principal categories of provisions in this proposed
rule.
a. Data To Be Reported
We are proposing that nursing facilities would be required to
disclose the following information to CMS or, for Medicaid nursing
facilities, the applicable state Medicaid agency:
<bullet> Each member of the governing body of the facility,
including the name, title, and period of service of each member.
<bullet> Each person or entity who is an officer, director, member,
partner, trustee, or managing employee of the facility, including the
name, title, and period of service of each such person or entity.
<bullet> Each person or entity who is an additional disclosable
party of the facility.
<bullet> The organizational structure of each additional
disclosable party of the facility and a description of the relationship
of each such additional disclosable party to the facility and to one
another.
To the extent that a Medicare SNF must already report some of this
data via the Form CMS-855A provider enrollment application (Medicare
Enrollment Application--Institutional Providers; Office of Management
and Budget (OMB) Control No.: 0938-0685), we are proposing that the SNF
need not report the same data required under section 1124(c) of Act
more than once on the same application submission. (States would have
the option of adopting a similar policy with respect to the required
Medicaid nursing facility data.) We believe this would help prevent
unnecessary burden on the facility.
We also intend to make the information provided per section 1124(c)
of the Act publicly available as required under section 6101(b) of the
Affordable Care Act.
b. Timing of Reporting
We are proposing that the nursing facility would have to report the
[[Page 9821]]
aforementioned information upon initially enrolling in Medicare or
Medicaid and when revalidating their Medicare or Medicaid enrollment.
Moreover, a Medicare SNF, once enrolled, would be required to disclose
any changes to this information within the current timeframes specified
in Sec. 424.516(e) for reporting changes in enrollment data.
Consistent with 42 CFR 424.515, SNFs are required to revalidate
their Medicare enrollment every 5 years. However, CMS under Sec.
424.515(d) can perform off-cycle revalidations; that is, we can
revalidate a provider or supplier at any time and need not wait until
the arrival of their 5-year revalidation cycle. Should this proposed
rule be finalized, CMS would accordingly reserve the right to conduct
off-cycle revalidations of SNFs to collect the data required under
section 1124(c) of the Act.
c. Definitions
To explain some of the terminology associated with these reporting
requirements, we are also proposing several new definitions. These
include, but are not limited to, private equity company, real estate
investment trust, additional disclosable party, and organizational
structure.
d. Effective Date
If finalized, the rule would become effective 60 days after the
date the final rule is published in the Federal Register. However,
Medicare SNFs would not have to disclose the data required under
section 1124(c) of the Act until the Form CMS-855A is revised (a
process CMS would seek to undertake promptly upon the publication of
any final rule) to collect this data and is publicly available for use.
For Medicaid nursing facilities, the required data would not have to be
reported until the applicable State Medicaid agency has established the
means to collect it.
3. Summary of Costs and Benefits
Sections III. and IV. of this proposed rule outline the impacts
that our proposals would have on affected entities and beneficiaries.
The principal impact would involve the disclosure of the required data
by nursing facilities. As explained in section IV. of this proposed
rule, we project a total annual information collection burden on
Medicare and Medicaid nursing facilities in reporting this data of
18,912 hours at a cost of $1,733,096.
We have determined that this proposed rule is not economically
significant. See section IV. of this proposed rule for a detailed
discussion.
B. Legislative and Regulatory Authority
There are three principal categories of legal authorities for our
proposals:
<bullet> Section 1124(c) of the Act requires Medicare and Medicaid
nursing facilities to disclose certain information about their
ownership and management.
<bullet> Section 1866(j) of the Act furnishes specific authority
regarding the enrollment process for providers and suppliers.
<bullet> Sections 1102 and 1871 of the Act provide general
authority for the Secretary to prescribe regulations for the efficient
administration of the Medicare program.
C. Overview of Provider Enrollment
1. Medicare
Section 1866(j)(1)(A) of the Act requires the Secretary to
establish a process for the enrollment of providers and suppliers into
the Medicare program. The overarching purpose of the enrollment process
is to confirm that providers and suppliers seeking to bill Medicare for
services and items furnished to Medicare beneficiaries meet all
applicable Federal and State requirements to do so. The process is, to
an extent, a ``gatekeeper'' that prevents unqualified and potentially
fraudulent individuals and entities from entering and inappropriately
billing Medicare. Since 2006, we have undertaken rulemaking efforts to
outline our enrollment procedures. These regulations are generally
codified in 42 CFR part 424, subpart P (hereafter occasionally
referenced as simply ``subpart P''). They address, among other things,
requirements that providers and suppliers must meet to obtain and
maintain Medicare billing privileges.
As outlined in Sec. 424.510, one such requirement is that the
provider or supplier complete, sign, and submit to its assigned
Medicare Administrative Contractor (MAC) the appropriate enrollment
form, typically the Form CMS-855 (OMB Control No. 0938-0685). The Form
CMS-855 collects important information about the provider or supplier.
Such data includes, but is not limited to, general identifying
information (for example, legal business name), licensure and/or
certification data, and practice locations. The application is used for
a variety of provider enrollment transactions, including the following:
<bullet> Initial enrollment--The provider or supplier is--(1)
enrolling in Medicare for the first time; (2) enrolling in another
Medicare contractor's jurisdiction; or (3) seeking to enroll in
Medicare after having previously been enrolled.
<bullet> Change of ownership--The provider or supplier is reporting
a change in its ownership.
<bullet> Revalidation--The provider or supplier is revalidating its
Medicare enrollment information in accordance with Sec. 424.515.
<bullet> Reactivation--The provider or supplier is seeking to
reactivate its Medicare billing privileges after it was deactivated in
accordance with Sec. 424.540.
<bullet> Change of information--The provider or supplier is
reporting a change in its existing enrollment information in accordance
with Sec. 424.516.
After receiving the provider's or supplier's initial enrollment
application, CMS or the MAC reviews and confirms the information
thereon and determines whether the provider or supplier meets all
applicable Medicare requirements. We believe this screening process has
greatly assisted CMS in executing its responsibility to prevent
Medicare fraud, waste, and abuse.
As previously mentioned, over the years we have issued various
final rules pertaining to provider enrollment. These rules were
intended not only to clarify or strengthen certain components of the
enrollment process but also to enable us to take further action against
providers and suppliers: (1) engaging (or potentially engaging) in
fraudulent or abusive behavior; (2) presenting a risk of harm to
Medicare beneficiaries or the Medicare Trust Funds; or (3) that are
otherwise unqualified to furnish Medicare services or items.
2. Medicaid
States have considerable flexibility in how they administer their
Medicaid programs within a broad Federal framework, and programs vary
from state to state. In operating Medicaid, states historically have
permitted the enrollment of providers who meet the state requirements
for program enrollment as well as any applicable Federal requirements.
State enrollment requirements must be consistent with section
1902(a)(23) of the Act and implementing regulations at Sec. 431.51.
Part 455 of title 42 includes Federal Medicaid provider enrollment
requirements to which states must adhere. These include, but are not
limited to, the following:
<bullet> Requiring providers to disclose information regarding
ownership, business transactions, certain criminal convictions, and
affiliations (Sec. Sec. 455.104 through 455.107).
<bullet> Screening providers consistent with the procedures in part
455, subpart E (Sec. 455.410).
[[Page 9822]]
<bullet> Revalidating a provider's enrollment at least every 5
years (Sec. 455.414).
<bullet> Performing site visits and criminal background checks in
certain circumstances (Sec. Sec. 455.432 and 455.434).
Although required to comply with the foregoing Federal
requirements, states have the discretion to, for instance: (1)
undertake stricter screening of providers; and (2) require providers to
submit data beyond that identified in Sec. Sec. 455.104 through
455.107. Except as otherwise noted therein, the provisions in 42 CFR
part 455 are thus the minimum requirements for states, not the maximum.
II. Provisions of the Proposed Regulations
A. Background
1. Statutory and Regulatory History
Section 6101(a) of the Affordable Care Act added a new section
1124(c) to the Act. It established requirements for the disclosure of
information about nursing facility ownership and oversight. Under
section 1124(c)(2)(A)(ii) of the Act, a nursing facility enrolling or
enrolled in Medicare or Medicaid must disclose--
<bullet> The name, title, and period of service of each member of
the facility's governing body;
<bullet> The name, title, and period of service of each person or
entity who is an officer, director, member, partner, trustee, or
managing employee of the facility; and
<bullet> Each person or entity who is an additional disclosable
party of the facility.
Section 1124(c)(5)(A) of the Act defines ``additional disclosable
party'' as a person or entity that--
<bullet> Exercises operational, financial, or managerial control
over the facility or a part thereof, or provides policies or procedures
for any of the facility's operations, or provides financial or cash
management services to the facility;
<bullet> Leases or subleases real property to the facility, or owns
a whole or part interest equal to or exceeding 5 percent of the total
value of such real property; or
<bullet> Provides management or administrative services, management
or clinical consulting services, or accounting or financial services to
the facility.
In addition, section 1124(c)(2)(A)(iii) of the Act requires the
nursing facility to disclose: (1) the organizational structure (as
defined in section 1124(c)(5)(D) of the Act) of each additional
disclosable party of the facility; and (2) a description of the
relationship of each such additional disclosable party to the facility
and to one another.
As noted previously, we proposed regulations to implement section
1124(c) of the Act as part of a proposed rule published on May 6, 2011.
We also proposed therein several regulatory definitions of section
1124(c)'s terminology to help nursing facilities understand what must
be reported. We did not finalize our proposed provisions in the
subsequent August 8, 2011 final rule because we needed more time to
consider the comments received, though we stated that we would address
our provisions in a separate final rule in early 2012. After reviewing
the comments, we decided not to publish a final rule or to finalize our
proposals.
2. Concerns About Nursing Facility Ownership
CMS's concerns about the quality of care and operations of nursing
facilities, including (though by no means exclusively) those owned by
private equity and other types of investment firms, have increased
since 2011. As of 2021, roughly 70 percent of nursing homes were for-
profit facilities; this includes those owned by private equity
companies, which comprised approximately 11 percent of all nursing
homes (although estimates vary).\2\ Reports have circulated that
nursing facility quality has declined under private equity and similar
owners. For instance, in February 2021 the National Bureau of Economic
Research (NBER) published an analysis titled ``Does Private Equity
Investment in Healthcare Benefit Patients? Evidence from Nursing
Homes.'' The report stated: ``Our estimates show that private equity
(PE) ownership increases the short-term mortality of Medicare patients
by 10%, implying 20,150 lives lost due to PE ownership over our twelve-
year sample period. This is accompanied by declines in other measures
of patient well-being, such as lower mobility, while taxpayer spending
per patient episode increases by 11%.'' \3\ A November 2021 analysis
published in the Journal of the American Medical Association contained
similar findings concerning private equity-owned nursing facilities.
Titled ``Association of Private Equity Investment in US Nursing Homes
with the Quality and Cost of Care for Long-Stay Residents,'' the report
stated that private equity companies seek annual returns of 20% or
more; with this pressure to generate high short-term profits, private-
equity-owned nursing homes might reduce staffing, services, supplies,
or equipment, which could adversely affect quality of care.\4\ The
analysis concluded that: (1) private equity acquisition of nursing
facilities was associated with higher costs and increases in emergency
department visits and hospitalizations for ambulatory sensitive
conditions; and (2) per the study's findings, more stringent oversight
and reporting on private equity ownership of nursing homes may be
warranted.\5\
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\2\ Medicare Payment Advisory Commission, ``Congressional
Request: Private Equity and Medicare,'' June 2021.
jun21_ch3_medpac_report_to_congress_sec.pdf.
\3\ Atul Gupta, Sabrina T. Howell, Constantine Yannelis, and
Abhinav Gupta, Does Private Equity Investment in Healthcare Benefit
Patients? Evidence from Nursing Homes, 2021, p. i.
\4\ Robert Tyler Braun, Hye-Young Jung, Lawrence Casalino, et
al., JAMA Health Forum, November 19, 2021.
\5\ Ibid.
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The Biden-Harris Administration's concerns about nursing facility
quality of care and private equity-ownership led to its announcement on
February 28, 2022, of a series of initiatives designed to improve care
and accountability at such facilities. In its fact sheet titled
``Protecting Seniors by Improving Safety and Quality of Care in the
Nation's Nursing Homes,'' the White House stated that ``(f)or too long,
corporate owners and operators have not been held to account for poor
nursing home performance.'' \6\ The fact sheet also stated that CMS
would ``implement Affordable Care Act requirements regarding
transparency in corporate ownership of'' nursing facilities, including
the ``collect[ion] and public reporting [of] more robust corporate
ownership and operating data.'' \7\
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\6\ <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/">https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/</a>.
\7\ Ibid.
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We stress that the above-mentioned concerns about nursing home
ownership are not limited to private equity companies. Other types of
private ownership, such as real estate investment trusts (REITs), have
generated similar concerns; indeed, REITs, in addition to private
equity companies and other investment ownership structures, were
specifically referenced in the February 28, 2022 White House fact
sheet.
We note that Government oversight bodies, too, have studied the
issue of nursing facility quality across the board, regardless of the
precise type of ownership involved. The Government Accountability
Office (GAO) published an analysis on January 14, 2022 titled ``Health
Care Capsule: Improving Nursing Home Quality and Information''
[[Page 9823]]
(GAO-22-105422). This document summarized past GAO reports that
expressed continued concern about the level of care that SNF
beneficiaries receive. Problems that the GAO cited in this analysis and
in prior studies (based in part on CMS statistics regarding nursing
facility deficiencies) included infection prevention and control,
ensuring that the nursing home environment is free from accidents, and
food safety.\8\ In a September 2020 report titled ``National Background
Check Program for Long-Term Care Providers: Assessment of State
Programs Concluded in 2019'' (OEI-07-20-00180), the U.S. Department of
Health & Human Services Office of Inspector General (OIG) noted that
patient abuse, patient neglect, and misappropriation of property have
been identified as widespread problems harming beneficiaries receiving
long-term care. Of particular significance was the OIG's statement
that, per various studies, some nurse aides who were convicted of
abuse, neglect, or theft had previous criminal convictions that could
have been found through background checks.\9\ The OIG added that such
background checks can help protect long-term care beneficiaries.\10\
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\8\ GAO-22-105422, p. 1.
\9\ OEI-07-20-00180, p. 1.
\10\ Ibid.
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These two reports further emphasize the importance of CMS' efforts
to: (1) improve the quality of care provided in nursing facilities; and
(2) facilitate greater transparency regarding nursing facilities'
owners and operators, whether they be private equity companies, REITs,
or otherwise. We believe nursing home owners and operators are in a
position to address some of the problems referenced in the
aforementioned analyses and reports and make operational improvements.
Knowing who these parties are through their disclosures on the Form
CMS-855A and to States would: (1) provide additional transparency that
may assist CMS and other regulators in holding nursing facilities
accountable; and (2) allow consumers to select facilities with better
knowledge of their owners and operators.
3. Implementation of Section 1124(c) of the Act
Given all of the foregoing, we propose to implement section 1124(c)
of the Act consistent with the statutory mandate. Although, as
previously stated, CMS did not finalize its 2011 proposal to implement
section 1124(c) of the Act, there are several important differences
between 2011 and now.
First, and as already noted, reports linking certain types of
ownership with a decline in nursing facility quality of care have
become more frequent, definitive, and alarming. As the White House
indicated in its February 28, 2022 announcement, this increases the
urgency to take wide-ranging measures to address this problem.
Second, our enhancements to the Provider Enrollment, Chain, and
Ownership System (PECOS) over the years have made the enrollment
process easier and faster for SNFs than was the case in 2011. We
believe this would help reduce the operational burden of reporting the
requested data.
Third, and as explained further in section II.B. of this proposed
rule, our intended revisions to the Form CMS-855A to collect the
section 1124(c) data would be structured so that SNFs would not have to
disclose this same information twice on the same application
submission. That is, ownership and managerial data that must already be
reported as part of the enrollment process would not need to be
disclosed a second time on the same Form CMS-855A submission if it
duplicates the information required under section 1124(c) of the Act.
This would further alleviate the burden on nursing facilities.
Fourth, and unlike in 2011, the implementation of section 1124(c)
of the Act would not be a comparatively isolated or stand-alone means
of addressing nursing home ownership. Indeed, the Administration has
implemented or plans to implement initiatives to strengthen its
oversight of SNFs. To illustrate, CMS finalized several changes to
Sec. 424.518 in the 2023 Physician Fee Schedule final rule (CMS-1770-
F), one of which requires 5 percent or greater owners of SNFs to submit
fingerprints and be subject to an FBI criminal background check for
certain provider enrollment transactions, such as initial enrollment
and revalidation.\11\ This is based on our concerns about criminal
activity involving nursing facility operators and overseers.
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\11\ ``Medicare and Medicaid Programs; CY 2023 Payment Policies
Under the Physician Fee Schedule and Other Changes to Part B Payment
and Coverage Policies; Medicare Shared Savings Program Requirements;
Implementing Requirements for Manufacturers of Certain Single-dose
Container or Single-use Package Drugs To Provide Refunds With
Respect to Discarded Amounts; and COVID-19 Interim Final Rules'' (87
FR 69404), published in the Federal Register on November 18, 2022.
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With these changed circumstances and the pressing need to address
the aforementioned issues, section II.B. of this proposed rule outlines
our proposed provisions. These largely mirror what we proposed in the
May 6, 2011 proposed rule and, except as otherwise specified, affect
both the Medicare and Medicaid programs.
B. Proposed Provisions
1. Medicare
a. Update to Sec. 424.516
We would add new paragraph (g)(1) to Sec. 424.516 outlining the
following information to be reported as part of a SNF's Form CMS-855A
initial enrollment or revalidation application. These data elements
would be designated as paragraphs (g)(1)(i) through (iv), respectively,
and would be in addition to (and not in lieu of) all other reporting
requirements in subpart P:
<bullet> Each member of the governing body of the facility,
including the name, title, and period of service of each such member.
<bullet> Each person or entity who is an officer, director, member,
partner, trustee, or managing employee of the facility, including the
name, title, and period of service of each such person or entity.
<bullet> Each person or entity who is an additional disclosable
party of the facility.
<bullet> The organizational structure of each additional
disclosable party of the facility and a description of the relationship
of each such additional disclosable party to the facility and to one
another.
(We would clarify in the introductory paragraph of (g)(1) that
initial applications include, strictly for purposes of paragraph (g)'s
applicability, changes of ownership under 42 CFR 489.18. This means
that the SNF's new owner, like an initially enrolling SNF, would have
to disclose on its Form CMS-855A the data required per Sec.
424.516(g). This would assist in ensuring that CMS has sufficient data
on the facility's new ownership and operators.)
The four data elements in paragraphs (g)(1)(i) through (iv) are
identical to those in section 1124(c)(2)(A)(ii) and (iii) of the Act.
Also, and as mentioned previously, much of this information is already
captured on the Form CMS-855A application. To avoid duplicate reporting
and thus ease the burden on SNFs, we propose in paragraph (g)(2) that
the data in paragraphs (g)(1)(i) through (iv) need not be disclosed
more than once on the same application submission. To illustrate, and
consistent with sections 1124(a) and 1124A of the Act, an
organizational provider or supplier (including a SNF) must currently
report in Section 5 of the Form
[[Page 9824]]
CMS-855A all entities with a partnership interest in the provider or
supplier and, in Section 6, all of the provider's or supplier's
managing employees. While proposed paragraph (g)(1)(ii) also would
require SNFs to disclose this data, the SNF would not have to report it
twice on the same Form CMS-855A submission: once per sections 1124(a)
and 1124A of the Act and again per section 1124(c) of the Act.
New paragraph (g)(3) would state that the SNF must report any
change to any of the information described in paragraphs (g)(1)(i)
through (iv) within the current timeframes in Sec. 424.516(e) for
reporting changes in enrollment data--specifically, 30 days for changes
in ownership or control and 90 days for all other changes. This is to
ensure that CMS has accurate and updated information on the SNF.
b. Definitions
To clarify some of the terminology used in Sec. 424.516(g)(1), we
propose to add several definitions to Sec. 424.502.
First, we propose to define ``additional disclosable party'' as
meaning (with respect to a skilled nursing facility defined at section
1819(a) of the Act) any person or entity who: (1) exercises
operational, financial, or managerial control over the facility or a
part thereof, or provides policies or procedures for any of the
operations of the facility, or provides financial or cash management
services to the facility; (2) leases or subleases real property to the
facility, or owns a whole or part interest equal to or exceeding 5
percent of the total value of such real property; or (3) provides
management or administrative services, management or clinical
consulting services, or accounting or financial services to the
facility. This duplicates the definition of the same term in section
1124(c)(5)(A) of the Act.
Second, Sec. 424.502 currently defines ``managing employee''
consistent with the definition of the same term in section 1126(b) of
the Act. Section 1124(c)(5)(C) of the Act, too, defines ``managing
employee,'' though only for purposes of nursing facilities under
section 1124(c) of the Act. This latter definition is slightly broader
and encompasses more individuals than section 1126(b) of the Act. Since
the two definitions are not precisely the same, we cannot use the
section 1126(b) definition for nursing facilities. Accordingly, we
propose to add to the end of Sec. 424.502's definition of ``managing
employee'' a separate definition of ``managing employee'' that mirrors
section 1124(c)(5)(C) of the Act and applies only to SNFs and the
requirements in Sec. 424.516(g). It would mean an individual
(including a general manager, business manager, administrator,
director, or consultant) who directly or indirectly manages, advises,
or supervises any element of the practices, finances, or operations of
the facility.
Third, we propose to define ``organizational structure.'' It would
mirror the definition of the same term in section 1124(c)(5)(D) of the
Act. With respect to a SNF, it would mean--
<bullet> For a corporation--The officers, directors, and
shareholders of the corporation who have an ownership interest in the
corporation which is equal to or exceeds 5 percent;
<bullet> For a limited liability company--The members and managers
of the limited liability company including, as applicable, what
percentage each member and manager has of the ownership interest in the
limited liability company;
<bullet> For a general partnership--The partners of the general
partnership;
<bullet> For a limited partnership--The general partners and any
limited partners of the limited partnership who have an ownership
interest in the limited partnership which is equal to or exceeds 10
percent;
<bullet> For a trust--The trustees of the trust;
<bullet> For an individual--Contact information for the individual.
Fourth, we intend to add data elements to the Form CMS-855A through
which owning and managing entities of SNFs would have to disclose
whether they are either a private equity company or a REIT. To assist
stakeholders in understanding the meaning of these terms for provider
enrollment purposes, we propose to add definitions thereof to Sec.
424.502. A private equity company would be defined as a publicly traded
or non-publicly traded company that collects capital investments from
individuals or entities (that is, investors) and purchases an ownership
share of a provider (for example, SNF, home health agency, etc.). We
would define a REIT as a publicly-traded or non-publicly traded company
that owns part or all of the buildings or real estate in or on which
the provider operates. We recognize that these definitions may be
modestly different from definitions of the same terms used in other
settings. We solicit comment on the propriety of our proposed
definitions and welcome any suggested revisions thereto; we
particularly seek comment on whether our proposed definition of private
equity company should include publicly-traded private equity companies.
We also welcome public feedback regarding any other types of private
ownership besides private equity companies and REITs about which CMS
should consider collecting information from SNFs as part of the
enrollment process.
As previously mentioned, SNFs would have to report the information
required under Sec. 424.516(g) upon revalidation. SNFs are required to
revalidate their Medicare enrollment every 5 years consistent with 42
CFR 424.515. Yet CMS under Sec. 424.515(d) can also perform off-cycle
revalidations; specifically, CMS can revalidate a provider or supplier
at any time and need not wait until the arrival of their 5-year
revalidation cycle. Should this proposed rule be finalized, CMS would
have the authority to conduct off-cycle revalidations of SNFs to
collect the section 1124(c) data.
2. Medicaid
We propose to revise our Medicaid enrollment provisions in 42 CFR
part 455, subpart B, to include therein regulatory provisions akin to
those we are proposing in part 424, subpart P.
In Sec. 455.101, we propose to add the same definitions of
``additional disclosable party'' and ``organizational structure'' that
we are proposing in Sec. 424.502, excluding the reference to skilled
nursing facility, a Medicare-only term; we would instead reference
nursing facilities as defined in section 1919(a) of the Act.
We also propose to revise Sec. 455.101's definition of ``managing
employee'' in two ways. First, we would clarify in the definition's
opening sentence that an individual can qualify as a managing employee:
(1) even if he or she is acting under contract or through some other
arrangement; and (2) whether or not the individual is a W-2 employee of
the institution, organization, or agency. This would better conform to
the current definition of the same term in Sec. 424.502. Second, and
similar to our proposed revision to the definition of ``managing
employee'' in Sec. 424.502, we propose to add to the end of the
definition of this term in Sec. 455.101 a separate definition of
``managing employee'' that mirrors section 1124(c)(5)(C) of the Act and
applies only to nursing facilities. It would mean an individual
(including a general manager, business manager, administrator,
director, or consultant) who directly or indirectly manages, advises,
or supervises any element of the practices, finances, or operations of
the facility.
Current Sec. 455.104 identifies certain ownership and control
information that Medicaid providers must disclose to enroll or remain
enrolled in Medicaid.
[[Page 9825]]
This information includes some of that referenced in section 1124(c) of
the Act, but Sec. 455.104 does not currently incorporate all of the
section 1124(c) of the Act data elements. To address this, we propose
several changes to Sec. 455.104.
First, existing Sec. 455.104(e) states that Federal financial
participation is not available in payments made to a disclosing entity
that fails to report required ownership or control information. We
propose to redesignate this paragraph as Sec. 455.104(f) for
organizational purposes and to establish a new Sec. 455.104(e) that
would address our proposed additional disclosure provisions.
Second, and for nursing facilities as defined in section 1919(a) of
the Act, new Sec. 455.104(e)(1)(i) through (iv) would include the same
data elements described in proposed Sec. 424.516(g)(1) through (iv).
Paragraph (e)(1) would also specify that this information must be
furnished (a) upon initial enrollment and revalidation and (b) in
addition to (and not in lieu of) all other required data disclosures in
part 455, subpart B.
Third, we propose in Sec. 455.104(e)(2) that the state need not
require the provider to report the data described in paragraph (e)(1)
more than once on the same enrollment application submission. This
provision is similar to that in proposed Sec. 424.516(g)(2) for
Medicare but with an important difference, in that Sec. 455.104(e)(2)
would be optional for states. That is, the state could, but would not
be required to, mandate the reporting of the Sec. 455.104(e)(1) data
more than once on the same application submission. As an illustration,
a particular state's enrollment application may currently require the
corporate directors of each enrolling provider (regardless of type) to
be disclosed in one section. Our proposal would permit the state either
to use this application section alone to collect such data from nursing
facilities per proposed Sec. 455.104(e)(1) or to, for example, require
nursing facilities to again submit this data on a separate application
attachment exclusive to nursing facilities. Consistent with the general
deference we have long afforded states regarding the operation of their
Medicaid provider enrollment programs, we do not seek to overly
restrict the logistical means by which states collect the information
in question.
In a similar vein regarding state deference, we are not proposing
that states require nursing homes to report changes to their existing
section 1124(c) information within certain timeframes. However, we
believe it is critical that states have accurate and updated
information regarding nursing facilities' owners and operations. We
therefore encourage states to establish reporting requirements
regarding changes in the data required under section 1124(c) of the
Act, including when the provider changes its ownership. Likewise, we
suggest (but are not proposing) that states collect data signifying
whether a particular organization reported under section 1124(c) of the
Act is a private equity company or REIT.
C. Additional Related Proposed Provisions
1. Public Posting of Data
Section 6101(b) of the Affordable Care Act states that no later
than 1 year after final regulations promulgated under section
1124(c)(3)(A) of the Act are published in the Federal Register, the
Secretary shall make the information reported per such regulations
available to the public. Consistent with section 6101(b) of Affordable
Care Act, we intend to make data reported in accordance with section
1124(c) of the Act publicly available within 1 year after this rule, if
finalized, is published in the Federal Register. We would consider
making this data available on <a href="http://data.cms.gov">data.cms.gov</a>. Further information
regarding the format and scope of the published information would be
provided via future sub-regulatory guidance.
2. Section 1124(c)(3)(A) of the Act
Section 1124(c)(3)(A) of the Act states, in part, that regulations
implementing the reporting requirements of section 1124(c) of the Act
must also require that the facility certifies (as a condition of
participation and payment under Medicare and Medicaid) that the
information the facility reports ``is, to the best of the facility's
knowledge, accurate and current.'' Under our current Medicare
regulations at Sec. 424.510(d)(3), an authorized official or delegated
official (as those terms are defined in Sec. 424.502) must sign the
Form CMS-855A on behalf of the provider. In signing the application,
the official attests to the following: ``By my signature, I certify
that the information contained herein is true, correct, and complete,
and I authorize the Medicare fee-for-service contractor to verify this
information. If I become aware that any information in this application
is not true, correct, or complete, I agree to notify the Medicare fee-
for-service contractor of this fact in accordance with the timeframes
established in 42 CFR 424.516(e).'' This ``true, correct, and
complete'' standard has been part of Medicare provider enrollment
applications for many years, and we believe its lack of associated
qualifying language (such as ``to the best of my knowledge'') has
helped ensure that the provider and its signatory fully understand the
need to submit accurate data.
We are concerned that implementation of section 1124(c)(3)(A) of
the Act would result in two knowledge standards for the Form CMS-855A.
Specifically, the required nursing facility information would have a
``to the best of my knowledge'' standard, whereas all other data on the
application (for instance, practice locations, final adverse actions)
would have an unqualified ``true, correct, and complete'' standard.
This could cause confusion within the nursing facility community. More
importantly, though, it might convey the impression that the provider
need not be as careful and thorough about confirming the correctness of
the nursing facility data in comparison to the rest of the
application's information. This is because the nursing facility data
would appear to invoke a lesser knowledge standard. We note that these
same issues could arise with Medicaid enrollment, since some state
Medicaid provider enrollment applications may have knowledge standards
different from that identified in section 1124(c)(3)(A) of the Act. Due
to the need to further review the potential operational implications of
section 1124(c)(3)(A) of the Act, we are not proposing to implement
this provision in this proposed rule but may consider doing so in
future rulemaking. For the time being, the certification statement
language applicable to the entire Form CMS-855A enrollment application
would apply to the information described in proposed Sec. 424.516(g).
3. Section 1124(c)(2)(B) of the Act
Section 1124(c)(2)(B) of the Act states that if a facility reports
the data described in section 1124(c)(2)(A) to another Federal agency,
the facility may provide the form on which the data was submitted (or
other such information submitted) to meet the disclosure requirements
of section 1124(c)(1) of the Act. Given the potential operational
complexities of incorporating the provisions of section 1124(c)(2)(B)
of the Act into Sec. 424.516(g) or 42 CFR part 455 when we already
have a vehicle (the Form CMS-855A) for collecting the data referenced
in section 1124(c) of the Act, we need additional time to examine this
matter. We may address section 1124(c)(2)(B) of the Act in future
rulemaking.
[[Page 9826]]
III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
<bullet> The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
<bullet> The accuracy of our estimate of the information collection
burden.
<bullet> The quality, utility, and clarity of the information to be
collected.
<bullet> Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
A. Background
As explained in section II. of this proposed rule, we are proposing
to implement most of section 1124(c) of the Act. Section 1124(c) of the
Act requires Medicare and Medicaid nursing facilities to report certain
information about their ownership and operators. This data includes,
but is not limited to: (1) members of the facility's governing body;
(2) the facility's officers, directors, members, partners, trustees,
and managing employees; (3) parties that exercise operational,
financial, or managerial control over the facility or a part thereof;
(4) parties who lease or sublease real property to the facility, or own
a whole or part interest equal to or exceeding 5 percent of the total
value of such real property; and (5) parties that furnish management or
administrative services, management or clinical consulting services, or
accounting or financial services to the facility.
B. Medicare ICR Estimates
We noted in section II. of this proposed rule that the Form CMS-
855A (OMB Control No.: 0938-0685), which SNFs must complete to enroll
in Medicare, already collects much of the aforementioned information.
Examples of this data include the SNF's owners, managing employees,
corporate officers, corporate directors, and other parties. As part of
the enrollment process, the SNF is also currently required to submit:
(1) an organizational diagram identifying all of the owning and
managing entities listed on the Form CMS-855A and their relationships
with the provider and with each other; and (2) a diagram identifying
the organizational structures of all of the SNF's owners. Nonetheless,
certain data is not collected on the existing Form CMS-855A, such as
parties that perform administrative, financial, or clinical consulting
services and do not qualify as another person or entity that is
otherwise required to be reported on the application (for example, a
managing employee or owner). Disclosure of this heretofore non-
mandatory information (hereafter referenced as ``supplemental data'')
would constitute additional ICR burden to the SNF community.
There would be three principal types of Form CMS-855A transactions
via which SNFs would report supplemental data: (1) applications to
initially enroll in Medicare (which, for purposes of the reporting
requirements in proposed Sec. 424.516(g), would include changes of
ownership under 42 CFR 489.18); (2) applications to revalidate the
SNF's current enrollment information per Sec. 424.515; and (3)
reporting changes to any of the SNF's previously disclosed supplemental
data per proposed Sec. 424.516(g).
Form CMS-855A applications are typically completed by the
provider's office staff. However, given the potential complexity of the
supplemental data to be reported, it is possible that the SNF's legal
counsel would be involved in reviewing this information. Accordingly,
we will use the following categories and hourly wage rates from the
U.S. Bureau of Labor Statistics' (BLS) May 2021 National Occupational
Employment and Wage Estimates for all salary estimates (<a href="https://www.bls.gov/oes/current/oes_nat.htm">https://www.bls.gov/oes/current/oes_nat.htm</a>):
Table 1--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Fringe
Occupation Mean hourly benefits and Adjusted
Occupation title code wage ($/hr) overhead ($/ hourly wage ($/
hr) hr)
----------------------------------------------------------------------------------------------------------------
Office and Administrative Support Workers, All 43-9199 20.47 20.47 40.94
Other..........................................
Lawyers......................................... 23-1011 71.17 71.17 142.34
----------------------------------------------------------------------------------------------------------------
Based on our internal data, we estimate that each year
approximately: (1) 1,055 SNFs would submit an initial Form CMS-855A
enrollment application (excluding Form CMS-855A change of ownership
applications under Sec. 489.18); (2) 1,672 would submit a Form CMS-
855A revalidation application; (3) 951 would submit a Form CMS-855A
change of ownership application; and (4) 4,500 would report new or
changed supplemental data via a Form CMS-855A change of information
application. Furthermore, we project that it would take the SNF an
average of 2.25 hours to furnish the supplemental data for initial,
revalidation, and change of ownership applications and 1 hour for
changes of information. (We recognize that the actual time for a
particular SNF may be more or less than these figures.) Of these hour
estimates, we project that the burden would be split evenly between the
SNF's administrative staff and legal counsel (for example, 1.125 hours
each for initial and revalidation applications). With this equal
division, the per hour wage would be $91.64 (($40.94 + $142.34)/2.) As
outlined in more detail in Table 2, this results in a projected annual
ICR burden of our proposed Medicare SNF disclosure provisions of 12,776
hours at a cost of $1,170,793.
C. Medicaid ICR Estimates
We mentioned in section II. of this proposed rule that states have
considerable discretion in the operational aspects of their Medicaid
provider enrollment programs. Concerning our proposed requirements
regarding nursing home data, some states may already collect all of
this information, the majority of it, or only a modest portion of it.
This means that the number of projected initial and revalidation
applications reporting this information, as well as the time it takes
the facility to disclose the data, would likely vary from state to
state. Furthermore, we do not have readily available information on the
number of
[[Page 9827]]
Medicaid nursing facility initial and revalidation applications that
are submitted to each state each year. However, notwithstanding these
uncertainties, we believe that reasonable estimates of the hour and
cost burdens are possible.
The number of Medicaid-enrolled nursing facilities nationwide is
comparable to that for Medicare-enrolled SNFs: roughly between 15,000
and 15,500. In light of this, we believe the Medicare application
estimates we used in section III.B. of the proposed rule for initial
and revalidation applications can--strictly for purposes of outlining a
projection on which stakeholders can submit comments--be used for our
proposed Medicaid provisions. Consequently, and as indicated in Table
2, we estimate an annual ICR burden for these provisions of 6,136 hours
and $562,303, though, again, we seek public comments on the accuracy of
this projection.
D. Total
Given the foregoing, and as outlined in the table below, we project
an annual total ICR burden associated with our proposed provisions of
18,912 hours and $1,733,096.
Table 2--Hour and Burden Estimates for Nursing Home Disclosure Provisions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly labor
cost of
OMB control Number of Number of Burden per Total annual reporting ($)
No. respondents responses response burden (hours) (includes 100% Total cost ($)
(hours) fringe
benefits) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Medicare
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial Form CMS-855A Applications...... 0938-0685 1,055 1,055 2.25 2,374 91.64 217,553
Form CMS-855A Revalidation Applications. 0938-0685 1,672 1,672 2.25 3,762 91.64 344,750
Form CMS-855A Change of Ownership 0938-0685 951 951 2.25 2,140 91.64 196,110
Applications...........................
Form CMS-855A Change of Information 0938-0685 4,500 4,500 1 4,500 91.64 412,380
Applications...........................
---------------------------------------------------------------------------------------------------------------
Medicare Totals..................... N/A 8,178 8,178 N/A 12,776 N/A 1,170,793
--------------------------------------------------------------------------------------------------------------------------------------------------------
Medicaid
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial Application..................... N/A 1,055 1,055 2.25 2,374 91.64 217,553
Revalidation Application................ N/A 1,672 1,672 2.25 3,762 91.64 344,750
---------------------------------------------------------------------------------------------------------------
Medicaid Totals..................... N/A 2,727 2,727 N/A 6,136 N/A 562,303
---------------------------------------------------------------------------------------------------------------
Totals.......................... N/A 10,905 10,905 N/A 18,912 N/A 1,733,096
--------------------------------------------------------------------------------------------------------------------------------------------------------
If you comment on these information collection requirements (that
is, reporting, recordkeeping or third-party disclosure requirements),
please submit your comments electronically as specified in the
ADDRESSES section of this proposed rule.
Comments must be received on/by April 14, 2023.
IV. Regulatory Impact Analysis
A. Statement of Need
This proposed rule is necessary so that CMS and states can obtain
important data about the owners and operators of nursing facilities.
This would better enable CMS and states to monitor the ownership and
management of these providers; this is an especially critical
consideration given documented quality issues and differences in
outcomes in nursing facilities with certain types of owners, such as
private equity firms. Our proposal would also serve as an important
component of the Biden-Harris Administration's initiative to improve
the safety, quality, and accountability of nursing homes.\12\
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\12\ <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/">https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/</a>.
---------------------------------------------------------------------------
B. Overall Impact of Provisions of This Proposed Rule
1. Background
We have examined the impacts of this proposed rule, as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995, Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999), and the Congressional Review Act (5 U.S.C. 804(2)). This section
of this proposed rule contains the impact and other economic analyses
for our proposed provisions.
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition,
[[Page 9828]]
jobs, the environment, public health or safety, or State, local or
tribal governments or communities (also referred to as ``economically
significant''); (2) creating a serious inconsistency or otherwise
interfering with an action taken or planned by another agency; (3)
materially altering the budgetary impacts of entitlement grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raising novel legal or policy issues arising out of
legal mandates, the President's priorities, or the principles set forth
in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory actions and/or with economically
significant effects ($100 million or more in any 1 year). Based on our
estimates, this proposed rule is not economically significant since it
does not meet the $100 million threshold. Nevertheless, OMB's Office of
Information and Regulatory Affairs has determined that this rulemaking
is ``significant'' according to section 3(f) of Executive Order 12866,
``. . . raising novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order . . .'' Therefore, OMB has reviewed this proposed
rule, and the Departments have provided the following assessment of
their impact.
C. Detailed Economic Analysis
1. Benefits
As discussed in section II. of this proposed rule, we believe the
data furnished under our proposal would help CMS more closely monitor
the ownership and management of nursing facilities. This, in
conjunction with the Biden-Harris Administration's other initiatives,
could help improve beneficiary care, although these potential benefits
cannot be monetarily quantified.
2. Costs
The lone category of costs associated with this proposed rule
involves nursing facilities' submission of the required information. We
projected in section III. of this proposed rule that the annual burden
on nursing facilities of furnishing this data would be 18,912 hours at
a cost of $1,733,096. (Note that there are no Regulatory Review Costs.
Costs to understand and provide the necessary data are included in the
ICR costs mentioned above.)
3. Savings or Transfers
We do not anticipate any direct savings or transfers from our
proposal. This is principally because the proposal merely involves the
submission of data for CMS or state review.
D. Alternatives Considered
The principal alternative we considered and adopted was our
proposal that a SNF would not have to report the data referenced in
proposed Sec. 424.516(g) twice on the same Form CMS-855A submission:
once per sections 1124(a) and 1124A of the Act and again per section
1124(c) of the Act. This was intended to alleviate the burden on the
SNF community, though we cannot quantify any resultant savings in
monetary terms. We did not consider other alternatives because of the
statute's clear mandate concerning the specific data to be reported.
E. Accounting Statement and Table
As required by OMB Circular A-4 (available at <a href="https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf">https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf</a>), we have prepared an accounting statement in
Table 3 showing the classification of the impact associated with the
provisions of this proposed rule.
Table 3--Accounting Statement: Estimated Burden and Review Costs of Nursing Facility Disclosure Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
Units
Primary -------------------------------- Period
Category estimate Low estimate High estimate Discount rate covered
Year dollar (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized ICR Burden......................... $1.73 $1.30 $2.16 2022 7 2022-2032
1.73 1.30 2.16 2022 3 2022-2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
F. Regulatory Flexibility Act (RFA) Analysis
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, we estimate that
SNFs are small entities as that term is used in the RFA (including
small businesses, nonprofit organizations, and small governmental
jurisdictions). The great majority of hospitals and most other health
care providers and suppliers (including nursing facilities) are small
entities, either by being nonprofit organizations or by meeting the
Small Business Administration (SBA) definition of a small business
having revenues of less than $14 million to $30 million in any 1 year
(for details, see the SBA's website at <a href="https://www.sba.gov/document/support-table-size-standards">https://www.sba.gov/document/support-table-size-standards</a> for the 62311 SNFs series). For purposes
of the RFA, most SNFs are considered small businesses according to the
SBA's size standards with total revenues of $30 million or less in any
1 year.
Individuals and states are not included in the definition of a
small entity. As its measure of significant economic impact on a
substantial number of small entities, HHS uses a change in revenue of
more than 3 to 5 percent. Given the: (1) fairly small number of
providers that would be affected by this rule when compared with the
over 2 million Medicare providers and suppliers; and (2) projected
costs we previously outlined, we do not believe this threshold would be
reached by the requirements of this proposed rule. Therefore, the
Secretary has certified that this proposed rule will not have a
significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has 100 or fewer beds. As this proposed rule would
only affect nursing facilities, it would not have a significant impact
on the operations of a substantial number of small rural hospitals.
[[Page 9829]]
G. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2022, that
threshold level is currently approximately $165 million. Given the
aforementioned estimated costs, this proposed rule does not mandate any
requirements for State, local, or tribal governments, or for the
private sector.
H. Federalism Analysis
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct costs on State and local
governments, preempts State law, or otherwise has federalism
implications. We have examined our proposed provisions in accordance
with Executive Order 13132 and have determined that they will not have
a substantial direct effect on State, local or tribal governments,
preempt State law, or otherwise have a federalism implication.
V. Response to Comments
Because of the large number of public comments, we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on January 24, 2023.
List of Subjects
42 CFR Part 424
Health facilities, Health professions, Medicare, Reporting and
recordkeeping requirements.
42 CFR Part 455
Grant programs--health, Health facilities, Medicaid, Program
integrity.
For the reasons stated in the preamble, the Centers for Medicare &
Medicaid Services proposes to amend 42 CFR chapter IV as follows:
PART 424--CONDITIONS FOR MEDICARE PAYMENT
0
1. The authority for part 424 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395hh.
Subpart P--Requirements for Establishing and Maintaining Medicare
Billing Privileges
0
2. Section 424.502 is amended by--
0
a. Adding the definition of ``Additional disclosable party'' in
alphabetical order;
0
b. Revising the definition of ``Managing employee''; and
0
c. Adding the definitions of ``Organizational structure'', ``Private
equity company'', and ``Real estate investment trust'' in alphabetical
order.
The additions and revision read as follows:
Sec. 424.502 Definitions.
* * * * *
Additional disclosable party means, with respect to a skilled
nursing facility defined at section 1819(a) of the Act, any person or
entity who does any of the following:
(1) Exercises operational, financial, or managerial control over
the facility or a part thereof, or provides policies or procedures for
any of the operations of the facility, or provides financial or cash
management services to the facility.
(2) Leases or subleases real property to the facility, or owns a
whole or part interest equal to or exceeding 5 percent of the total
value of such real property.
(3) Provides management or administrative services, management or
clinical consulting services, or accounting or financial services to
the facility.
* * * * *
Managing employee means--
(1) A general manager, business manager, administrator, director,
or other individual that exercises operational or managerial control
over, or who directly or indirectly conducts, the day-to-day operation
of the provider or supplier, either under contract or through some
other arrangement, whether or not the individual is a W-2 employee of
the provider or supplier; or
(2) With respect to the additional requirements at Sec. 424.516(g)
for a skilled nursing facility defined at section 1819(a) of the Act,
an individual, including a general manager, business manager,
administrator, director, or consultant, who directly or indirectly
manages, advises, or supervises any element of the practices, finances,
or operations of the facility.
* * * * *
Organizational structure means, with respect to a skilled nursing
facility defined at section 1819(a) of the Act, in the case of any of
the following:
(1) A corporation. The officers, directors, and shareholders of the
corporation who have an ownership interest in the corporation which is
equal to or exceeds 5 percent.
(2) A limited liability company. The members and managers of the
limited liability company including, as applicable, what percentage
each member and manager has of the ownership interest in the limited
liability company.
(3) A general partnership. The partners of the general partnership.
(4) A limited partnership. The general partners and any limited
partners of the limited partnership who have an ownership interest in
the limited partnership which is equal to or exceeds 10 percent.
(5) A trust. The trustees of the trust.
(6) An individual. Contact information for the individual.
* * * * *
Private equity company means, for purposes of this subpart only, a
publicly-traded or non-publicly traded company that collects capital
investments from individuals or entities and purchases an ownership
share of a provider.
Real estate investment trust means, for purposes of this subpart
only, a publicly-traded or non-publicly traded company that owns part
or all of the buildings or real estate in or on which a provider
operates.
* * * * *
0
3. Section 424.516 is amended by adding paragraph (g) to read as
follows:
Sec. 424.516 Additional provider and supplier requirements for
enrolling and maintaining active enrollment status in the Medicare
program.
* * * * *
(g) Skilled nursing facilities. (1) In addition to all other
applicable reporting requirements in this subpart, a skilled nursing
facility (as defined in section 1819(a) of the Act) must disclose upon
initial enrollment (which, for purposes of this paragraph (g), also
includes a change of ownership under 42 CFR 489.18) and revalidation
the following information:
(i) Each member of the governing body of the facility, including
the name, title, and period of service for each such member.
(ii) Each person or entity who is an officer, director, member,
partner, trustee, or managing employee (as defined in Sec. 424.502) of
the facility,
[[Page 9830]]
including the name, title, and period of service of each such person or
entity.
(iii) Each person or entity who is an additional disclosable party
of the facility (as defined in Sec. 424.502).
(iv) The organizational structure (as defined in Sec. 424.502) of
each additional disclosable party of the facility and a description of
the relationship of each such additional disclosable party to the
facility and to one another.
(2) The skilled nursing facility need not disclose the same
information described in paragraph (g)(1) of this section more than
once on the same enrollment application submission.
(3) The skilled nursing facility must report any change to any of
the information described in paragraph (g)(1) of this section
consistent with the applicable timeframes in paragraph (e) of this
section.
PART 455--PROGRAM INTEGRITY: MEDICAID
0
4. The authority citation for part 455 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
5. Section 455.101 is amended by:
0
a. Adding the definition of ``Additional disclosable party'' in
alphabetical order;
0
b. Revising the definition of ``Managing employee''; and
0
c. Adding the definition of ``Organizational structure'' in
alphabetical order.
The additions and revision read as follows:
Sec. 455.101 Definitions.
Additional disclosable party means, with respect to a nursing
facility defined in section 1919(a) of the Act, any person or entity
who--
(1) Exercises operational, financial, or managerial control over
the facility or a part thereof, or provides policies or procedures for
any of the operations of the facility, or provides financial or cash
management services to the facility;
(2) Leases or subleases real property to the facility, or owns a
whole or part interest equal to or exceeding 5 percent of the total
value of such real property; or
(3) Provides management or administrative services, management or
clinical consulting services, or accounting or financial services to
the facility.
* * * * *
Managing employee means--
(1) A general manager, business manager, administrator, director,
or other individual who exercises operational or managerial control
over, or who directly or indirectly conducts, the day-to-day operation
of an institution, organization, or agency, either under contract or
through some other arrangement, whether or not the individual is a W-2
employee of the institution, organization, or agency; or
(2) With respect to the additional requirements at Sec. 455.104(e)
for a nursing facility defined in section 1919(a) of the Act, an
individual, including a general manager, business manager,
administrator, director, or consultant, who directly or indirectly
manages, advises, or supervises any element of the practices, finances,
or operations of the facility.
Organizational structure means, with respect to a nursing facility
defined in section 1919(a) of the Act, in the case of any of the
following:
(1) A corporation. The officers, directors, and shareholders of the
corporation who have an ownership interest in the corporation which is
equal to or exceeds 5 percent.
(2) A limited liability company. The members and managers of the
limited liability company including, as applicable, what percentage
each member and manager has of the ownership interest in the limited
liability company.
(3) A general partnership. The partners of the general partnership;
(4) A limited partnership. The general partners and any limited
partners of the limited partnership who have an ownership interest in
the limited partnership which is equal to or exceeds 10 percent.
(5) A trust. The trustees of the trust.
(6) An individual. Contact information for the individual.
* * * * *
0
6. Section 455.104 is amended by redesignating paragraph (e) as
paragraph (f) and adding new paragraph (e) to read as follows:
Sec. 455.104 Disclosure by Medicaid providers and fiscal agents:
Information on ownership and control.
* * * * *
(e) Nursing facilities. (1) In addition to all other applicable
reporting requirements in this subpart, a nursing facility (as defined
in section 1919(a) of the Act) must disclose upon initial enrollment
and revalidation the following information:
(i) Each member of the governing body of the facility, including
the name, title, and period of service for each such member.
(ii) Each person or entity who is an officer, director, member,
partner, trustee, or managing employee (as defined in Sec. 455.101) of
the facility, including the name, title, and period of service of each
such person or entity.
(iii) Each person or entity who is an additional disclosable party
of the facility (as defined in Sec. 455.101).
(iv) The organizational structure (as defined in Sec. 455.101) of
each additional disclosable party of the facility and a description of
the relationship of each such additional disclosable party to the
facility and to one another.
(2) The State need not require the facility to disclose the same
information described in this paragraph (e) more than once on the same
enrollment application submission.
* * * * *
Dated: February 8, 2023.
Xavier Becerra
Secretary, Department of Health and Human Services.
[FR Doc. 2023-02993 Filed 2-13-23; 4:15 pm]
BILLING CODE P
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</html>Indexed from Federal Register on February 15, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.