On November 17, 2023, CMS issued the final rule implementing new ownership and managerial disclosure requirements for skilled nursing facilities enrolling or re-validating enrollment in the Medicare and Medicaid programs.  The changes are effective January 16, 2024 but the disclosures will not be required until the CMS-855A form is revised to collect the additional data.

New Disclosure Rules

While nursing homes currently provide information about both entities and individuals who own or manage those facilities, the new rules will require more granular disclosures regarding ownership and management.  Generally, the new rule provides that nursing homes will be required to disclose the following information:

• Each member of the facility’s governing body, including name, title, and period of service;
• Each person or entity who is an officer, director, member, partner, trustee or “managing employee” of the facility;
• Each person or entity who is an “additional disclosable party” (ADP) for the facility; and
• The organizational structure of each ADP and a description of the relationship of each ADP to the facility and to one another.

While some of this information is required on the current 855-A, the rule includes disclosure requirements that are new or broadened by CMS adding definitions to clarify the scope of the disclosure requirements.  The following are some of the changes being implemented by the new rule:

Managing Employee: The term “managing employee” is now defined to include both the facility’s administrator and facility’s medical director.

Additional Disclosable Party (ADP):  The rule requires disclosures for “ADPs” as a catch-all to broadly identify individuals or entities that may be involved in the management of a facility.   An ADP is defined by the new rule to include a person or entity that:

• Exercises operational, financial or managerial control over the facility; provides policies or procedures of any of the facilities operations; or provides financial or cash management services for the facility;
• Leases or subleases real property to the facility or owns a whole or part interest of such property equal to or greater than 5%; or
• Provides management or administrative services; management or clinical consulting services, or accounting or financial services to the facility.

Organizational Structure:  While the current 855-A requires a “diagram identifying the organization structures of all owners,” the new rule specifically defines the term “organizational structure” to include specific disclosures for different corporate forms.  For example, the new rule states that the organizational structure for a limited liability company includes disclosure of the “members and managers of the limited liability company (including, as applicable what percentage each member or manager has of the ownership interest in the limited liability company).”

Private Equity and REITs:  The rule also adds data elements to the 855-A by which all providers must identify whether an entity it has disclosed on its application is a private equity company or a real estate investment trust (REIT) and incorporates definitions of both terms in the rule.

In order to assist providers with applying the new rule when completing the new 855-A forms, CMS advised that it will be issuing sub-regulatory guidance that provides examples and factual situations to further clarify the new terms and definitions.

Disclosure Timing:  The new rule does not change the time periods by which facilities must provide notice to CMS of any changes in disclosable information or the length of time the provider has to complete a revalidation request.   However, because revalidations are effective for 5 years, CMS did indicate that it will be conducting off-cycle revalidations to capture the new data more quickly.

Public Availability of Ownership Data

Within one year of the publication date (November 17, 2023), CMS will make information disclosed on the 855-A publicly available.  However, the rule lacked detail on how that information will be provided to the public and CMS indicated that it would issue additional sub-regulatory guidance regarding the publication of that data, including the timing, content, and means of the data publication.