Press Release  AG Campbell Co-Leads Letter Calling for Increased Disclosure and Transparency of Nursing Home Ownership and Management

BOSTON — Massachusetts Attorney General Andrea Joy Campbell and New York Attorney General Letitia James are co-leading a coalition of 18 state Attorneys General and the Inspector General of Washington D.C. in support of a proposed rule by the U.S. Department of Health and Human Services 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.

The letter, submitted on Friday by the coalition, 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 state Attorneys General and their Medicaid Fraud Control Units (MFCUs) to hold bad actors accountable for providing substandard care in nursing facilities.

“When actors in the nursing home industry put profits first at the expense of people’s health and well-being, the public deserves to know who they are,” said AG Campbell. “I’m proud to join my colleagues from across the country in support of these common-sense rules to improve transparency and accountability.”

State Attorneys General are charged with protecting the safety and well-being of residents of nursing facilities. Their offices, either through Medicaid Fraud Control Units 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.

The COVID-19 pandemic exposed real concerns about the care provided by many nursing facilities. Over 200,000 nursing facility residents and staff died due to COVID-19 since the start of the pandemic, accounting for at least 23% of all COVID-19 deaths in the United States. 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 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 a case last year dealing with tragic outcomes like these, the Massachusetts AG’s Office entered into a settlement agreement with a chain of nursing facilities to resolve a series of allegations, including that the company failed to meet the needs of nursing home residents experiencing substance use disorder. The AG’s Office alleged that understaffing and under-resourcing at these facilities led to the deaths of several long-term care residents by overdose.

In their letter, the AGs 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%; 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.

As part of efforts to hold private equity investors accountable, in 2021, the Massachusetts AG’s office negotiated a precedent-setting settlement in which a private equity firm and former executives of South Bay Mental Health Center agreed to pay $25 million for fraudulently billing Massachusetts for mental health care services provided to patients by unlicensed, unqualified, and improperly supervised staff members at clinics across the state.

The AGs’ letter further points out that corporate owners and operators, especially 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.

Joining AG Campbell and AG James in the letter supporting the CMS proposed rule are the Attorneys General of Arizona, California, Delaware, Hawaii, Maine, Maryland, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.

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