[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 [www.gpo.gov]
[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 https://www.regulations.gov. 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 [email protected].

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: https://www.regulations.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov 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:
     Each member of the governing body of the facility, 
including the name, title, and period of service of each member.
     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.
     Each person or entity who is an additional disclosable 
party of the facility.
     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

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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:
     Section 1124(c) of the Act requires Medicare and Medicaid 
nursing facilities to disclose certain information about their 
ownership and management.
     Section 1866(j) of the Act furnishes specific authority 
regarding the enrollment process for providers and suppliers.
     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:
     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.
     Change of ownership--The provider or supplier is reporting 
a change in its ownership.
     Revalidation--The provider or supplier is revalidating its 
Medicare enrollment information in accordance with Sec.  424.515.
     Reactivation--The provider or supplier is seeking to 
reactivate its Medicare billing privileges after it was deactivated in 
accordance with Sec.  424.540.
     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:
     Requiring providers to disclose information regarding 
ownership, business transactions, certain criminal convictions, and 
affiliations (Sec. Sec.  455.104 through 455.107).
     Screening providers consistent with the procedures in part 
455, subpart E (Sec.  455.410).

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     Revalidating a provider's enrollment at least every 5 
years (Sec.  455.414).
     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--
     The name, title, and period of service of each member of 
the facility's governing body;
     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
     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--
     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;
     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
     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\ 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/.
    \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''

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(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:
     Each member of the governing body of the facility, 
including the name, title, and period of service of each such member.
     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.
     Each person or entity who is an additional disclosable 
party of the facility.
     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--
     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;
     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;
     For a general partnership--The partners of the general 
partnership;
     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;
     For a trust--The trustees of the trust;
     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 data.cms.gov. 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:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     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 (https://www.bls.gov/oes/current/oes_nat.htm):

                          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\
---------------------------------------------------------------------------

    \12\ 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/.
---------------------------------------------------------------------------

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 https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), 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 https://www.sba.gov/document/support-table-size-standards 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]
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