A nursing home that the Portopiccolo Group, a notorious private equity firm, purchased from Genesis HealthCare in May 2020, is pictured in Takoma Park, Maryland on November 29, 2020.

A nursing home that the Portopiccolo Group, a notorious private equity firm, purchased from Genesis HealthCare in May 2020, is pictured in Takoma Park, Maryland on November 29, 2020. (Photo: Jonathan Newton/The Washington Post)

US Government Failing to Regulate Private Equity-Owned Nursing Homes: Report

"Comprehensive ownership information is essential for effective oversight and for families to decide where to place their loved ones," said one researcher.

Federal regulators in the United States have yet to implement a 2010 law requiring nursing homes to disclose who their owners are, and this dereliction of duty may be shielding private equity firms from scrutiny and contributing to a growing crisis of substandard care in assisted living facilities across the nation, according to a Public Citizen study released Thursday.

"Ownership disclosure is about as spotty today as it was when the law was passed in 2010."

"Comprehensive ownership information is essential for effective oversight and for families to decide where to place their loved ones," said Taylor Lincoln, a research director at Public Citizen and author of Is It Private Equity? We Can't See. "Otherwise it's impossible to determine if a facility is owned by those who may be guilty of fraud or providing negligent care at other locations."

In response to findings that private equity firms were cutting costs to boost profits and that opaque reporting practices made it nearly impossible to identify the owners of nursing homes, Congress included language in the 2010 Affordable Care Act (ACA) mandating facilities to provide comprehensive information about their ownership structures--details that were supposed to be made available to the public.

The U.S. Department of Health and Human Services (HHS) was tasked with establishing rules to implement the ACA's transparency provisions within two years, but more than a decade later--after the Covid-19 pandemic turned many nursing homes into sites of mass death--the agency still has not issued the relevant regulations.

Meanwhile, evidence continues to mount that private equity firms--estimated to own about 11% of the nation's 15,000 nursing homes--are providing worse care than their peers, putting lives at risk.

To test the quality of nursing home ownership data currently published by the federal government, which is based on pre-ACA requirements that HHS strengthened without implementing formal regulations, Public Citizen analyzed reports of facilities owned by a pair of private equity firms as well as others believed to be owned by 13 private equity firms.

According to Public Citizen, queries of the existing database suggest that "ownership disclosure is about as spotty today as it was when the law was passed in 2010."

Among the study's key findings:

  • The Portopiccolo Group--a company recently describing itself as a "private equity firm" and now as a "family office"--has since 2016 accumulated 136 nursing homes by our count. But the word "Portopiccolo" does not appear a single time in the federal nursing home ownership database.
  • Private equity firm Assured Healthcare Partners lists nursing home chain Regency Integrated Health Services among its portfolio companies. The federal ownership database includes reports for 58 Regency facilities. Only five of those facilities provide any indication of Assured Healthcare Partners' involvement in them.
  • Of 13 private equity firms that we believe (often based on information from nongovernment sources) to have holdings in nursing homes, only seven appear in the federal ownership database.
  • Descriptions of the relationships between each nursing home's owners, which the ACA required HHS to collect and disclose, have not been made public.

"The public has a particular right to this information," wrote Lincoln, "because about 85% of nursing home revenue comes from the taxpayer-funded programs Medicare and Medicaid."

While roughly 70% of the nation's assisted living facilities operate as for-profit businesses, "many of the worst actors are owned by private equity firms that have made an art form out of stripping nursing homes of their resources to supercharge short-term profits," Lincoln tweeted.

"If various nursing homes are essentially owned by the same PE firm but, instead, report being owned by an alphabet soup of LLCs [and] leave out the PE firm at the top of the pyramid," he added, "the public and regulators are left unaware of these connections."

Last week, medical student and journalist Yasmin Rafiei documented how the Portopiccolo Group--the private equity firm that has acquired more than 130 nursing homes and yet is nowhere to be found in the federal government's woefully inadequate database--fired workers, slashed services, and paved the way for a deadly Covid-19 outbreak at St. Joseph's Home for the Aged in Richmond, Virginia.

As Lincoln noted in the Public Citizen study, "Reports that the pandemic turned some nursing homes into virtual death traps prompted renewed calls for greater disclosure of ownership information."

Then-presidential candidate Joe Biden "promised to audit nursing homes' spending and ownership data," the report points out. "Subsequently, in February 2022, the Biden administration promised several actions to improve the safety and quality of nursing home care, including a pledge to implement Affordable Care Act requirements 'regarding transparency in corporate ownership of nursing homes.'"

However, "the administration does not appear to have begun work on creating the relevant regulation," the report adds. "It should do so."

In addition to fulfilling its long-overdue obligation to finalize the rules needed to implement the ACA's ownership disclosure requirements, Public Citizen also recommended that HHS:

  • Send a notice to all nursing home providers 1) informing them that nursing home ownership disclosure guidelines call for much more information than many nursing homes currently furnish and 2) requiring them to promptly correct any shortcomings in their disclosures.
  • Immediately begin posting the information that nursing homes have provided regarding their owners' organizational structures and the relationships between their various owners.

The stakes for publishing complete and accurate data about nursing home ownership are high.

As Common Dreams reported earlier this year, private equity firms are capitalizing on Americans' growing mistrust of nursing homes--a phenomenon they helped create--by sinking their teeth deeper into the even less-regulated but fast-growing home healthcare and hospice industries now preferred by many families.

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