OAKLAND— State Attorney General Rob Bonta on Wednesday announced joining a multi-state coalition in support of a proposed federal rule that would require nursing facilities to be more transparent about their true owners.

Attorney General Rob Bonta

A 2020 report by the U.S. Department of Health and Human Services (HHS) identified abuse, neglect, and misappropriation of property as widespread problems in nursing homes. However, those responsible for such substandard care decisions have in the past successfully hidden behind complex ownership and operations structures to evade accountability.

In their letter, the coalition of 18 state attorneys general and the inspector general of Washington, D.C. argued that the proposed rule by HHS and the Centers for Medicare and Medicaid Services (CMS) would help states investigate and prosecute crimes in the management of nursing homes, including abuse, neglect, and misappropriation of resident funds.
“The owners and managers of residential care facilities should be dedicated to ensuring the residents in their care can live a healthy, happy, and dignified life,” said Bonta.“Unfortunately, there are some for-profit companies operating nursing facilities that sacrifice their residents’ quality of life and focus instead on lining their own pockets.

“At the California Department of Justice, the health and safety of residents is always a top priority. That’s why we stand in support of this proposed federal rule, which will increase transparency about the ownership of nursing facilities and help us hold bad actors accountable for their neglectful, predatory, or abusive management practices.”
An analysis in the Journal of the American Medical Association found that when a nursing home is owned by for-profit, private equity companies, the residents’ quality of care is often negatively impacted due to reduced staffing, services, supplies, or equipment. Another analysis by the National Bureau of Economic Research found a 10% increase in the short-term mortality of Medicare patients of nursing facilities with private equity ownership. 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. 
If the proposed rule by CMS and HHS takes effect, nursing facility providers would have to disclose information about which entities have ownership interest in the facility, and whether any owners are a for-profit private equity company or real estate investment trust. In their letter, the coalition asserted that the proposed rule will:

• Help ensure CMS has sufficient data on these kinds of owners and can thus better monitor their nursing homes and hold them accountable; 

• Allow consumers to select nursing homes with better knowledge of their owners and operators.

Bonta joins the attorneys general of Arizona, Delaware, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington in filing the letter.

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