Newly updated CMS-855A forms significantly expands reporting of ownership and control information for skilled nursing facilities

Skilled nursing facilities (SNF) will soon be required to significantly expand their reporting of ownership and control information on newly updated CMS-855A forms. The CMS-855A is the Medicare Enrollment Application used by “Institutional Providers” such as hospitals, home health agencies, and SNFs, among others. Initially, the Centers for Medicare & Medicaid Services (CMS) had issued regulations which were to go into effect on January 16, 2024. However, the effective date was delayed until October 1, 2024. These regulations were promulgated, in part, as an effort to increase transparency and accountability for the care provided by corporate owners and operators of SNFs. Of particular concern are private equity companies, which have faced increased scrutiny over their perceived role in worsening outcomes of private equity owned SNFs. As a result, the regulations require SNFs to begin reporting a substantially increased amount of information regarding the ownership and control of a SNF. This information is to be reported on the newly created “Attachment 1: Skilled Nursing Facility Disclosures” (Attachment 1), which is included with a revised CMS-855A form.

New Information Needed

            While some of the information required by Attachment 1 is the same as the information SNFs may already be accustomed to reporting in sections 5 and 6 of the previous CMS-855A, the new version contains many new items that must be reported. These new items are summarized below:

1. SNFs must report the members of their governing body, regardless of the type of business entity (e.g. corporation, LLC, partnership, etc.). Previously, only SNF corporations were required to report their board members.
2. SNF LLC’s must report all members, regardless of the percentage that they own. Previously, individuals or organizations which had a less than 5% ownership interest were not required to report.
3. All “Additional Disclosable Parties (“ADP”) must be reported. ADPs are a wide ranging group, which include persons or entities which:
   • Exercise operational, financial, or managerial control over a part of the SNF
   • Provide policies or procedures for any of the SNFs operations
   • Provide management, financial, cash management, administrative, management consulting, clinical consulting, or accounting services to the SNF
   • Lease or sublease real property to the SNF, or own a whole or part interest equal to or exceeding 5% of the total value of that real property.
4. Even persons and entities within the ADP must be reported.
   • ADP corporations must report its officers and directors and any person or entity with a 5% or greater direct or indirect ownership interest in the ADP
   • ADP LLCs must report any person or entity who manages the LLC and any person or entity that has a direct or indirect ownership interest in the LLC (regardless of percentage)
   • ADP general partnerships must report all persons or entities with a partnership/ownership interest in the ADP (regardless of percentage)
   • ADP limited partnerships must report all persons or entities with a general partnership/ownership interest in the ADP (regardless of percentage) and all persons or entities with a limited partnership interest in the ADP of at least 10%
   • ADP trusts must report all trustees

The information required to be reported is extensive, and CMS’ additional guidance document (Guidance for SNF Attachment on Form CMS-855A, published November 15, 2024) regarding these changes makes it clear that the expectation is that the ownership and control reporting is expected to be highly inclusive. For example, CMS states that even an ADP with a complex, multi-layered ownership structure must include all levels and layers of ownership if they qualify as a direct or indirect owner. Similarly, CMS states that there is no minimum length of time, degree of involvement, or volume of services which would disqualify a given party from disclosure.

            CMS goes on to include even more examples in their guidance document, but encourages SNFs to contact a legal professional to determine whether a given party should be disclosed on the CMS-855A. While the examples are too numerous to include here, it is important to remember that CMS expects a wide range of persons and entities to be disclosed on the CMS-855A. A list of examples of persons or entities which may have to be reported depending on the nature of their services is below, and should give SNFs an idea of the breadth of these reporting requirements:

• Accountants or accounting companies that perform any accounting services, whether they are in house or contracted with;
• Human resources professionals;
• Banks which have extended a line of credit to a SNF;
• Consultants who author emergency or disaster plans;
• People or entities with oversight or responsibility for food operations, maintenance, marketing, therapy, or patient activities;
• And possibly many others.

            Private equity companies and other organizations like real estate investment trusts have been named as one of the reasons that the expanded reporting for SNFs has been implemented. As such, these organizations should be aware that they may be a part of this reporting through a number of routes. In addition to SNFs being required to report some information about a private equity company based on any ownership, management, or leasing activities performed by the private equity company, the company may also qualify as an ADP, which would also require reporting from the ADP. Private equity companies should be aware of possible reporting requirements as they structure their relationships with SNFs.

Completing the revised CMS-855A for SNFs

            SNFs are no longer required to complete the ownership and/or managing control information sections in CMS-855A (i.e. Sections 5 and 6). Instead, SNFs will check a box at the beginning of each of Sections 5 and 6, which will direct the examiner to the information on Attachment 1.

            SNFs are required to complete Attachment 1 during their initial enrollment, revalidations, changes of information, and changes of ownership. It is important to note that only the information that is changing in Attachment 1 needs to be updated in a change of information submission. All SNFs need to be aware that off-cycle revalidations are being performed between October and December 2024. The due date for these revalidations is May 1, 2025.

            Because of the volume and complexity of information that is required to be disclosed, it is important to understand the expectations that CMS has for SNFs in successfully obtaining this information. CMS expects SNFs to utilize “maximum feasible efforts” to obtain the information required by CMS-855A. Unfortunately, there is no definition of “maximum feasible efforts”, however, if required, multiple attempts and multiple attempted routes of obtaining the required information may be expected by CMS. Importantly, CMS stated that multiple attempts at obtaining information from an ADP are not needed if the ADP refuses to provide the data and the information is not available or accessible elsewhere. Despite this guidance regarding “maximum feasible efforts” that was provided in their sub-regulatory guidance document, in the Final Rule, CMS declined to offer any exemptions to any reporting requirements.

Preparing for the New CMS-855A

            Simply put, Attachment 1 to the new CMS-855A will require SNFs to utilize significant organizational resources to complete. Especially as SNFs become comfortable with the use of the new form, SNFs should expect that increased administrative time will be necessary to complete the CMS-855A in a timely fashion. As all SNFs will be undergoing a revalidation, it is important for SNFs to proactively begin to gather the information required to be disclosed. Since Attachment 1 is available to the public now, SNFs should consider commencing their information gathering whether or not they have received their revalidation letter.

            Also, as some of the information may be difficult to obtain, it is important to document the process followed to obtain the information, and log the attempts to gather the information as well. If a MAC questions a SNF’s submission, this documentation can be a very important tool to demonstrate compliance.

            As always, consider contacting an attorney to assist with Attachment 1. Because of the significantly expanded requirements, it is important to work with an attorney to determine all of the various persons or entities which should be included on your CMS-855A.

            These regulations which gave rise to Attachment 1 were implemented under the initiative of the Biden administration in order to increase transparency and accountability for SNFs. While not guaranteed, the incoming Trump administration may choose to modify or nullify these regulations. The uncertainty leaves SNFs in a difficult position. On the one hand, SNFs are well served to prepare for their revalidation well ahead of the May 1, 2025 deadline; however, such preparations may not, at least in part, ultimately be necessary.