New CMS Nursing Home Ownership Data: Major Gaps And Discrepancies.

Nursing home ownership has become increasingly complicated, partly because of the growth of facilities owned by institutional investors such as private equity (PE) firms and real estate investment trusts (REITs). Although the ownership transparency and accountability of nursing homes have historically been poor, the Biden administration's nursing home reform plans released in 2022 included a series of data releases on ownership. However, our evaluation of the newly released data identified several gaps: One-third of PE and fewer than one-fifth of REIT investments identified in the proprietary Irving Levin Associates and S&P Capital IQ investment data were present in Centers for Medicare and Medicaid Services (CMS) publicly available ownership data. Similarly, we obtained different results when searching for the ten top common owners of nursing homes using CMS data and facility survey reports of chain ownership. Finally, ownership percentages were missing in the CMS data for 82.40 percent of owners in the top ten chains and 55.21 percent of owners across all US facilities. Although the new data represent an important step forward, we highlight additional steps to ensure that the data are timely, accurate, and responsive. Transparent ownership data are fundamental to understanding the adequacy of public payments to provide patient care, enable policy makers to make timely decisions, and evaluate nursing home quality.

Association of Private Equity Firm Acquisition of Ophthalmology Practices with Medicare Spending and Use of Ophthalmology Services.

PURPOSE: Private equity (PE) firms increasingly are acquiring ophthalmology practices; little is known of their influence on care use and spending. We studied changes in use and Medicare spending after PE acquisition. DESIGN: Retrospective cohort study. PARTICIPANTS: Seven hundred sixty-two clinicians in 123 practices acquired by PE between 2017 and 2018 and 34 807 clinicians in 20 549 never-acquired practices. METHODS: We analyzed Medicare fee-for-service claims (2012-2019) combined with a novel national database of PE acquisitions of ophthalmology practices using a difference-in-differences method within an event study framework to compare changes after a practice was acquired with changes in practices that were not acquired. MAIN OUTCOME MEASURES: Numbers of beneficiaries seen; intravitreal injections and medications used for injections; and spending on ophthalmologist and optometrist services, ancillary services, and intravitreal injections. RESULTS: Comparing PE-acquired with nonacquired practices showed a 23.92% increase (n = 4.20 beneficiaries; 95% confidence interval [CI], 1.73-6.67) in beneficiaries seen per PE optometrist per quarter and no change for ophthalmologists, while spending per beneficiary increased 5.06% ($9.66; 95% CI, -2.82 to 22.14). Spending on clinician services decreased 1.62% (-$2.37; 95% CI, -5.78 to 1.04), with ophthalmologist services increasing 5.46% ($17.70; 95% CI, -2.73 to 38.15) and optometrists decreasing 4.60% (-$5.76; 95% CI, -9.17 to -2.34) per beneficiary per quarter. Ancillary services decreased 7.56% (-$2.19; 95% CI, 4.19 to -0.22). Intravitreal injection costs increased 25.0% ($20.02; 95% CI, -1.38 to 41.41) with the number increasing 5.10% (1.83; 95% CI, -0.1 to 3.80). There was a 74.09% increase (8.38 injections; 95% CI, 0.01-16.74) in ranibizumab and a 12.91% decrease (-3.40 injections; 95% CI, -6.86 to 0.07) in bevacizumab after acquisition. The event study showed consistent and often statistically significant increases in ranibizumab injections and decreases in bevacizumab injections after acquisition. CONCLUSIONS: Although not all results reached statistical significance, this study suggested that PE acquisition of practices showed little or no overall effect on use or total spending, but increased the number of unique patients seen per optometrist and the use of expensive intravitreal injections. FINANCIAL DISCLOSURE(S): Proprietary or commercial disclosure may be found in the Footnotes and Disclosures at the end of this article.

United States' Nursing Home Finances: Spending, Profitability, and Capital Structure.

Little is known about nursing home (NH) financial status in the United States even though most NH care is publicly funded. To address this gap, this descriptive study used 2019 Medicare cost reports to examine NH revenues, expenditures, net income, related-party expenses, expense categories, and capital structure. After a cleaning process for all free-standing NHs, a study population of 11,752 NHs was examined. NHs had total net revenues of US$126 billion and a profit of US$730 million (0.58%) in 2019. When US$6.4 billion in disallowed costs and US$3.9 billion in non-cash depreciation expenses were excluded, the profit margin was 8.84 percent. About 77 percent of NHs reported US$11 billion in payments to related-party organizations (9.54% of net revenues). Overall spending for direct care was 66 percent of net revenues, including 27 percent on nursing, in contrast to 34 percent spent on administration, capital, other, and profits. Finally, NHs had long-term debts that outweighed their total available financing. The study shows the value of analyzing cost reports. It indicates the need to ensure greater accuracy and completeness of cost reports, financial transparency, and accountability for government funding, with implications for policy changes to improve rate setting and spending limits.

Changes in Diagnoses and Site of Care for Patients Receiving Hospice Care From Agencies Acquired by Private Equity Firms and Publicly Traded Companies.

Importance: Private equity firms and publicly traded companies have been acquiring US hospice agencies; an estimated 16% of US hospice agencies are owned by private equity (PE) firms or publicly traded companies (PTC). Objective: To examine the association of PE and PTC acquisitions of hospices with Medicare patients' site of care and clinical diagnoses. Design, Setting, and Participants: This cohort study of US hospice agencies used a novel national database of acquisitions merged with the Medicare Post-Acute Care and Hospice Public Use File for 2013 to 2020. Changes in sites of care and patient characteristics for hospice agencies acquired by PE or PTCs were compared with changes for patients in nonacquired for-profit hospice agencies. Exposure: Private equity and publicly traded company acquisitions. Main Outcomes and Measures: This study used a difference-in-differences approach within an event-study framework to examine the association of PE and PTC acquisitions of hospice agencies with changes in patient diagnoses and sites of care. Dependent variables were annual hospice-level measures of the Hierarchical Condition Category (HCC) score and proportion of patients diagnosed with cancer or dementia. Sites of care included the proportion of patients receiving hospice care in their personal home, nursing home, or assisted living facility. Results: A total of 158 hospice agencies acquired by PEs, 250 acquired by PTCs, and 1559 other for-profit hospice agencies were included. Preacquisition, hospice agencies that would later be acquired by PE or PTC served a mean (IQR) 30.1% (12.0%-44.0%) and 29.4% (13.0%-43.0%) of their patients in nursing homes respectively, a greater proportion compared with the 27.1% (8.0%-43.8%) served by for-profit hospices that were never acquired. Agencies acquired by PE between 2014 and 2019 saw a significant relative increase of 5.98% in dementia patients (1.38 percentage points; 95% CI, 0.35-2.40 percentage points; P = .008). In PTC-owned hospices, the proportion of patients receiving care at home increased by 5.26% (2.98 percentage points; 95% CI, 1.46-4.51 percentage points; P < .001), the proportion of dementia patients rose by 13.49% (3.11 percentage points; 95% CI, 2.14-4.09 percentage points; P < .001), and the HCC score decreased by 1.37% (-3.19 percentage points; 95% CI, -5.92 to -0.47 percentage points; P = .02). Conclusions and Relevance: These findings suggest that PE and PTCs select patients and sites of care to maximize profits.

The Role Of Real Estate Investment Trusts In Staffing US Nursing Homes.

In 2021 real estate investment trusts (REITs) held investments in 1,806 US nursing homes. REITs are for-profit public or private corporations that invest in income-producing properties. We created a novel database of REIT investments in US nursing homes, merged it with Medicare cost report data (2013-19), and used a difference-in-differences approach within an event study framework to compare staffing before and after a nursing home received REIT investment with staffing in for-profit nursing homes that did not receive REIT investment. REIT investment was associated with average relative staffing increases of 2.15 percent and 1.55 percent for licensed practical nurses (LPNs) and certified nursing assistants (CNAs), respectively. During the postinvestment period, registered nurse (RN) staffing was unchanged, but event study results showed a 6.25 percent decrease in years 2 and 3 after REIT investment. After the three largest REIT deals were excluded, REIT investments were associated with an overall 6.25 percent relative decrease in RN staffing and no changes in LPN and CNA staffing. Larger deals resulted in increases in LPN and CNA staffing, with no changes in RN staffing; smaller deals appeared to replace more expensive and skilled RN staffing with less expensive and skilled staff.

How Should Cost-Informed Goals of Care Decisions Be Facilitated at Life's End?

Interventions near patients' deaths in the United States are often expensive, burdensome, and inconsistent with patients' goals and preferences. For patients and their loved ones to make informed care decisions, physicians must share adequate information about prognoses, prospective benefits and harms of specific interventions, and costs. This commentary on a case discusses strategies for sharing such information and suggests that properly designed advance care planning incentives can help improve communication and decision sharing.

Associations of Intellectual Disability with Cardiopulmonary Resuscitation and Endotracheal Intubation at End of Life.

Background: Little is known about end-of-life intensive care provided to patients with intellectual disabilities (ID). Objectives: To identify differences in receipt of end-of-life cardiopulmonary resuscitation (CPR) and endotracheal intubation among adult patients with and without ID and examine whether do-not-resuscitate orders (DNRs) mediate associations between ID and CPR. Design: Exploratory matched cohort study using medical records of inpatient decedents treated between 2012 and 2018. Results: Patients with ID (n = 37) more frequently received CPR (37.8% vs. 21.6%) and intubation (78.4% vs. 47.8%) than patients without ID (n = 74). In multivariable models, ID was associated with receiving CPR (relative risk [RR] = 2.92, 95% confidence interval = 1.26-6.78, p = 0.012), but not intubation. Patients with ID less frequently had a DNR placed (67.6% vs. 91.9%), mediating associations between ID and CPR. Conclusions: In this pilot study, ID was associated with increased likelihood of receiving end-of-life CPR, likely due to lower utilization of DNRs among patients with ID. Further research is needed to confirm these results.

Association of Physician Management Companies and Private Equity Investment With Commercial Health Care Prices Paid to Anesthesia Practitioners.

IMPORTANCE: Physician management companies (PMCs), often backed by private equity (PE), are increasingly providing staffing and management services to health care facilities, yet little is known of their influence on prices. OBJECTIVE: To study changes in prices paid to practitioners (anesthesiologists and certified registered nurse anesthetists) before and after an outpatient facility contracted with a PMC. DESIGN, SETTING, AND PARTICIPANTS: This retrospective cohort study used difference-in-differences methods to compare price changes before and after a facility contracted with a PMC with facilities that did not and to compare differences between PMCs with and without PE investment. Commercial claims data (2012-2017) from 3 large national insurers in the Health Care Cost Institute database were combined with a novel data set of PMC facility contracts to identify prices paid to anesthesia practitioners in hospital outpatient departments and ambulatory surgery centers. The cohort included 2992 facilities that never contracted with a PMC and 672 facilities that contracted with a PMC between 2012 and 2017, collectively representing 2 255 933 anesthesia claims. EXPOSURES: Temporal variation in facility-level exposure to PMC contracts for anesthesia services. MAIN OUTCOMES AND MEASURES: Main outcomes were (1) allowed amounts and the unit price (allowed amounts standardized per unit of service) paid to anesthesia practitioners; and (2) the probability that a practitioner was out of network. RESULTS: From before to after the PMC contract period, allowed amounts increased by 16.5% (+$116.39; 95% CI, $76.11 to $156.67; P < .001), and the unit price increased by 18.7% (+$18.79; 95% CI, $12.73 to $24.84; P < .001) in PMC facilities relative to non-PMC facilities. Results did not show evidence that anesthesia practitioners were moved out of network (+2.25; 95% CI, -2.56 to 7.06; P < .36). In subsample analyses, PMCs without PE investment increased allowed amounts by 12.9% (+$89.88; 95% CI, $42.07 to $137.69; P < .001), while PE-backed PMCs (representing half of the PMCs in the sample) increased allowed amounts by 26.0% ($187.06; 95% CI, $133.59 to $240.52; P < .001). Similar price increases were observed for unit prices. CONCLUSIONS AND RELEVANCE: In this cohort study, prices paid to anesthesia practitioners increased after hospital outpatient departments and ambulatory surgery centers contracted with a PMC and were substantially higher if the PMC received PE investment. This research provides insights into the role of corporate ownership in health care relevant to policy makers, payers, practitioners, and patients.

Association of Surprise-Billing Legislation with Prices Paid to In-Network and Out-of-Network Anesthesiologists in California, Florida, and New York: An Economic Analysis.

Importance: Several states have passed surprise-billing legislation to protect patients from unanticipated out-of-network medical bills, yet little is known about how state laws influence out-of-network prices and whether spillovers exist to in-network prices. Objective: To identify any changes in prices paid to out-of-network anesthesiologists at in-network facilities and to in-network anesthesiologists before and after states passed surprise-billing legislation. Design, Setting, and Participants: This retrospective economic analysis used difference-in-differences methods to compare price changes before and after the passage of legislation in California, Florida, and New York, which passed comprehensive surprise-billing legislation between January 1, 2014, and December 31, 2017, to 45 states that did not. Commercial claims data from the Health Care Cost Institute were used to identify prices paid to anesthesiologists in hospital outpatient departments and ambulatory surgery centers. The final analytic sample comprised 2 713 913 anesthesia claims across the 3 treated states and the 45 control states. Exposures: Temporal and state-level variation in exposure to surprise-billing legislation. Main Outcomes and Measures: The unit price (allowed amounts standardized per unit of service) paid to out-of-network anesthesiologists at in-network facilities and to in-network anesthesiologists. Results: This retrospective economic analysis of 2 713 913 anesthesia claims found that after surprise-billing laws were passed in 3 states, the unit price paid to out-of-network anesthesiologists at in-network facilities decreased significantly in 2 of them: California, -$12.71 (95% CI, -$25.70 to -$0.27; P = .05) and Florida, -$35.67 (95% CI, -$46.27 to -$25.07; P < .001). In New York, a decline in the overall out-of-network price was not statistically significant (-$7.91; 95% CI, -$17.48 to -$1.68; P = .10); however, by the fourth quarter of 2017, the decline was -$41.28 (95% CI, -$70.24 to -$12.33; P = .01). In-network prices decreased in California by -$10.68 (95% CI, -$12.70 to -$8.66; P < .001); in Florida, -$3.18 (95% CI, -$5.17 to -$1.19; P = .002); and in New York, -$8.05 (95% CI, -$11.46 to -$4.64; P < .001). Conclusions and Relevance: This retrospective study found that prices paid to in-network and out-of-network anesthesiologists in hospital outpatient departments and ambulatory surgery centers decreased after the introduction of surprise-billing legislation, providing early insights into how prices may change under the federal No Surprises Act and in states that have recently passed their own legislation.

Social Determinants of Health and Geographic Variation in Medicare per Beneficiary Spending.

Importance: Despite substantial geographic variation in Medicare per beneficiary spending in the US, little is known about the extent to which social determinants of health (SDoH) are associated with this variation. Objective: To determine the associations between SDoH and county-level price-adjusted Medicare per beneficiary spending. Design, Setting, and Participants: This cross-sectional study used county-level data on 2017 Medicare fee-for-service (FFS) spending, patient demographic characteristics (eg, age and gender) and clinical risk score, supply of health care resources (eg, number of hospital beds), and SDoH measures (eg, median income and unemployment rate) from multiple sources. Multivariable regressions were used to estimate the association of the variation in spending across quintiles with SDoH. Main Outcomes and Measures: 2017 county-level price-adjusted Medicare Parts A and B spending per beneficiary. SDoH measures included socioeconomic position, race/ethnicity, social relationships, and residential and community context. Results: Among 3038 counties with 33 495 776 Medicare FFS beneficiaries (18 352 336 [54.8%] women; mean [SD] age, 72 [1.5] years), mean Medicare price-adjusted per beneficiary spending for counties in the highest spending quintile was $3785 (95% CI, $3706-$3862) higher, or 49% higher, than spending for bottom-quintile counties (mean [SD] spending per beneficiary, $11 464 [735] vs $7679 [522]; P < .001). The total contribution (including through both direct and indirect pathways) of SDoH was 37.7% ($1428 of $3785) of this variation, compared with 59.8% ($2265 of $3785) by patient clinical risk, 14.5% ($549 of $3785) by supply of health care resources, and 19.8% ($751 of $3785) by patient demographic characteristics. When all factors were included within the same model, the direct contribution of SDoH was associated with 5.8% of the variation, compared with 4.6% by supply, 4.7% by patient demographic characteristics, and 62.0% by patient clinical risk. Conclusions and Relevance: These findings suggest social determinants of health are associated with considerable proportions of geographic variation in Medicare spending. Policies addressing SDoH for disadvantaged patients in certain regions have the potential to contain health care spending and improve the value of health care; patient SDoH may need to be accounted for in publicly reported physician performance, and in value-based purchasing incentive programs for health care professionals.

Private Equity In Dermatology: Effect On Price, Utilization, And Spending.

Private equity firms have increasingly acquired physician practices, and particularly dermatology practices. Analyzing commercial claims from the Health Care Cost Institute (2012-17), we used a difference-in-differences design within an event study framework to estimate the prevalence of private equity acquisitions and their impact on dermatologist prices, spending, utilization, and volume of patients. By 2017 one in eleven dermatologists practiced in a private equity-owned practice, and private equity-owned practices employed four advanced practitioners for every ten dermatologists compared with three for non-private equity practices. Private equity firms targeted their acquisitions at larger practices that saw more commercially insured patients compared with practices that were never acquired by private equity firms. The volume of patients per private equity dermatologist ranged from 4.7 percent to 17.0 percent higher than the volume per non-private equity dermatologist up to nine quarters after acquisition. At 1.5 years after acquisition, prices paid to private equity dermatologists for routine medical visits were 3-5 percent higher than those paid to non-private equity dermatologists. There was no significant consistent impact on dermatology spending or use of biopsies, lesion destruction, or Mohs surgery. Policy makers and dermatology practice leaders may want to track the rapidly evolving phenomenon of private equity acquisitions.

Association of Private Equity Investment in US Nursing Homes With the Quality and Cost of Care for Long-Stay Residents.

Importance: Private equity firms have been acquiring US nursing homes; an estimated 5% of US nursing homes are owned by private equity firms. Objective: To examine the association of private equity acquisition of nursing homes with the quality and cost of care for long-stay residents. Design Setting and Participants: In this cohort study of 302 private equity nursing homes with 9632 residents and 9562 other for-profit homes with 249 771 residents, a novel national database of private equity nursing home acquisitions was merged with Medicare claims and Minimum Data Set assessments for the period from 2012 to 2018. Changes in outcomes for residents in private equity-acquired nursing homes were compared with changes for residents in other for-profit nursing homes. Analyses were performed from March 25 to June 23, 2021. Exposure: Private equity acquisitions of 302 nursing homes between 2013 and 2017. Main Outcomes and Measures: This study used difference-in-differences analysis to examine the association of private equity acquisition of nursing homes with outcomes. Primary outcomes were quarterly measures of emergency department visits and hospitalizations for ambulatory care-sensitive (ACS) conditions and total quarterly Medicare costs. Antipsychotic use, pressure ulcers, and severe pain were examined in secondary analyses. Results: Of the 259 403 residents in the study (170 687 women [65.8%]; 211 154 White residents [81.4%]; 204 928 residents [79.0%] dually eligible for Medicare and Medicaid; mean [SD] age, 79.3 [5.6] years), 9632 residents were in 302 private equity-acquired nursing homes and 249 771 residents were in 9562 other for-profit homes. The mean quarterly rate of ACS emergency department visits was 14.1% (336 072 of 2 383 491), and the mean quarterly rate of ACS hospitalizations was 17.3% (412 344 of 2 383 491); mean (SD) total quarterly costs were $8050.00 ($9.90). Residents of private equity nursing homes experienced relative increases in ACS emergency department visits of 11.1% (1.7 of 15.3; 1.7 percentage points; 95% CI, 0.3-3.0 percentage points; P = .02) and in ACS hospitalizations of 8.7% (1.0 of 11.5; 1.0 percentage point; 95% CI, 0.2-1.1 percentage points; P = .003) compared with residents in other for-profit homes; quarterly costs increased 3.9% (270.37 of 6972.04; $270.37; 95% CI, $41.53-$499.20; P = .02) or $1081 annually per resident. Private equity acquisition was not significantly associated with antipsychotic use (-0.2 percentage points; 95% CI, -1.7 to 1.4 percentage points; P = .83), severe pain (0.2 percentage points; 95% CI, -1.1 to 1.4 percentage points; P = .79), or pressure ulcers (0.5 percentage points; 95% CI, -0.4 to 1.3 percentage points; P = .30). Conclusions and Relevance: This cohort study with difference-in-differences analysis found that private equity acquisition of nursing homes was associated with increases in ACS emergency department visits and hospitalizations and higher Medicare costs.

Comparative Performance of Private Equity-Owned US Nursing Homes During the COVID-19 Pandemic.

Importance: It is not known whether nursing homes with private equity (PE) ownership have performed better or worse than other nursing homes during the coronavirus disease 2019 (COVID-19) pandemic. Objective: To evaluate the comparative performance of PE-owned nursing homes on COVID-19 outcomes. Design, Setting, and Participants: This cross-sectional study of 11 470 US nursing homes used the Nursing Home COVID-19 Public File from May 17, 2020, to July 2, 2020, to compare outcomes of PE-owned nursing homes with for-profit, nonprofit, and government-owned homes, adjusting for facility characteristics. Exposure: Nursing home ownership status. Main Outcomes and Measures: Self-reported number of COVID-19 cases and deaths and deaths by any cause per 1000 residents; possessing 1-week supplies of personal protective equipment (PPE); staffing shortages. Results: Of 11 470 nursing homes, 7793 (67.9%) were for-profit; 2523 (22.0%), nonprofit; 511 (5.3%), government-owned; and 543 (4.7%), PE-owned; with mean (SD) COVID-19 cases per 1000 residents of 88.3 [2.1], 67.0 [3.8], 39.8 [7.6] and 110.8 [8.1], respectively. Mean (SD) COVID-19 deaths per 1000 residents were 61.9 [1.6], 66.4 [3.0], 56.2 [7.3], and 78.9 [5.9], respectively; mean deaths by any cause per 1000 residents were 78.1 [1.3], 91.5 [2.2], 67.6 [4.5], and 87.9 [4.8], respectively. In adjusted analyses, government-owned homes had 35.5 (95% CI, -69.2 to -1.8; P = .03) fewer COVID-19 cases per 1000 residents than PE-owned nursing homes. Cases in PE-owned nursing homes were not statistically different compared with for-profit and nonprofit facilities; nor were there statistically significant differences in COVID-19 deaths or deaths by any cause between PE-owned nursing homes and for-profit, nonprofit, and government-owned facilities. For-profit, nonprofit, and government-owned nursing homes were 10.5% (9.1 percentage points; 95% CI, 1.8 to 16.3 percentage points; P = .006), 15.0% (13.0 percentage points; 95% CI, 5.5 to 20.6 percentage points; P < .001), and 17.0% (14.8 percentage points; 95% CI, 6.5 to 23.0 percentage points; P < .001), respectively, more likely to have at least a 1-week supply of N95 masks than PE-owned nursing homes. They were 24.3% (21.3 percentage points; 95% CI, 11.8 to 30.8 percentage points; P < .001), 30.7% (27.0 percentage points; 95% CI, 17.7 to 36.2 percentage points; P < .001), and 29.2% (25.7 percentage points; 95% CI, 16.1 to 35.3 percentage points; P < .001) more likely to have a 1-week supply of medical gowns than PE-owned nursing homes. Government nursing homes were more likely to have a shortage of nurses (6.9 percentage points; 95% CI, 0.0 to 13.9 percentage points; P = .049) than PE-owned nursing homes. Conclusions and Relevance: In this cross-sectional study, PE-owned nursing homes performed comparably on staffing levels, resident cases, and deaths with nursing homes with other types of ownership, although their shortages of PPE may warrant monitoring.