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New Hospital, Nursing Home Acquisition Data Aim to Curb Fraud

April 20, 2022, 2:14 PM

New federal data show 348 hospitals and more than 3,200 nursing homes changed ownership between 2016 and 2021, with medium and larger hospitals and those with negative profit margins among the most likely to be sold.

The new dataset released Wednesday by the Centers for Medicare & Medicaid Services will be updated quarterly and is part of a Biden administration push for greater transparency in the health-care industry to help curb waste, fraud, and abuse in federal health programs. The data also are intended to shine a light on how mergers might squash competition and make access to care more expensive.

“Because individual facilities found to have improper billing practices may be part of organizational patterns of improper practices, better data on the owner and management relationships of health care facilities could improve oversight,” according to a new HHS report about the data. “Having credible, accurate, and up-to-date ownership information could therefore safeguard Medicare and Medicaid payments and patients.”

Hospital and nursing facility consolidation leaves many underserved areas with inadequate or more expensive health care options,” CMS Administrator Chiquita Brooks-LaSure said in a statement.

“This new data gives researchers, state and federal enforcement agencies, and the public new opportunities to examine how mergers, acquisitions, consolidations, and changes of ownership impact access to care, care quality, and prices as a way to enable greater transparency and insight into the hospital and nursing home industries,” she said.

Nationally, 4.6% of the nation’s hospitals were sold over the full six-year study period. Rates varied widely by state, with the highest rate of hospital ownership changes occurring in South Carolina, where 14 of its 73 hospitals (19.2%) were sold over the six-year period. Kentucky, New Jersey, and Connecticut also had hospital ownership-change rates above 10%, while most states had rates of 4% or lower.

More than 85% of purchased hospitals had a single direct organizational owner, compared to 62.3% of purchased nursing homes. Among nursing homes that were sold, only 18.2% went to individual owners.

These new data support President Joe Biden’s goal of improving transparency around nursing home ownership and improving safety and quality in the facilities.

To contact the reporter on this story: Tony Pugh in Washington at tpugh@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com

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