Operators in triple-net lease arrangements should be aware that CMS’s proposed ownership transparency rules may require disclosure of REIT relationships that are not currently captured in the Provider Enrollment, Chain, and Ownership System.
The Role Of Real Estate Investment Trusts In Staffing US Nursing Homes
“After REIT investment, nursing homes had increases in LPN and CNA staffing of 0.02 (2.15 percent) and 0.05 (1.94 percent) hours per resident day respectively… REIT nursing homes may substitute relatively inexpensive LPN and CNA care in place of more expensive RN care. More investigation is needed to clarify how changes in staffing after REIT investment affect nursing home quality of care.”—
Braun, Robert Tyler, et al. “The Role Of Real Estate Investment Trusts In Staffing US Nursing Homes.” Health Affairs, vol. 42, no. 2, 25 Jan. 2023. https://doi.org/10.1377/hlthaff.2022.00278
Robust Ownership Data Could Drive Healthier Nursing Home Deals: Study Author
“There should be more detailed and audited information about finances, operation and ownership of nursing homes,” Stevenson said in support of the proposed rule. “Real estate investment trust investment, we feel, should be part of that in addition to private equity ownership. It’s not only about transparency for the sake of transparency. It helps to see where payments are going. It helps to understand planning better. In addition, it also helps to understand accountability and to be able to look at trends.”
— McKnight’s Long-Term Care, March 21, 2023
SNF Staffing Shifts After REIT Acquisition, Study Shows
“What we see is on the aggregate [is] increases of about 2.15% in licensed practical nurse hours per resident, and then we see about a 1.55% increase in hours per day for certified nursing assistants, and then we see about a 3.31% decrease for registered nurses… if you were to actually extrapolate that out by year and look at the changes by year and not just in a pre/post period, it can actually get a little more telling. And what we see is that years two and three after acquisition, we see decreases of about 6.25%.”
— McKnight’s Senior Living, March 21, 2023
REIT Ownership Linked to Decline in RN Staffing, Increases in LPN, CNA Use
“Nursing homes, after being purchased by a real estate investment trust, are likely to see increases in licensed practical nurse and certified nursing assistant staff hours per resident day of 2.15% and 1.55%, respectively. Also, registered nursing staffing can decrease by as much as 6.25% in two to three years after the investment.”
— McKnight’s Senior Living, January 27, 2023
REIT Ownership of Nursing Homes Linked to Changes in Clinical Staffing Patterns
“Private equity acquisitions of nursing homes have received considerable attention from policymakers, yet REITs have a larger presence in the industry and have received less attention. An estimated 5% of nursing homes are tied to private equity ownership; about 12% have REIT ownership, according to the study.”
— Skilled Nursing News, January 25, 2023
