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Virginia Legal News

GAO report finds that private equity firms hide nursing home ownership


Posted on Oct 30, 2010

One thing that happens when a nursing home is found to have deficiencies in care is that the owners of the home are held accountable.  This is especially true in cases of abuse or neglect, when a lawsuit may be brought against a staff member, manager, and the owners or operators of the facility.

 

But what happens when you don’t know who really owns the nursing home?  Believe it or not, this is already the case for hundreds of homes across the U.S.  A recent GAO report has found that of 1,876 nursing homes in the country, a good portion are owned by private equity firms that purchased the homes in such a way that they can’t be found as the owner.

 

It turns out that over the last 12 years or so 10 large private equity firms have acquired a large number of nursing homes for investment purposes.  The finding that several of the firms have found ways to hide their ownership role is troubling lawmakers.

 

The GAO has recommended that the reporting structure for nursing home ownership be made more understandable, so that when issues arise the right individuals can be held accountable.  Private equity firms shouldn’t be able to collect profits from Virginia nursing homes without being ensuring that the elderly residents in their care are safe from abuse and neglect.

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