Washington Watch: EB-5 In Peril, Assisted Living Industry Breathes Easier

A flurry of news has come out of the nation’s capital this week with implications—some positive, some less so—for the senior housing industry.

Specifically, a U.S. Senator pushed to kill the EB-5 visa program, which is utilized by some senior housing developers. Also, the Centers for Medicare & Medicaid Services (CMS) pushed back the compliance date for a rule on home- and community-based services, to the relief of an assisted living association. And there were signs that CMS might be backtracking on an arbitration agreement ban in skilled nursing facilities (SNFs).

EB-5 in the Crosshairs


On Monday, Sen. Dianne Feinstein (D-CA) called for the EB-5 visa program to end, citing conflicts of interest with the Trump White House. The EB-5 program grants visas to foreign investors who commit a certain dollar amount to development projects in the United States, and has been used as a source of funding for some senior housing construction.

President Donald Trump and his son-in-law Jared Kushner have used EB-5 financing for development projects, The Hill reported. More recently, Kushner’s sister gave a presentation to Chinese real estate investors in which she presented her access to the highest reaches of the White House as a positive.

“Given that President Trump and Jared Kushner refuse to divest from their vast financial holdings,” Feinstein said, “the only way to eliminate this conflict is for Congress to allow the program to expire in September.”


September is when the funding would run out.

The EB-5 program has come under attack from lawmakers in the past. They have cited fraud and abuse, and pointed out that most of the capital has gone toward high-end projects in dense urban markets, rather than stimulating poor and rural areas.

More Time on HCBS

As part of a larger push to move people from skilled nursing facilities (SNFs) and other institutional settings into home- or community-based services (HCBS), CMS in 2014 issued a final rule defining what constitutes an HCBS setting in the Medicaid program. 

There has been subsequent confusion and concern over whether assisted living facilities qualify as HCBS settings under the rule. If they are not, it could mean that anyone paying for assisted living through Medicaid would have to relocate.

On Tuesday, CMS pushed back the compliance date on this rule from March 17, 2019, to March 17, 2022.

“[The National Center for Assisted Living] appreciates the flexibility CMS is granting states to make certain that implementation of the HCBS Final Rule is accomplished in a thoughtful, collaborative way,” NCAL Executive Director Scott Tittle said in a statement. “We must get this rule right to ensure that assisted living remains a home and community-based option for vulnerable seniors who rely on Medicaid and consider these communities to be their home. NCAL looks forward continuing this conversation with CMS and states.”

Arbitration Agreements Safe?

Near the end of the Obama administration, CMS issued a rule banning arbitration agreements in Medicare-certified long-term care settings. There has been ongoing pushback over this pending rule, and now this provision might be going away entirely.

At a meeting with consumer and industry groups last week, CMS officials “hinted” that they favor allowing arbitration agreements to continue to be used by SNFs, Modern Healthcare reported

The meeting occurred as the White House Office of Management and Budget is in the process of reviewing a new proposed rule on arbitration agreements. CMS and OMB officials have not commented on what that proposed rule specifically states.

Officials with the American Health Care Association (AHCA), the largest skilled nursing provider association in the country, were at the recent meeting, according to Modern Healthcare. AHCA lodged a legal challenge against the arbitration ban, and has argued that they are a necessary protection for SNFs and an effective, less costly alternative to litigation. 

Written by Tim Mullaney

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