Sen. Dawn Euer has introduced legislation to increase the financial transparency of nursing homes and their business partners and ensure that public funds are used efficiently to improve patient care and staff conditions.
“This bill is really about the stability of our nursing homes. Recently we’ve heard from many sources that in order to sustain our nursing facilities and improve patient care, reimbursement rates need to increase. I agree, but also we are dumping money into this system that we cannot account for, and as we increase rates we need to ensure that those funds are actually going to be staying in those facilities to improve quality of care and that they are not funneled to related entities for the benefit of shareholders and related business interests,” said Senator Euer (D-District 13, Newport, Jamestown).
A 2024 study from the National Bureau of Economic Research describes an industry practice known as “tunneling,” in which nursing homes and other health care providers covertly divert profits by making payments for goods and services at inflated prices to businesses they have a financial interest in. The study estimated that in 2019, 68 percent of nursing home profits nationwide were funneled in this manner to related parties at inflated transfer prices.
The Nursing Home Financial Transparency Act (2025-S 0704) aims to end this practice in Rhode Island. It would require these individuals or business entities who have ownership interests in nursing and long-term-care facilities to report to the Department of Human Services detailed statements of any such transactions they made with these facilities, along with an affidavit assuring that the transactions were conducted at no more than fair market value. They would also be required to report other basic financial information, including balance sheets and statements of cash flows. These reports would also be accessible to the public.
Over $400 million of Rhode Island’s 2025 fiscal year budget was allocated to nursing homes and long-term-care facilities.
“This bill carries forward Senator Maryellen Goodwin’s legacy by demanding transparency from the out-of-state, for-profit chains that now operate the majority of Rhode Island’s nursing homes. These companies routinely funnel millions of taxpayer dollars into related-party entities they also control—like real estate, staffing and management firms—while claiming poverty and shortchanging resident care. This bill, based on national best practices, gives Rhode Island the tools to follow the money and ensure public funds are actually used to support safe staffing and high-quality care—not corporate profit schemes,” said Alex Moore, political director of SEIU 1199NE.
In 2022, Rhode Island passed a law (2022-S 3034) introduced by Sen. Maryellen Goodwin which requires nursing home operators to report to the Department of Health all parties who have direct or indirect ownership in the land, building, mortgage, trust, or lease of the nursing home facility. This information is available to the public on request from the Department of Health. Senator Euer’s bill would continue to improve transparency by extending reporting rules to businesses the nursing home’s owners have a financial interest in.
“This bill is opposed by representatives of the nursing home industry, but ultimately, it is necessary to save our nursing home industry. Without more financial transparency and regulation for nursing homes owned by investor groups, private equity and corporations, those entities will take over all of our nursing homes and put independents and nonprofits out of business. We cannot apply laws and regulations only to facilities owned by predatory entities, so unfortunately that means the nonprofits and independents will need to submit to a little more transparency. A small sacrifice to make, we contend, in order to prevent any more of our best facilities going out of business,” said Kathleen Gerard, director of Advocates for Better Care in Rhode Island.
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