Should Special Rules Apply for “Private Equity” Investments in Nursing Homes?
Genesis HealthCare’s latest, complicated round in Bankruptcy proceedings began in July 2025 with a Chapter 11 petition that includes — but certainly isn’t limited to — eleven nursing homes in the state of Maine. The nursing home operations have reportedly involved significant investment by private equity, including real estate investment trusts (REITs). One news article in Maine reports on August 12, that the financing approach involves a “rent-and-leaseback model, common in private equity-driven health care.”
The Genesis company previously restructured with the assistance of Bankruptcy Court proceedings in 2021, and the latest filing reports debts “between $1 billion and $10 billion.”
Opponents of private equity investment in critical health care industries have proposed legislative restrictions. See, for example, LD 985, passed in Maine in June, 2025 in the for of “An Act to Impose a Moratorium on the Ownership or Operation of Hospitals in the State by Private Equity Companies or Real Estate Investment Trusts.”
Studies of the impact of private equity on nursing home care have “suggested” that the business models used for long-term care are “fundamentally misaligned with the mission of the nursing homes” for care of vulnerable persons. See e.g.. the Issue Brief on “The Impact of Private Equity on Nursing Home Care: Recommendations for Policymakers,” by Melea Atkins published in April 2021 with research support from the Roosevelt Institute.
At a minimum, there is a push/pull that attaches to private equity investment that saw its popularity soar in the heady days before and perhaps even after the financial meltdown of 2008-2010. After all, for essential industries, oversight agencies recognize that “more” money is required to solve problems and private equity initially offers that additional pot of cash. (Mostly) Gone are the days of county-run public nursing homes too often associated with bare bones care. But, CMS — before Trump — attempted to strengthen rules about ownership of long-term care facilities with a specific eye on private equity. And at what point is “more” money, if in the form of an investment structure that demands high returns. as much the problem as it is any means to a solution?