“The government tries to make sure homes are paying a fair market value for things like rent and consulting and supplies,” said John Villegas-Grubbs, a Medicaid expert who has developed payment systems for several states. “But when home owners pay themselves without revealing it, they can pad their bills. It’s not feasible to expect regulators to catch that unless they have transparency on ownership structures.”

Formation and Warburg Pincus both declined to discuss disclosure issues.

Groups lobbying to increase transparency at nursing homes say complicated corporate structures should be outlawed. One idea popular among organizations like the National Citizens’ Coalition for Nursing Home Reform is requiring the company that owns a home’s most valuable assets, its land and building, to manage it. That would put owners at risk if care declines.

But owners say that tying a home’s property to its operation would make it impossible to operate in leased facilities, and exacerbate a growing nationwide nursing home shortage.

Moreover, investors say, they deserve credit for rebuilding an industry on the edge of widespread insolvency.

“Legal and regulatory costs were killing this industry,” said Mr. Whitman, the Formation executive.

For instance, Beverly Enterprises, which also had a history of regulatory problems, sold Habana and the rest of its Florida centers to Formation because, it said at the time, of rising litigation costs. AON Risk Consultants, a research company, says the average cost of nursing home litigation in Florida during that period had increased 270 percent in five years.

“Lawyers were suing nursing homes because they knew the companies were worth billions of dollars, so we made the companies smaller and poorer, and the lawsuits have diminished,” Mr. Whitman said. This year, another fund affiliated with Mr. Whitman and other investors acquired the nation’s third-largest nursing home chain, Genesis HealthCare, for $1.5 billion.

If investors are barred from setting up complex structures, “this industry makes no economic sense,” Mr. Whitman said. “If nursing home owners are forced to operate at a loss, the entire industry will disappear.”

However, advocates for nursing home reforms say investors exaggerate the industry’s precariousness. Last year, Formation sold Habana and 185 other facilities to General Electric for $1.4 billion. A prominent nursing home industry analyst, Steve Monroe, estimates that Formation’s and its co-investors’ gains from that sale were more than $500 million in just four years. Formation declined to comment on that figure.