“A bill to prevent exploitative private equity practices, and for other purposes.”
No CRS summary available for this bill.
This section adds §§671-674 to 18 U.S.C. Chapter 31 to prohibit covered parties (as defined in §674(b)) whose actions contribute to a triggering event—defined as resulting in the death or injury of one or more patients under the care of a target firm—from acquiring covered compensation from that firm by unjust enrichment. It imposes a criminal penalty of imprisonment for 1 to 6 years on violators (§672); a civil penalty of up to 5 times the amount of any required clawback, with proceeds deposited as miscellaneous receipts in the U.S. Treasury (§673); and clawback authority for the Attorney General or a state attorney general to recover all or part of such compensation received by the covered party during the 10 years preceding or succeeding the triggering event (§674(a)). The section authorizes the Attorney General to enforce clawbacks directly, permits state attorneys general to bring parens patriae actions on behalf of state residents (subject to 10-day notice and federal intervention rights), bars parallel state actions during pending federal cases on the same facts, and establishes an affirmative defense if the covered party proves by clear and convincing evidence that it could not have prevented the event; clawed-back funds are deposited into an Attorney General-managed fund prioritized for target firm employee shortfalls (or pensions if bankruptcy is the triggering event) and community health care needs (§674).
This section establishes a new mandatory exclusion under section 1128(a)(5) of the Social Security Act from Medicare, Medicaid, and other federal health care programs (i.e., prohibits payments to) any individual or entity that, on or after the date of enactment, sells assets to or newly pledges assets as collateral for a loan with a real estate investment trust (REIT, as defined in section 856(a) of the Internal Revenue Code). Such exclusion does not apply if the individual or entity agreed to pledge the asset as collateral prior to enactment, including with respect to any future agreement regarding that same asset.
This section repeals the special rule in IRC §856(d)(8)(B) permitting taxable real estate investment trust (REIT) subsidiaries to hold interests in qualified health care properties (i.e., facilities such as hospitals and nursing homes) without being treated as related lessees for purposes of REIT rent qualification requirements. (Thus, such subsidiaries will be subject to standard independent contractor rules limiting related-party rents.) The repeal and conforming amendments to §856(d)(9) apply to taxable years beginning after the date of enactment.
This section eliminates the inclusion of qualified REIT dividends in the combined qualified business income amount under Section 199A(b)(1) of the Internal Revenue Code, limiting that amount to the sum of wage and capital limitations determined under Section 199A(b)(2) for each qualified trade or business. It makes conforming amendments by striking the definition of qualified REIT dividend and related provisions, with the changes applying to taxable years beginning after enactment.
This section requires specified entities (as defined in new SSA §1150D(e)(8)) to submit annual reports to the Secretary of HHS, beginning January 1, 2027 (or within 60 days of formation if later), on (1) mergers, acquisitions, ownership changes, and related transactions (including reasons, control methods, and ownership percentages); (2) names, addresses, and identifiers of affiliated health care providers; (3) business structures of controlling entities, affiliates, subsidiaries, and management services organizations; (4) financial data such as debt-to-earnings ratios, debt incurred, real estate leases and purchases, revenue-sharing arrangements, investor fees or dividends, nonprofit capital gains investments, and controlling entity details; (5) value of quality or performance-based payments (e.g., under Medicare shared savings); (6) changes in affiliated providers; (7) foreign domicile and registration of controlling entities or subsidiaries; and (8) other ownership or control information as specified by the Secretary. The section further directs the Secretary to post reported information publicly beginning January 1, 2028 (without disclosing individual Social Security numbers); conduct annual compliance audits via random sampling; impose civil monetary penalties of up to $5 million per incomplete or false report (modeled on SSA §1128A); exempt reporting from the Paperwork Reduction Act; and define "control" as direct or indirect power to vote more than 5% of voting securities or direct entity actions, with a "controlling entity" as a parent or other entity owning or controlling the specified entity. (Thus, the provision promotes transparency into health care consolidation, private equity involvement, and system finances, with duplicate reporting avoided for entities controlled by certain investors.)
This section directs the Inspector General of the Department of Health and Human Services (HHS) to evaluate profit-driven practices (i.e., cost-cutting and revenue-enhancing practices) in health care delivery and submit a report to Congress on the results not later than three years after enactment. The study must assess (1) specified practices such as overbilling or up-coding, executive compensation tied to revenue or productivity, staff reductions, service mix changes for revenue maximization, insurer efforts to restrict care access (e.g., prior authorization), and evasion of state corporate practice of medicine laws; (2) impacts on patient care quality, safety, and outcomes; health care personnel well-being; Medicare, Medicaid, Veterans Affairs health care, Federal Employees Health Benefits (FEHB) program, Affordable Care Act (ACA) Exchanges (i.e., state-based health insurance marketplaces), and group health plans/insurance; (3) financial returns to investors and other entities; and (4) adequacy of federal fraud and abuse policies amid health care consolidation, including financial transparency, enforcement resources, and penalties.