Sen. Elizabeth Warren (D-Mass.) will reintroduce a bill cracking down on exploitative private equity practices in the health-care industry, with fellow Democrats as co-sponsors.
The Corporate Crimes Against Health Care Act, which will be reintroduced Wednesday, would create new criminal and civil penalties for executives and owners of health-care firms if their financial management leads to patient harm or the collapse of the provider.
Warren first introduced the bill in June 2024. The latest version includes co-sponsors Sen. Jeff Merkley (D-Ore.), Sen. Ed Markey (D-Mass.) Sen. Peter Welch (D-Vt.), and Sen. Richard Blumenthal (D-Conn.)
A companion bill will be introduced to the House by Rep. Maggie Goodlander (D-N.H.).
Warren highlighted the bankruptcies of Steward Health Care System LLC and Genesis Healthcare Inc., both of which prompted concerns from Democratic lawmakers about private equity’s expanding role in health care.
“What happened with Genesis is the latest example of why we need to get private equity out of health care,” Warren said in a statement.
The bill comes as concerns over clinical autonomy, competition, and patient access have spurred states to increasingly enact legislation targeted at private equity investment in health care.
The bill proposes prison sentences of one to six years for executives and others whose actions lead to unjust enrichment and result in patient death or injury, and would allow the Justice Department and state attorneys general to recover executive compensation within 10 years of a bankruptcy or facility closure.
Civil penalties of up to five times the amount of a covered party’s compensation clawback would also be allowed under the bill. Recovered funds would be earmarked for employee salary and benefit shortfalls or to support community health-care needs.
The criminal and civil penalties would apply to current and former directors, officers, “control persons,” agents of a private equity firm or the fund itself, as well as shareholders or joint venture partners.
The legislation also restricts real estate investment trusts that participate in sale-leasebacks deals from receiving payments from federal health care programs and removes tax advantages for REIT investors. REIT subsidiaries would also be prevented from exerting influence over the operations of health-care properties.
Health-care providers would be required to disclose comprehensive data related to ownership changes, investor fees, and debt-to-earnings ratios under the bill or face fines of up to $5 million. The bill would also curb dividend recapitalizations and accelerated monitoring fees that prioritize investor returns over operational viability.
The bill would require the Health and Human Services inspector general to conduct a three-year study on the impact of “corporatization” in health care.
To contact the reporter on this story:
To contact the editor responsible for this story: