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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4503 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 4503

    To prevent exploitative private equity practices, and for other 
                               purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 11, 2024

Ms. Warren (for herself and Mr. Markey) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
    To prevent exploitative private equity practices, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Corporate Crimes Against Health Care 
Act''.

SEC. 2. UNJUST ENRICHMENT CLAWBACK AUTHORITY AND CRIMINAL PENALTY.

    (a) Unjust Enrichment Clawback.--Chapter 31 of title 18, United 
States Code, is amended by adding at the end the following:
``Sec. 671. Unjust enrichment clawback and criminal penalty
    ``(a) Prohibited Conduct.--Any covered party whose actions 
contributed to a triggering event that results in the death or injury 
of a patient or patients under the care of the target firm, shall be 
punished in accordance with sections 672 and 673.
``Sec. 672. Criminal penalty
    ``Whoever violates section 671 shall be imprisoned for not less 
than 1 year or greater than 6 years.
``Sec. 673. Civil penalty
    ``(a) Amount of Penalty.--Whoever violates section 671 shall be 
subject to a civil penalty in an amount of not more than 5 times the 
amount of any clawback authorized under section 674.
    ``(b) Deposit.--Any amount of civil penalty collected under this 
section shall be deposited as miscellaneous receipts in the Treasury of 
the United States.
``Sec. 674. Clawback
    ``(a) In General.--
            ``(1) Prohibition.--It shall be unlawful for any covered 
        party to acquire from a target firm covered compensation by 
        unjust enrichment, and any such covered party shall be subject 
        to the penalties described in sections 672 and 673 in addition 
        to the required clawbacks under this section.
            ``(2) Penalty.--
                    ``(A) Required clawbacks.--If a target firm 
                experiences a triggering event, the Attorney General or 
                a State attorney general may claw back all or part of 
                the covered compensation received by the covered party 
                that is obtained from the target firm during the 
                preceding or succeeding 10 years.
                    ``(B) Actions to recover required clawbacks.--
                            ``(i) Powers of the attorney general.--
                                    ``(I) In general.--Except as 
                                provided in clause (ii), the Attorney 
                                General may enforce this section.
                                    ``(II) Authority preserved.--
                                Nothing in this section shall be 
                                construed to limit the authority of the 
                                Attorney General under any provision of 
                                law.
                                    ``(III) Penalty.--In an action 
                                brought by the Attorney General to 
                                enforce this section and the 
                                regulations promulgated under this 
                                section, a covered party shall be 
                                liable for all or part of the covered 
                                compensation received by the covered 
                                party that is obtained from the target 
                                firm during the preceding or succeeding 
                                10 years.
                            ``(ii) Enforcement by state attorneys 
                        general.--
                                    ``(I) Civil action.--If an attorney 
                                general of a State has reason to 
                                believe that a triggering event has 
                                harmed the residents of that State, the 
                                attorney general of the State may, as 
                                parens patriae, bring a civil action on 
                                behalf of the residents of the State in 
                                an appropriate district court of the 
                                United States to recover all or part of 
                                the covered compensation received by 
                                the covered party that is obtained from 
                                the target firm during the preceding or 
                                succeeding 10 years.
                                    ``(II) Rights of the attorney 
                                general.--
                                            ``(aa) Notice to attorney 
                                        general.--

                                                    ``(AA) In 
                                                general.--Except as 
                                                provided in subitem 
                                                (CC), the attorney 
                                                general of a State 
                                                shall notify the 
                                                Attorney General in 
                                                writing that the 
                                                attorney general of the 
                                                State intends to bring 
                                                a civil action under 
                                                subclause (I) not later 
                                                than 10 days before 
                                                initiating the civil 
                                                action.

                                                    ``(BB) Contents.--
                                                The notification 
                                                required under subitem 
                                                (AA) with respect to a 
                                                civil action shall 
                                                include a copy of the 
                                                complaint to be filed 
                                                to initiate the civil 
                                                action.

                                                    ``(CC) Exception.--
                                                If it is not feasible 
                                                for the attorney 
                                                general of a State to 
                                                provide the 
                                                notification required 
                                                by subitem (AA) before 
                                                initiating an action 
                                                under subclause (I), 
                                                the attorney general of 
                                                the State shall notify 
                                                the Attorney General 
                                                immediately upon 
                                                instituting the civil 
                                                action.

                                            ``(bb) Intervention by the 
                                        attorney general.--The Attorney 
                                        General may--

                                                    ``(AA) intervene in 
                                                any action brought by 
                                                the attorney general of 
                                                a State under subclause 
                                                (I); and

                                                    ``(BB) upon 
                                                intervening under 
                                                subitem (aa), be heard 
                                                on all matters arising 
                                                in the civil action and 
                                                file petitions for 
                                                appeal of a decision in 
                                                the action.

                            ``(iii) Limitation on state action while 
                        federal action is pending.--If the Attorney 
                        General institutes an action under clause (i) 
                        with respect to a triggering event, a State may 
                        not, during the pendency of that action, 
                        institute an action under clause (ii) against 
                        any defendant named in the complaint in the 
                        action instituted by the Attorney General based 
                        on the same set of facts giving rise to the 
                        triggering event with respect to which the 
                        Attorney General instituted the action.
                            ``(iv) Affirmative defense.--It shall be an 
                        affirmative defense in an action under this 
                        section if the applicable covered party shows 
                        by clear and convincing evidence that the 
                        covered party could not prevent the triggering 
                        event.
                    ``(C) Deposit.--
                            ``(i) In general.--Subject to clause (ii), 
                        any covered compensation clawed back in an 
                        action under this section shall be deposited in 
                        a fund created by the Attorney General and 
                        distributed by the Attorney General, in the 
                        interests of justice--
                                    ``(I) to cover shortfalls in the 
                                salaries, employee benefit plans, or 
                                other benefits owed to current or past 
                                employees of the target firm negatively 
                                affected by the behavior that is the 
                                basis of the action; and
                                    ``(II) to be put to use in the 
                                interest of serving the health care 
                                needs of the harmed community.
                            ``(ii) Bankruptcy as a triggering event.--
                        Notwithstanding any other provision of law, if 
                        the entry of an order for relief under title 11 
                        or the commencement of any other insolvency 
                        proceeding is the triggering event that a 
                        target firm experiences, the Attorney General 
                        shall prioritize covering funding shortfalls in 
                        any pension funds benefitting harmed current or 
                        past employees of the target firm.
    ``(b) Definitions.--In this section:
            ``(1) Affiliate.--The term `affiliate' means--
                    ``(A) a person that directly or indirectly owns, 
                controls, or holds with power to vote, 5 percent or 
                more of the outstanding voting securities of another 
                entity, other than a person that holds such 
                securities--
                            ``(i) in a fiduciary or agency capacity 
                        without sole discretionary power to vote such 
                        securities; or
                            ``(ii) solely to secure a debt, if such 
                        entity has not in fact exercised such power to 
                        vote;
                    ``(B) a corporation 10 percent or more of whose 
                outstanding voting securities are directly or 
                indirectly owned, controlled, or held with power to 
                vote, by another entity (referred to in this 
                subparagraph as a `covered entity'), or by an entity 
                that directly or indirectly owns, controls, or holds 
                with power to vote, 10 percent or more of the 
                outstanding voting securities of the covered entity, 
                other than an entity that holds such securities--
                            ``(i) in a fiduciary or agency capacity 
                        without sole discretionary power to vote such 
                        securities; or
                            ``(ii) solely to secure a debt, if such 
                        entity has not in fact exercised such power to 
                        vote;
                    ``(C) a person whose business is operated under a 
                lease or operating agreement by another entity, or 
                person substantially all of whose property is operated 
                under an operating agreement with that other entity; or
                    ``(D) an entity that operates the business or 
                substantially all of the property of another entity 
                under a lease or operating agreement.
            ``(2) Change in control.--The term `change in control' 
        means a change in a legal right with respect to--
                    ``(A) the power to vote more than 50 per centum of 
                any class of voting securities of a corporation that 
                engages in interstate commerce; or
                    ``(B) any lesser per centum of any class of voting 
                securities of a corporation that engages in interstate 
                commerce that is sufficient to make the acquirer of 
                such an interest a person that has the ability to 
                direct the actions of that corporation.
            ``(3) Control person.--The term `control person'--
                    ``(A) means--
                            ``(i) a person--
                                    ``(I) that directly or indirectly 
                                owns, controls, or holds with power to 
                                vote, including through coordination 
                                with other persons, 10 percent or more 
                                of the outstanding voting interests of 
                                a corporation; or
                                    ``(II) that operates the business 
                                or substantially all of the property of 
                                a corporation under a lease or an 
                                operating or management agreement;
                            ``(ii) a corporation, other than a target 
                        firm, that has 10 percent or more of its 
                        outstanding voting interests directly or 
                        indirectly owned, controlled, or held with 
                        power to vote by a person that directly or 
                        indirectly owns, controls, or holds with power 
                        to vote, including through coordination with 
                        other persons, 10 percent or more of the 
                        outstanding voting interests of another 
                        corporation; or
                            ``(iii) a person that otherwise has the 
                        ability to direct the actions of a corporation; 
                        and
                    ``(B) does not include a person that--
                            ``(i)(I) is a limited partner with respect 
                        to a controlling private fund that is a 
                        partnership;
                            ``(II) does not participate in the 
                        direction of the management or policy of a 
                        corporation; and
                            ``(III) is not an insider with respect to 
                        the controlling private fund described in 
                        subclause (I);
                            ``(ii) is a pension fund or employee 
                        welfare benefit plan, if neither the fund nor 
                        plan (as applicable), nor any beneficiary or 
                        affiliate of the benefit or plan, is an insider 
                        with respect to a controlling private fund; or
                            ``(iii) holds the voting interests of a 
                        corporation solely--
                                    ``(I) in a fiduciary or agency 
                                capacity without sole discretionary 
                                power to vote the securities; or
                                    ``(II) to secure a debt, if the 
                                person has not--
                                            ``(aa) exercised the power 
                                        to vote; or
                                            ``(bb) exercised any other 
                                        governance rights with respect 
                                        to the corporation.
            ``(4) Controlling private fund.--The term `controlling 
        private fund' means a private fund that, directly or through an 
        affiliate, becomes a control person with respect to a target 
        firm through the change in control transaction with respect to 
        the target firm.
            ``(5) Corporation.--The term `corporation' means--
                    ``(A) a joint-stock company;
                    ``(B) a company or partnership association 
                organized under a law that makes only the capital 
                subscribed or callable up to a specified amount 
                responsible for the debts of the association, including 
                a limited partnership and a limited liability company;
                    ``(C) a trust; and
                    ``(D) an association having a power or privilege 
                that a private corporation, but not an individual or a 
                partnership, possesses.
            ``(6) Covered compensation.--The term `covered 
        compensation' means--
                    ``(A) salary;
                    ``(B) any bonus;
                    ``(C) any compensation that is granted, earned, or 
                vested based wholly or in part upon the attainment of 
                any financial reporting measure or other performance 
                metric;
                    ``(D) equity-based compensation;
                    ``(E) time- or service-based awards;
                    ``(F) awards based on nonfinancial metrics;
                    ``(G) any monitoring fees, management fees, 
                advisory fees, accelerated monitoring fees, transaction 
                fees, or fees for services not rendered;
                    ``(H) any profits realized from the buying or 
                selling of securities or assets, including any real 
                property;
                    ``(I) any severance pay;
                    ``(J) any golden parachute benefit; or
                    ``(K) any other transaction similar to a 
                transaction described in subparagraph (H) or (I).
            ``(7) Covered party.--The term `covered party' means--
                    ``(A) any current or former director, officer, or 
                control person of, or agent for, a private equity firm 
                or target firm;
                    ``(B) any current or former shareholder or joint 
                venture partner that participates in the conduct of the 
                affairs of a target firm; or
                    ``(C) any private fund.
            ``(8) Employee welfare benefit plan.--The term `employee 
        welfare benefit plan' has the meaning given the term in section 
        3 of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1002).
            ``(9) Insider.--The term `insider' means any--
                    ``(A) director of a corporation;
                    ``(B) officer of a corporation;
                    ``(C) managing agent of a corporation;
                    ``(D) control person with respect to a corporation;
                    ``(E) affiliate of a corporation;
                    ``(F) general partner of a corporation that is a 
                partnership;
                    ``(G) consultant or contractor retained by a 
                corporation;
                    ``(H) affiliate, relative, or agent of a person 
                described in any of subparagraphs (A) through (F); or
                    ``(I) affiliate, relative, or agent of a person 
                described in subparagraph (H).
            ``(10) Interest coverage.--The term `interest coverage' 
        means the revenue of the target firm less the expenses of the 
        target firm, excluding tax and interest, during the most recent 
        fiscal year of the target firm.
            ``(11) Pension fund.--The term `pension fund' has the 
        meaning given the term `pension plan' in section 3 of the 
        Employee Retirement Security Act of 1974 (29 U.S.C. 1002).
            ``(12) Private fund.--The term `private fund' means a 
        corporation that--
                    ``(A) would be considered an investment company 
                under section 3 of the Investment Company Act of 1940 
                (15 U.S.C. 80a-3) but for the application of paragraph 
                (1) or (7) of subsection (c) of that section;
                    ``(B) is not a venture capital fund, as defined in 
                section 275.203(l)-1 of title 17, Code of Federal 
                Regulations, as in effect on the date of enactment of 
                this Act; and
                    ``(C) is not an institution selected under section 
                107 of the Community Development Banking and Financial 
                Institutions Act of 1994 (12 U.S.C. 4706).
            ``(13) Reasonable salary.--The term `reasonable salary' 
        means the amount that would ordinarily be paid for like 
        services by like enterprises under like circumstances.
            ``(14) Relative.--The term `relative' means an individual 
        related by affinity or consanguinity within the third degree as 
        determined by the common law, or individual in a step or 
        adoptive relationship within such third degree.
            ``(15) Security.--The term `security' has the meaning given 
        the term in section 2(a) of the Securities Act of 1933 (15 
        U.S.C. 77b(a)).
            ``(16) Target firm.--The term `target firm' means a health 
        care corporation that is acquired in a change in control 
        transaction.
            ``(17) Triggering event.--The term `triggering event' 
        means--
                    ``(A) any time at which a target firm is behind on 
                salary payments greater than 25 percent of the total 
                workforce of the target firm for a period of more than 
                90 days;
                    ``(B) closure of the target firm;
                    ``(C) if the target firm is behind on rent payments 
                for a period of more than 90 days;
                    ``(D) if the target firm defaults on a loan for a 
                period of more than 90 days; or
                    ``(E) the entry of an order for relief under title 
                11 on behalf of the target firm or the commencement of 
                any other insolvency proceeding.
            ``(18) Unjust enrichment.--The term `unjust enrichment' 
        means the acquisition of covered compensation by a covered 
        party from the target firm during the 10-year period preceding 
        or succeeding a triggering event if any of the following 
        aggravating circumstances are established:
                    ``(A) The covered compensation was obtained through 
                a dividend recapitalization, a sale-leaseback of real 
                estate or equipment, or a related person transaction, 
                as set forth in section 229.404 of title 17, Code of 
                Federal Regulations.
                    ``(B) The covered party has been implicated in any 
                white-collar crime, as defined in section 901 of title 
                I of the Omnibus Crime Control and Safe Streets Act of 
                1968 (34 U.S.C. 10251), committed in the course of the 
                current or former employment of the covered party.
                    ``(C) The covered party has charged the target firm 
                accelerated monitoring fees or fees for services not 
                rendered.
                    ``(D) At the time of the issuance of the covered 
                compensation, or as the result of the issuance of the 
                covered compensation, the target firm had an interest 
                coverage in excess of 100 percent.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 31 of title 18, United States Code, is amended by adding at the 
end the following:

``671. Unjust enrichment clawback and criminal penalty.
``672. Criminal penalty.
``673. Civil penalty.
``674. Clawback.''.

SEC. 3. PROHIBITING PAYMENTS FROM FEDERAL HEALTH CARE PROGRAMS TO 
              ENTITIES THAT SELL ASSETS TO OR USE ASSETS AS COLLATERAL 
              FOR A LOAN WITH A REAL ESTATE INVESTMENT TRUST.

    Section 1128(a) of the Social Security Act (42 U.S.C. 1320a-7(a)) 
is amended by adding at the end the following new paragraph:
            ``(5) Selling assets to or using assets as collateral for a 
        loan with a real estate investment trust.--
                    ``(A) In general.--Any individual or entity that, 
                on or after the date of enactment of this paragraph, 
                sells any assets to, or newly pledges any assets as 
                collateral for a loan with, a real estate investment 
                trust (as defined in section 856(a) of the Internal 
                Revenue Code of 1986).
                    ``(B) Clarification.--Subparagraph (A) shall not 
                apply in the case where an individual or entity agreed 
                to pledge an asset as collateral for a loan with a real 
                estate investment trust prior to the date of enactment 
                of this paragraph, including with respect to any future 
                agreement between the individual or entity and the real 
                estate investment trust regarding that same asset.''.

SEC. 4. REPEAL OF SPECIAL RULE FOR TAXABLE REIT SUBSIDIARIES WITH 
              INTERESTS IN CERTAIN HEALTH CARE PROPERTY.

    (a) In General.--Section 856(d)(8)(B) of the Internal Revenue Code 
of 1986 is amended--
            (1) by striking ``or a qualified health care property (as 
        defined in subsection (e)(6)(D)(i))'', and
            (2) by striking ``qualified health care property or''.
    (b) Conforming Amendments.--Section 856(d)(9) of such Code is 
amended--
            (1) in subparagraph (A)--
                    (A) by striking ``or a qualified health care 
                property (as defined in subsection (e)(6)(D)(i))'',
                    (B) by striking ``or qualified health care 
                property'', and
                    (C) by striking ``or qualified health care 
                properties'', and
            (2) in subparagraph (B)--
                    (A) by striking ``or qualified health care property 
                (as so defined)'', and
                    (B) by striking ``or qualified health care 
                property'' each place it appears in clauses (i), (ii), 
                and (iii)(II).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 5. ELIMINATION OF QUALIFIED REIT DIVIDENDS FROM QUALIFIED BUSINESS 
              INCOME.

    (a) In General.--Paragraph (1) of section 199A(b) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(1) In general.--The term `combined qualified business 
        income amount' means, with respect to any taxable year, an 
        amount equal to the sum of the amounts determined under 
        paragraph (2) for each qualified trade or business carried on 
        by the taxpayer.''.
    (b) Conforming Amendments.--
            (1) Section 199A(c)(1) of such Code is amended by striking 
        the last sentence.
            (2) Section 199A(e) of such Code is amended by striking 
        paragraph (3) and by redesignating paragraph (4) as paragraph 
        (3).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 6. MANDATORY REPORTING WITH RESPECT TO CERTAIN HEALTH-RELATED 
              OWNERSHIP INFORMATION.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by adding at the end the following new section:

``SEC. 1150D. MANDATORY REPORTING WITH RESPECT TO CERTAIN HEALTH-
              RELATED OWNERSHIP INFORMATION.

    ``(a) Mandatory Reporting With Respect Certain Health-Related 
Ownership Information.--
            ``(1) Reporting.--Not later than January 1, 2026 (or in the 
        case of a specified entity formed after January 1, 2026, within 
        60 days of becoming a specified entity), and each year 
        thereafter, each specified entity (as defined in subsection 
        (e)(8)) shall submit to the Secretary, in a form and manner 
        specified by the Secretary, a report containing the following 
        information, subject to paragraph (3)(B):
                    ``(A) Data on mergers, acquisitions, changes in 
                ownership, changes in control, transactions to form new 
                affiliations, changes in partnerships, joint ventures, 
                and/or management services agreements, to which such 
                specified entity is a party for the previous 1-year 
                period, including--
                            ``(i) the primary reason the reporting 
                        entity completed the acquisition; and
                            ``(ii) a description of how the acquirer 
                        obtained control of the acquiree, and the 
                        percentage of ownership acquired (i.e., voting 
                        equity interests).
                    ``(B) As applicable, the name, address, tax or 
                health plan identification numbers (including, without 
                limitation, the tax identification number, National 
                Association of Insurance Commissioners identification 
                number, State insurance identification number, Medicare 
                provider number, and the standard unique health 
                identifier (as described in section 1173(b)) of all 
                health care providers within the specified entity that 
                furnish items or services.
                    ``(C) Business structure of any controlling entity, 
                including the business type and the tax identification 
                number of such entity, other affiliates under common 
                control, subsidiaries, and management services entities 
                of such specified entity, as of the date of the 
                submission of this report.
                    ``(D) Information regarding--
                            ``(i) the debt-to-earnings ratio of the 
                        specified entity;
                            ``(ii) the amount of debt incurred--
                                    ``(I) by each hospital or separate 
                                entity within the health system; and
                                    ``(II) by the entire specified 
                                entity;
                            ``(iii) real estate leases and purchases 
                        for property used, or intended to be used, to 
                        furnish or otherwise support the provision of 
                        health care services, including expenditures on 
                        rents and maintenance, property taxes paid, and 
                        the name of the company leased from;
                            ``(iv) details of other companies' revenue 
                        sharing arrangement;
                            ``(v) fees charged or dividends paid to 
                        investors;
                            ``(vi) in the case of a non-profit 
                        hospital, a subsidiary of a non-profit 
                        hospital, or a 501(c)(3) entity that shares 
                        common ownership with a non-profit hospital, 
                        capital gains investments (disaggregated by the 
                        type of investment) and any taxes paid on such 
                        gains from such investments; and
                            ``(vii) information with respect to any 
                        controlling entity of such specified entity.
                    ``(E) The value of quality payments received for 
                performance under any value-based or other performance-
                based program such as the shared savings program under 
                section 1899.
                    ``(F) Any other information with respect to 
                ownership or control of a specified entity, as 
                determined by the Secretary.
                    ``(G) Any changes to the health care providers 
                within the specified entity that furnish items or 
                services during the previous 1-year period, identified 
                by the National Provider identifier described in 
                section 1173(b).
                    ``(H) The domicile and business registration 
                information for any controlling entity or subsidiary of 
                such controlling entity that is domiciled outside of 
                the United States.
            ``(2) Avoiding duplicate reporting.--If a specified entity 
        is owned or controlled by an entity described in subparagraph 
        (G) of subsection (f)(8), only the entity described in such 
        subparagraph (G) shall be required to submit reports under this 
        subsection with respect to such entity and any specified entity 
        owned or controlled by the entity.
            ``(3) Availability of information and public reporting.--
                    ``(A) In general.--Not later than January 1, 2027, 
                and annually thereafter, subject to subparagraph (B), 
                the Secretary shall post on a publicly available 
                website of the Department of Health and Human Services 
                the information reported under this subsection with 
                respect to the previous 1-year period for which the 
                information was collected.
                    ``(B) Requirement.--In making information reported 
                under this subsection publicly available under 
                subparagraph (A), the Secretary shall do so in a manner 
                that does not disclose the social security number of 
                any individual provider of services or supplier.
    ``(b) Audits.--The Secretary shall conduct an annual audit 
consisting of a random sample of specified entities to verify 
compliance with the requirements of this section and the accuracy of 
information submitted pursuant to this section.
    ``(c) Penalty for Failure To Report.--If a specified entity fails 
to provide a complete report under subsection (a), or submits a report 
containing false information, such entity shall be subject to a civil 
monetary penalty of not more than $5,000,000 for each such report not 
provided or containing false information. Such penalty shall be imposed 
and collected in the same manner as civil money penalties under 
subsection (a) of section 1128A are imposed and collected under that 
section.
    ``(d) Inapplicability of Paperwork Reduction Act.--Chapter 35 of 
title 44, United States Code, shall not apply to collections of 
information made under this section.
    ``(e) Definitions.--In this section:
            ``(1) Control.--The term `control' means the direct or 
        indirect power through ownership, contractual agreement, or 
        otherwise--
                    ``(A) to vote more than 5 percent of any class of 
                voting securities of a specified entity; or
                    ``(B) to direct the actions of the specified 
                entity.
            ``(2) Controlling entity.--
                    ``(A) In general.--The term `controlling entity' 
                means, with respect to any specified entity, a parent 
                company or other entity that owns or controls the 
                specified entity through ownership, contractual 
                agreement, or otherwise.
                    ``(B) Inclusion of reits.--Such term includes, with 
                respect to a specified entity, a real estate investment 
                trust (as defined in section 856 of the Internal 
                Revenue Code of 1986) that owns property where the 
                specified entity furnishes health care items or 
                services.
            ``(3) Health plan.--The term `health plan' has the meaning 
        given such term in section 1128C(c).
            ``(4) Health system.--The term `health system' means a 
        group of health care organizations (such as physician 
        practices, hospitals, skilled nursing facilities) that are 
        jointly owned or managed.
            ``(5) Hospital.--The term `hospital' has the meaning given 
        such term in section 1861(e).
            ``(6) Independent freestanding emergency department.--The 
        term `independent freestanding emergency department' has the 
        meaning given such term in section 2799A-1(a)(3)(D) of the 
        Public Health Service Act.
            ``(7) Private fund.--The term `private fund' means a 
        corporation that--
                    ``(A) would be considered an investment company 
                under section 3 of the Investment Company Act of 1940 
                (15 U.S.C. 80a-3) but for the application of paragraph 
                (1) or (7) of subsection (c) of such section 3;
                    ``(B) is not a venture capital fund, as defined in 
                section 275.203(l)-1 of title 17, Code of Federal 
                Regulations, as in effect on the date of enactment of 
                this section; and
                    ``(C) is not an institution selected under section 
                107 of the Community Development Banking and Financial 
                Institutions Act of 1994 (12 2 U.S.C. 4706).
            ``(8) Specified entity.--The term `specified entity' 
        means--
                    ``(A) a hospital or health system;
                    ``(B) a physician-owned physician practice (other 
                than a practice described in subparagraph (C)) that is 
                enrolled in the Medicare program under title XVIII 
                under section 1866(j);
                    ``(C) a physician practice owned, controlled, under 
                common control, or under management agreement by a 
                hospital, health system, a health plan, a private fund, 
                a venture capital fund, a public or private 
                corporation, or any subsidiaries or entities under 
                common control thereof;
                    ``(D) an ambulatory surgical center meeting the 
                standards specified under section 1832(a)(2)(F)(i);
                    ``(E) an independent freestanding emergency 
                department;
                    ``(F) a behavioral health treatment facility, a 
                hospice program (as defined in section 1861(dd)(2)), a 
                home health agency, a provider of services or renal 
                dialysis facility that furnishes renal dialysis 
                services, or an assisted living facility;
                    ``(G) any other entity specified by the Secretary 
                that furnishes health care items and services; and
                    ``(H) any entity that owns or controls 1 or more 
                specified entities.
            ``(9) Venture capital fund.--The term `venture capital 
        fund' has the meaning given such term in section 275.203(l)-1 
        of title 17, Code of Federal Regulations.''.

SEC. 7. REPORT ON MORAL INJURY IN HEALTH CARE.

    (a) In General.--Not later than 3 years after the date of enactment 
of this Act, the Inspector General of the Department of Health and 
Human Services shall--
            (1) conduct a study that evaluates profit-driven practices, 
        including cost-cutting practices and revenue-enhancing 
        practices, in health care delivery; and
            (2) submit to Congress a report describing the results of 
        such study.
    (b) Inclusions.--The study conducted under subsection (a)(1) shall 
include--
            (1) an evaluation of profit-driven and revenue-maximization 
        practices in health care delivery, including--
                    (A) overbilling or up-coding;
                    (B) inflated patient severity or patient risk 
                scores;
                    (C) executive and provider compensation designed to 
                increase revenue or profits, such as bonuses based on 
                productivity, relative value units, or service volume;
                    (D) reductions in staff and substitution of patient 
                care staff with technology;
                    (E) changes in the mix of services provided in 
                order to maximize revenue;
                    (F) efforts by private health insurers that are 
                designed to restrict, delay, deny, or discourage health 
                care access services, such as prior authorization or 
                utilization review mechanisms; and
                    (G) efforts by private health insurers, private 
                equity firms, and other corporate entities to evade 
                state Corporate Practice of Medicine laws;
            (2) an evaluation of the impact of such practices on--
                    (A) the quality, safety, and outcomes of patient 
                care;
                    (B) the well-being of personnel providing health 
                care services;
                    (C) the Medicare program under title XVIII of the 
                Social Security Act (42 U.S.C. 1395 et seq.);
                    (D) the Medicaid program under title XIX of such 
                Act (42 U.S.C. 1396 et seq.);
                    (E) health care furnished under the laws 
                administered by the Secretary of Veterans Affairs;
                    (F) the health insurance program carried out under 
                chapter 89 of title 5, United States Code;
                    (G) qualified health plans offered through American 
                Health Benefit Exchanges established under section 1311 
                or 1321 of the Patient Protection and Affordable Care 
                Act (42 U.S.C. 18031, 18041); and
                    (H) group health plans and group and individual 
                health insurance coverage, including managed care 
                plans;
            (3) an estimate of the financial returns accruing to 
        parties that benefit from such practices, including investors 
        and other entities; and
            (4) an evaluation of the adequacy of Federal policies 
        designed to prevent and penalize health care fraud and abuse, 
        given health care consolidation and integration, including the 
        transparency of health care entities' financial practices, the 
        enforcement resources of Federal agencies, and the adequacy of 
        financial and other penalties as deterrents.
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