II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Corporate Crimes 

5 Against Health Care Act’’. 

6 SEC. 2. UNJUST ENRICHMENT CLAWBACK AUTHORITY AND 

7 CRIMINAL PENALTY. 

8 (a) UNJUST ENRICHMENT CLAWBACK.—Chapter 31 

9 of title 18, United States Code, is amended by adding at 

10 the end the following: 


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1 ‘‘§ 671. Unjust enrichment clawback and criminal 

2 penalty 

3 ‘‘(a) PROHIBITED CONDUCT.—Any covered party 

4 whose actions contributed to a triggering event that re5 sults in the death or injury of a patient or patients under 

6 the care of the target firm, shall be punished in accordance 

7 with sections 672 and 673. 

8 ‘‘§ 672. Criminal penalty 

9 ‘‘Whoever violates section 671 shall be imprisoned for 

10 not less than 1 year or greater than 6 years. 

11 ‘‘§ 673. Civil penalty 

12 ‘‘(a) AMOUNT OF PENALTY.—Whoever violates sec13 tion 671 shall be subject to a civil penalty in an amount 

14 of not more than 5 times the amount of any clawback au15 thorized under section 674. 

16 ‘‘(b) DEPOSIT.—Any amount of civil penalty collected 

17 under this section shall be deposited as miscellaneous re18 ceipts in the Treasury of the United States. 

19 ‘‘§ 674. Clawback 

20 ‘‘(a) IN GENERAL.— 

21 ‘‘(1) PROHIBITION.—It shall be unlawful for 

22 any covered party to acquire from a target firm cov23 ered compensation by unjust enrichment, and any 

24 such covered party shall be subject to the penalties 

25 described in sections 672 and 673 in addition to the 

26 required clawbacks under this section. 


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1 ‘‘(2) PENALTY.— 

2 ‘‘(A) REQUIRED CLAWBACKS.—If a target 

3 firm experiences a triggering event, the Attor4 ney General or a State attorney general may 

5 claw back all or part of the covered compensa6 tion received by the covered party that is ob7 tained from the target firm during the pre8 ceding or succeeding 10 years. 

9 ‘‘(B) ACTIONS TO RECOVER REQUIRED

10 CLAWBACKS.— 

11 ‘‘(i) POWERS OF THE ATTORNEY GEN12 ERAL.— 

13 ‘‘(I) IN GENERAL.—Except as 

14 provided in clause (ii), the Attorney 

15 General may enforce this section. 

16 ‘‘(II) AUTHORITY PRESERVED.— 

17 Nothing in this section shall be con18 strued to limit the authority of the 

19 Attorney General under any provision 

20 of law. 

21 ‘‘(III) PENALTY.—In an action 

22 brought by the Attorney General to 

23 enforce this section and the regula24 tions promulgated under this section, 

25 a covered party shall be liable for all 


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1 or part of the covered compensation 

2 received by the covered party that is 

3 obtained from the target firm during 

4 the preceding or succeeding 10 years. 

5 ‘‘(ii) ENFORCEMENT BY STATE AT6 TORNEYS GENERAL.— 

7 ‘‘(I) CIVIL ACTION.—If an attor8 ney general of a State has reason to 

9 believe that a triggering event has 

10 harmed the residents of that State, 

11 the attorney general of the State may, 

12 as parens patriae, bring a civil action 

13 on behalf of the residents of the State 

14 in an appropriate district court of the 

15 United States to recover all or part of 

16 the covered compensation received by 

17 the covered party that is obtained 

18 from the target firm during the pre19 ceding or succeeding 10 years. 

20 ‘‘(II) RIGHTS OF THE ATTORNEY

21 GENERAL.— 

22 ‘‘(aa) NOTICE TO ATTORNEY

23 GENERAL.— 

24 ‘‘(AA) IN GENERAL.— 

25 Except as provided in 


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1 subitem (CC), the attorney 

2 general of a State shall no3 tify the Attorney General in 

4 writing that the attorney 

5 general of the State intends 

6 to bring a civil action under 

7 subclause (I) not later than 

8 10 days before initiating the 

9 civil action. 

10 ‘‘(BB) CONTENTS.— 

11 The notification required 

12 under subitem (AA) with re13 spect to a civil action shall 

14 include a copy of the com15 plaint to be filed to initiate 

16 the civil action. 

17 ‘‘(CC) EXCEPTION.—If 

18 it is not feasible for the at19 torney general of a State to 

20 provide the notification re21 quired by subitem (AA) be22 fore initiating an action 

23 under subclause (I), the at24 torney general of the State 

25 shall notify the Attorney 


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1 General immediately upon 

2 instituting the civil action. 

3 ‘‘(bb) INTERVENTION BY

4 THE ATTORNEY GENERAL.—The 

5 Attorney General may— 

6 ‘‘(AA) intervene in any 

7 action brought by the attor8 ney general of a State under 

9 subclause (I); and 

10 ‘‘(BB) upon intervening 

11 under subitem (aa), be 

12 heard on all matters arising 

13 in the civil action and file 

14 petitions for appeal of a de15 cision in the action. 

16 ‘‘(iii) LIMITATION ON STATE ACTION

17 WHILE FEDERAL ACTION IS PENDING.—If 

18 the Attorney General institutes an action 

19 under clause (i) with respect to a trig20 gering event, a State may not, during the 

21 pendency of that action, institute an action 

22 under clause (ii) against any defendant 

23 named in the complaint in the action insti24 tuted by the Attorney General based on 

25 the same set of facts giving rise to the 


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1 triggering event with respect to which the 

2 Attorney General instituted the action. 

3 ‘‘(iv) AFFIRMATIVE DEFENSE.—It 

4 shall be an affirmative defense in an action 

5 under this section if the applicable covered 

6 party shows by clear and convincing evi7 dence that the covered party could not pre8 vent the triggering event. 

9 ‘‘(C) DEPOSIT.— 

10 ‘‘(i) IN GENERAL.—Subject to clause 

11 (ii), any covered compensation clawed back 

12 in an action under this section shall be de13 posited in a fund created by the Attorney 

14 General and distributed by the Attorney 

15 General, in the interests of justice— 

16 ‘‘(I) to cover shortfalls in the sal17 aries, employee benefit plans, or other 

18 benefits owed to current or past em19 ployees of the target firm negatively 

20 affected by the behavior that is the 

21 basis of the action; and 

22 ‘‘(II) to be put to use in the in23 terest of serving the health care needs 

24 of the harmed community. 


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1 ‘‘(ii) BANKRUPTCY AS A TRIGGERING

2 EVENT.—Notwithstanding any other provi3 sion of law, if the entry of an order for re4 lief under title 11 or the commencement of 

5 any other insolvency proceeding is the trig6 gering event that a target firm experiences, 

7 the Attorney General shall prioritize cov8 ering funding shortfalls in any pension 

9 funds benefitting harmed current or past 

10 employees of the target firm. 

11 ‘‘(b) DEFINITIONS.—In this section: 

12 ‘‘(1) AFFILIATE.—The term ‘affiliate’ means— 

13 ‘‘(A) a person that directly or indirectly 

14 owns, controls, or holds with power to vote, 5 

15 percent or more of the outstanding voting secu16 rities of another entity, other than a person 

17 that holds such securities— 

18 ‘‘(i) in a fiduciary or agency capacity 

19 without sole discretionary power to vote 

20 such securities; or 

21 ‘‘(ii) solely to secure a debt, if such 

22 entity has not in fact exercised such power 

23 to vote; 

24 ‘‘(B) a corporation 10 percent or more of 

25 whose outstanding voting securities are directly 


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1 or indirectly owned, controlled, or held with 

2 power to vote, by another entity (referred to in 

3 this subparagraph as a ‘covered entity’), or by 

4 an entity that directly or indirectly owns, con5 trols, or holds with power to vote, 10 percent or 

6 more of the outstanding voting securities of the 

7 covered entity, other than an entity that holds 

8 such securities— 

9 ‘‘(i) in a fiduciary or agency capacity 

10 without sole discretionary power to vote 

11 such securities; or 

12 ‘‘(ii) solely to secure a debt, if such 

13 entity has not in fact exercised such power 

14 to vote; 

15 ‘‘(C) a person whose business is operated 

16 under a lease or operating agreement by an17 other entity, or person substantially all of whose 

18 property is operated under an operating agree19 ment with that other entity; or 

20 ‘‘(D) an entity that operates the business 

21 or substantially all of the property of another 

22 entity under a lease or operating agreement. 

23 ‘‘(2) CHANGE IN CONTROL.—The term ‘change 

24 in control’ means a change in a legal right with re25 spect to— 


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1 ‘‘(A) the power to vote more than 50 per 

2 centum of any class of voting securities of a 

3 corporation that engages in interstate com4 merce; or 

5 ‘‘(B) any lesser per centum of any class of 

6 voting securities of a corporation that engages 

7 in interstate commerce that is sufficient to 

8 make the acquirer of such an interest a person 

9 that has the ability to direct the actions of that 

10 corporation. 

11 ‘‘(3) CONTROL PERSON.—The term ‘control 

12 person’— 

13 ‘‘(A) means— 

14 ‘‘(i) a person— 

15 ‘‘(I) that directly or indirectly 

16 owns, controls, or holds with power to 

17 vote, including through coordination 

18 with other persons, 10 percent or 

19 more of the outstanding voting inter20 ests of a corporation; or 

21 ‘‘(II) that operates the business 

22 or substantially all of the property of 

23 a corporation under a lease or an op24 erating or management agreement; 


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1 ‘‘(ii) a corporation, other than a tar2 get firm, that has 10 percent or more of 

3 its outstanding voting interests directly or 

4 indirectly owned, controlled, or held with 

5 power to vote by a person that directly or 

6 indirectly owns, controls, or holds with 

7 power to vote, including through coordina8 tion with other persons, 10 percent or 

9 more of the outstanding voting interests of 

10 another corporation; or 

11 ‘‘(iii) a person that otherwise has the 

12 ability to direct the actions of a corpora13 tion; and 

14 ‘‘(B) does not include a person that— 

15 ‘‘(i)(I) is a limited partner with re16 spect to a controlling private fund that is 

17 a partnership; 

18 ‘‘(II) does not participate in the direc19 tion of the management or policy of a cor20 poration; and 

21 ‘‘(III) is not an insider with respect to 

22 the controlling private fund described in 

23 subclause (I); 

24 ‘‘(ii) is a pension fund or employee 

25 welfare benefit plan, if neither the fund 


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1 nor plan (as applicable), nor any bene2 ficiary or affiliate of the benefit or plan, is 

3 an insider with respect to a controlling pri4 vate fund; or 

5 ‘‘(iii) holds the voting interests of a 

6 corporation solely— 

7 ‘‘(I) in a fiduciary or agency ca8 pacity without sole discretionary 

9 power to vote the securities; or 

10 ‘‘(II) to secure a debt, if the per11 son has not— 

12 ‘‘(aa) exercised the power to 

13 vote; or 

14 ‘‘(bb) exercised any other 

15 governance rights with respect to 

16 the corporation. 

17 ‘‘(4) CONTROLLING PRIVATE FUND.—The term 

18 ‘controlling private fund’ means a private fund that, 

19 directly or through an affiliate, becomes a control 

20 person with respect to a target firm through the 

21 change in control transaction with respect to the tar22 get firm. 

23 ‘‘(5) CORPORATION.—The term ‘corporation’ 

24 means— 

25 ‘‘(A) a joint-stock company; 


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1 ‘‘(B) a company or partnership association 

2 organized under a law that makes only the cap3 ital subscribed or callable up to a specified 

4 amount responsible for the debts of the associa5 tion, including a limited partnership and a lim6 ited liability company; 

7 ‘‘(C) a trust; and 

8 ‘‘(D) an association having a power or 

9 privilege that a private corporation, but not an 

10 individual or a partnership, possesses. 

11 ‘‘(6) COVERED COMPENSATION.—The term 

12 ‘covered compensation’ means— 

13 ‘‘(A) salary; 

14 ‘‘(B) any bonus; 

15 ‘‘(C) any compensation that is granted, 

16 earned, or vested based wholly or in part upon 

17 the attainment of any financial reporting meas18 ure or other performance metric; 

19 ‘‘(D) equity-based compensation; 

20 ‘‘(E) time- or service-based awards; 

21 ‘‘(F) awards based on nonfinancial 

22 metrics; 

23 ‘‘(G) any monitoring fees, management 

24 fees, advisory fees, accelerated monitoring fees, 


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1 transaction fees, or fees for services not ren2 dered; 

3 ‘‘(H) any profits realized from the buying 

4 or selling of securities or assets, including any 

5 real property; 

6 ‘‘(I) any severance pay; 

7 ‘‘(J) any golden parachute benefit; or 

8 ‘‘(K) any other transaction similar to a 

9 transaction described in subparagraph (H) or 

10 (I). 

11 ‘‘(7) COVERED PARTY.—The term ‘covered 

12 party’ means— 

13 ‘‘(A) any current or former director, offi14 cer, or control person of, or agent for, a private 

15 equity firm or target firm; 

16 ‘‘(B) any current or former shareholder or 

17 joint venture partner that participates in the 

18 conduct of the affairs of a target firm; or 

19 ‘‘(C) any private fund. 

20 ‘‘(8) EMPLOYEE WELFARE BENEFIT PLAN.— 

21 The term ‘employee welfare benefit plan’ has the 

22 meaning given the term in section 3 of the Employee 

23 Retirement Income Security Act of 1974 (29 U.S.C. 

24 1002). 

25 ‘‘(9) INSIDER.—The term ‘insider’ means any— 


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1 ‘‘(A) director of a corporation; 

2 ‘‘(B) officer of a corporation; 

3 ‘‘(C) managing agent of a corporation; 

4 ‘‘(D) control person with respect to a cor5 poration; 

6 ‘‘(E) affiliate of a corporation; 

7 ‘‘(F) general partner of a corporation that 

8 is a partnership; 

9 ‘‘(G) consultant or contractor retained by 

10 a corporation; 

11 ‘‘(H) affiliate, relative, or agent of a per12 son described in any of subparagraphs (A) 

13 through (F); or 

14 ‘‘(I) affiliate, relative, or agent of a person 

15 described in subparagraph (H). 

16 ‘‘(10) INTEREST COVERAGE.—The term ‘inter17 est coverage’ means the revenue of the target firm 

18 less the expenses of the target firm, excluding tax 

19 and interest, during the most recent fiscal year of 

20 the target firm. 

21 ‘‘(11) PENSION FUND.—The term ‘pension 

22 fund’ has the meaning given the term ‘pension plan’ 

23 in section 3 of the Employee Retirement Security 

24 Act of 1974 (29 U.S.C. 1002). 


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1 ‘‘(12) PRIVATE FUND.—The term ‘private fund’ 

2 means a corporation that— 

3 ‘‘(A) would be considered an investment 

4 company under section 3 of the Investment 

5 Company Act of 1940 (15 U.S.C. 80a–3) but 

6 for the application of paragraph (1) or (7) of 

7 subsection (c) of that section; 

8 ‘‘(B) is not a venture capital fund, as de9 fined in section 275.203(l)–1 of title 17, Code 

10 of Federal Regulations, as in effect on the date 

11 of enactment of this Act; and 

12 ‘‘(C) is not an institution selected under 

13 section 107 of the Community Development 

14 Banking and Financial Institutions Act of 1994 

15 (12 U.S.C. 4706). 

16 ‘‘(13) REASONABLE SALARY.—The term ‘rea17 sonable salary’ means the amount that would ordi18 narily be paid for like services by like enterprises 

19 under like circumstances. 

20 ‘‘(14) RELATIVE.—The term ‘relative’ means 

21 an individual related by affinity or consanguinity 

22 within the third degree as determined by the com23 mon law, or individual in a step or adoptive relation24 ship within such third degree. 


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1 ‘‘(15) SECURITY.—The term ‘security’ has the 

2 meaning given the term in section 2(a) of the Secu3 rities Act of 1933 (15 U.S.C. 77b(a)). 

4 ‘‘(16) TARGET FIRM.—The term ‘target firm’ 

5 means a health care corporation that is acquired in 

6 a change in control transaction. 

7 ‘‘(17) TRIGGERING EVENT.—The term ‘trig8 gering event’ means— 

9 ‘‘(A) any time at which a target firm is be10 hind on salary payments greater than 25 per11 cent of the total workforce of the target firm 

12 for a period of more than 90 days; 

13 ‘‘(B) closure of the target firm; 

14 ‘‘(C) if the target firm is behind on rent 

15 payments for a period of more than 90 days; 

16 ‘‘(D) if the target firm defaults on a loan 

17 for a period of more than 90 days; or 

18 ‘‘(E) the entry of an order for relief under 

19 title 11 on behalf of the target firm or the com20 mencement of any other insolvency proceeding. 

21 ‘‘(18) UNJUST ENRICHMENT.—The term ‘un22 just enrichment’ means the acquisition of covered 

23 compensation by a covered party from the target 

24 firm during the 10-year period preceding or sucVerDate Sep 11 2014 19:55 Jul 31, 2024 Jkt 049200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S4503.IS S4503

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1 ceeding a triggering event if any of the following ag2 gravating circumstances are established: 

3 ‘‘(A) The covered compensation was ob4 tained through a dividend recapitalization, a 

5 sale-leaseback of real estate or equipment, or a 

6 related person transaction, as set forth in sec7 tion 229.404 of title 17, Code of Federal Regu8 lations. 

9 ‘‘(B) The covered party has been impli10 cated in any white-collar crime, as defined in 

11 section 901 of title I of the Omnibus Crime 

12 Control and Safe Streets Act of 1968 (34 

13 U.S.C. 10251), committed in the course of the 

14 current or former employment of the covered 

15 party. 

16 ‘‘(C) The covered party has charged the 

17 target firm accelerated monitoring fees or fees 

18 for services not rendered. 

19 ‘‘(D) At the time of the issuance of the 

20 covered compensation, or as the result of the 

21 issuance of the covered compensation, the tar22 get firm had an interest coverage in excess of 

23 100 percent.’’. 

24 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

25 The table of sections for chapter 31 of title 18, United 


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1 States Code, is amended by adding at the end the fol2 lowing: 

‘‘671. Unjust enrichment clawback and criminal penalty. 

‘‘672. Criminal penalty. 

‘‘673. Civil penalty. 

‘‘674. Clawback.’’. 

3 SEC. 3. PROHIBITING PAYMENTS FROM FEDERAL HEALTH 

4 CARE PROGRAMS TO ENTITIES THAT SELL 

5 ASSETS TO OR USE ASSETS AS COLLATERAL 

6 FOR A LOAN WITH A REAL ESTATE INVEST7 MENT TRUST. 

8 Section 1128(a) of the Social Security Act (42 U.S.C. 

9 1320a–7(a)) is amended by adding at the end the fol10 lowing new paragraph: 

11 ‘‘(5) SELLING ASSETS TO OR USING ASSETS AS

12 COLLATERAL FOR A LOAN WITH A REAL ESTATE IN13 VESTMENT TRUST.— 

14 ‘‘(A) IN GENERAL.—Any individual or en15 tity that, on or after the date of enactment of 

16 this paragraph, sells any assets to, or newly 

17 pledges any assets as collateral for a loan with, 

18 a real estate investment trust (as defined in 

19 section 856(a) of the Internal Revenue Code of 

20 1986). 

21 ‘‘(B) CLARIFICATION.—Subparagraph (A) 

22 shall not apply in the case where an individual 

23 or entity agreed to pledge an asset as collateral 


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1 for a loan with a real estate investment trust 

2 prior to the date of enactment of this para3 graph, including with respect to any future 

4 agreement between the individual or entity and 

5 the real estate investment trust regarding that 

6 same asset.’’. 

7 SEC. 4. REPEAL OF SPECIAL RULE FOR TAXABLE REIT SUB8 SIDIARIES WITH INTERESTS IN CERTAIN 

9 HEALTH CARE PROPERTY. 

10 (a) IN GENERAL.—Section 856(d)(8)(B) of the Inter11 nal Revenue Code of 1986 is amended— 

12 (1) by striking ‘‘or a qualified health care prop13 erty (as defined in subsection (e)(6)(D)(i))’’, and 

14 (2) by striking ‘‘qualified health care property 

15 or’’. 

16 (b) CONFORMING AMENDMENTS.—Section 856(d)(9) 

17 of such Code is amended— 

18 (1) in subparagraph (A)— 

19 (A) by striking ‘‘or a qualified health care 

20 property (as defined in subsection 

21 (e)(6)(D)(i))’’, 

22 (B) by striking ‘‘or qualified health care 

23 property’’, and 

24 (C) by striking ‘‘or qualified health care 

25 properties’’, and 


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1 (2) in subparagraph (B)— 

2 (A) by striking ‘‘or qualified health care 

3 property (as so defined)’’, and 

4 (B) by striking ‘‘or qualified health care 

5 property’’ each place it appears in clauses (i), 

6 (ii), and (iii)(II). 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to taxable years beginning after 

9 the date of the enactment of this Act. 

10 SEC. 5. ELIMINATION OF QUALIFIED REIT DIVIDENDS 

11 FROM QUALIFIED BUSINESS INCOME. 

12 (a) IN GENERAL.—Paragraph (1) of section 199A(b) 

13 of the Internal Revenue Code of 1986 is amended to read 

14 as follows: 

15 ‘‘(1) IN GENERAL.—The term ‘combined quali16 fied business income amount’ means, with respect to 

17 any taxable year, an amount equal to the sum of the 

18 amounts determined under paragraph (2) for each 

19 qualified trade or business carried on by the tax20 payer.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) Section 199A(c)(1) of such Code is amend23 ed by striking the last sentence. 


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1 (2) Section 199A(e) of such Code is amended 

2 by striking paragraph (3) and by redesignating 

3 paragraph (4) as paragraph (3). 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to taxable years beginning after 

6 the date of the enactment of this Act. 

7 SEC. 6. MANDATORY REPORTING WITH RESPECT TO CER8 TAIN HEALTH-RELATED OWNERSHIP INFOR9 MATION. 

10 Part A of title XI of the Social Security Act (42 

11 U.S.C. 1301 et seq.) is amended by adding at the end 

12 the following new section: 

13 ‘‘SEC. 1150D. MANDATORY REPORTING WITH RESPECT TO 

14 CERTAIN HEALTH-RELATED OWNERSHIP IN15 FORMATION. 

16 ‘‘(a) MANDATORY REPORTING WITH RESPECT CER17 TAIN HEALTH-RELATED OWNERSHIP INFORMATION.— 

18 ‘‘(1) REPORTING.—Not later than January 1, 

19 2026 (or in the case of a specified entity formed 

20 after January 1, 2026, within 60 days of becoming 

21 a specified entity), and each year thereafter, each 

22 specified entity (as defined in subsection (e)(8)) 

23 shall submit to the Secretary, in a form and manner 

24 specified by the Secretary, a report containing the 

25 following information, subject to paragraph (3)(B): 


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1 ‘‘(A) Data on mergers, acquisitions, 

2 changes in ownership, changes in control, trans3 actions to form new affiliations, changes in 

4 partnerships, joint ventures, and/or manage5 ment services agreements, to which such speci6 fied entity is a party for the previous 1-year pe7 riod, including— 

8 ‘‘(i) the primary reason the reporting 

9 entity completed the acquisition; and 

10 ‘‘(ii) a description of how the acquirer 

11 obtained control of the acquiree, and the 

12 percentage of ownership acquired (i.e., vot13 ing equity interests). 

14 ‘‘(B) As applicable, the name, address, tax 

15 or health plan identification numbers (includ16 ing, without limitation, the tax identification 

17 number, National Association of Insurance 

18 Commissioners identification number, State in19 surance identification number, Medicare pro20 vider number, and the standard unique health 

21 identifier (as described in section 1173(b)) of 

22 all health care providers within the specified en23 tity that furnish items or services. 

24 ‘‘(C) Business structure of any controlling 

25 entity, including the business type and the tax 


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1 identification number of such entity, other af2 filiates under common control, subsidiaries, and 

3 management services entities of such specified 

4 entity, as of the date of the submission of this 

5 report. 

6 ‘‘(D) Information regarding— 

7 ‘‘(i) the debt-to-earnings ratio of the 

8 specified entity; 

9 ‘‘(ii) the amount of debt incurred— 

10 ‘‘(I) by each hospital or separate 

11 entity within the health system; and 

12 ‘‘(II) by the entire specified enti13 ty; 

14 ‘‘(iii) real estate leases and purchases 

15 for property used, or intended to be used, 

16 to furnish or otherwise support the provi17 sion of health care services, including ex18 penditures on rents and maintenance, 

19 property taxes paid, and the name of the 

20 company leased from; 

21 ‘‘(iv) details of other companies’ rev22 enue sharing arrangement; 

23 ‘‘(v) fees charged or dividends paid to 

24 investors; 


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1 ‘‘(vi) in the case of a non-profit hos2 pital, a subsidiary of a non-profit hospital, 

3 or a 501(c)(3) entity that shares common 

4 ownership with a non-profit hospital, cap5 ital gains investments (disaggregated by 

6 the type of investment) and any taxes paid 

7 on such gains from such investments; and 

8 ‘‘(vii) information with respect to any 

9 controlling entity of such specified entity. 

10 ‘‘(E) The value of quality payments re11 ceived for performance under any value-based 

12 or other performance-based program such as 

13 the shared savings program under section 1899. 

14 ‘‘(F) Any other information with respect to 

15 ownership or control of a specified entity, as de16 termined by the Secretary. 

17 ‘‘(G) Any changes to the health care pro18 viders within the specified entity that furnish 

19 items or services during the previous 1-year pe20 riod, identified by the National Provider identi21 fier described in section 1173(b). 

22 ‘‘(H) The domicile and business registra23 tion information for any controlling entity or 

24 subsidiary of such controlling entity that is 

25 domiciled outside of the United States. 


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1 ‘‘(2) AVOIDING DUPLICATE REPORTING.—If a 

2 specified entity is owned or controlled by an entity 

3 described in subparagraph (G) of subsection (f)(8), 

4 only the entity described in such subparagraph (G) 

5 shall be required to submit reports under this sub6 section with respect to such entity and any specified 

7 entity owned or controlled by the entity. 

8 ‘‘(3) AVAILABILITY OF INFORMATION AND PUB9 LIC REPORTING.— 

10 ‘‘(A) IN GENERAL.—Not later than Janu11 ary 1, 2027, and annually thereafter, subject to 

12 subparagraph (B), the Secretary shall post on 

13 a publicly available website of the Department 

14 of Health and Human Services the information 

15 reported under this subsection with respect to 

16 the previous 1-year period for which the infor17 mation was collected. 

18 ‘‘(B) REQUIREMENT.—In making informa19 tion reported under this subsection publicly 

20 available under subparagraph (A), the Sec21 retary shall do so in a manner that does not 

22 disclose the social security number of any indi23 vidual provider of services or supplier. 

24 ‘‘(b) AUDITS.—The Secretary shall conduct an an25 nual audit consisting of a random sample of specified entiVerDate Sep 11 2014 19:55 Jul 31, 2024 Jkt 049200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S4503.IS S4503

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1 ties to verify compliance with the requirements of this sec2 tion and the accuracy of information submitted pursuant 

3 to this section. 

4 ‘‘(c) PENALTY FOR FAILURE TO REPORT.—If a spec5 ified entity fails to provide a complete report under sub6 section (a), or submits a report containing false informa7 tion, such entity shall be subject to a civil monetary pen8 alty of not more than $5,000,000 for each such report 

9 not provided or containing false information. Such penalty 

10 shall be imposed and collected in the same manner as civil 

11 money penalties under subsection (a) of section 1128A are 

12 imposed and collected under that section. 

13 ‘‘(d) INAPPLICABILITY OF PAPERWORK REDUCTION

14 ACT.—Chapter 35 of title 44, United States Code, shall 

15 not apply to collections of information made under this 

16 section. 

17 ‘‘(e) DEFINITIONS.—In this section: 

18 ‘‘(1) CONTROL.—The term ‘control’ means the 

19 direct or indirect power through ownership, contrac20 tual agreement, or otherwise— 

21 ‘‘(A) to vote more than 5 percent of any 

22 class of voting securities of a specified entity; or 

23 ‘‘(B) to direct the actions of the specified 

24 entity. 

25 ‘‘(2) CONTROLLING ENTITY.— 


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1 ‘‘(A) IN GENERAL.—The term ‘controlling 

2 entity’ means, with respect to any specified en3 tity, a parent company or other entity that 

4 owns or controls the specified entity through 

5 ownership, contractual agreement, or otherwise. 

6 ‘‘(B) INCLUSION OF REITS.—Such term in7 cludes, with respect to a specified entity, a real 

8 estate investment trust (as defined in section 

9 856 of the Internal Revenue Code of 1986) that 

10 owns property where the specified entity fur11 nishes health care items or services. 

12 ‘‘(3) HEALTH PLAN.—The term ‘health plan’ 

13 has the meaning given such term in section 

14 1128C(c). 

15 ‘‘(4) HEALTH SYSTEM.—The term ‘health sys16 tem’ means a group of health care organizations 

17 (such as physician practices, hospitals, skilled nurs18 ing facilities) that are jointly owned or managed. 

19 ‘‘(5) HOSPITAL.—The term ‘hospital’ has the 

20 meaning given such term in section 1861(e). 

21 ‘‘(6) INDEPENDENT FREESTANDING EMER22 GENCY DEPARTMENT.—The term ‘independent free23 standing emergency department’ has the meaning 

24 given such term in section 2799A–1(a)(3)(D) of the 

25 Public Health Service Act. 


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1 ‘‘(7) PRIVATE FUND.—The term ‘private fund’ 

2 means a corporation that— 

3 ‘‘(A) would be considered an investment 

4 company under section 3 of the Investment 

5 Company Act of 1940 (15 U.S.C. 80a–3) but 

6 for the application of paragraph (1) or (7) of 

7 subsection (c) of such section 3; 

8 ‘‘(B) is not a venture capital fund, as de9 fined in section 275.203(l)–1 of title 17, Code 

10 of Federal Regulations, as in effect on the date 

11 of enactment of this section; and 

12 ‘‘(C) is not an institution selected under 

13 section 107 of the Community Development 

14 Banking and Financial Institutions Act of 1994 

15 (12 2 U.S.C. 4706). 

16 ‘‘(8) SPECIFIED ENTITY.—The term ‘specified 

17 entity’ means— 

18 ‘‘(A) a hospital or health system; 

19 ‘‘(B) a physician-owned physician practice 

20 (other than a practice described in subpara21 graph (C)) that is enrolled in the Medicare pro22 gram under title XVIII under section 1866(j); 

23 ‘‘(C) a physician practice owned, con24 trolled, under common control, or under man25 agement agreement by a hospital, health sysVerDate Sep 11 2014 19:55 Jul 31, 2024 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S4503.IS S4503

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1 tem, a health plan, a private fund, a venture 

2 capital fund, a public or private corporation, or 

3 any subsidiaries or entities under common con4 trol thereof; 

5 ‘‘(D) an ambulatory surgical center meet6 ing the standards specified under section 

7 1832(a)(2)(F)(i); 

8 ‘‘(E) an independent freestanding emer9 gency department; 

10 ‘‘(F) a behavioral health treatment facility, 

11 a hospice program (as defined in section 

12 1861(dd)(2)), a home health agency, a provider 

13 of services or renal dialysis facility that fur14 nishes renal dialysis services, or an assisted liv15 ing facility; 

16 ‘‘(G) any other entity specified by the Sec17 retary that furnishes health care items and 

18 services; and 

19 ‘‘(H) any entity that owns or controls 1 or 

20 more specified entities. 

21 ‘‘(9) VENTURE CAPITAL FUND.—The term ‘ven22 ture capital fund’ has the meaning given such term 

23 in section 275.203(l)–1 of title 17, Code of Federal 

24 Regulations.’’. 


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

2 (a) IN GENERAL.—Not later than 3 years after the 

3 date of enactment of this Act, the Inspector General of 

4 the Department of Health and Human Services shall— 

5 (1) conduct a study that evaluates profit-driven 

6 practices, including cost-cutting practices and rev7 enue-enhancing practices, in health care delivery; 

8 and 

9 (2) submit to Congress a report describing the 

10 results of such study. 

11 (b) INCLUSIONS.—The study conducted under sub12 section (a)(1) shall include— 

13 (1) an evaluation of profit-driven and revenue14 maximization practices in health care delivery, in15 cluding— 

16 (A) overbilling or up-coding; 

17 (B) inflated patient severity or patient risk 

18 scores; 

19 (C) executive and provider compensation 

20 designed to increase revenue or profits, such as 

21 bonuses based on productivity, relative value 

22 units, or service volume; 

23 (D) reductions in staff and substitution of 

24 patient care staff with technology; 

25 (E) changes in the mix of services provided 

26 in order to maximize revenue; 


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1 (F) efforts by private health insurers that 

2 are designed to restrict, delay, deny, or discour3 age health care access services, such as prior 

4 authorization or utilization review mechanisms; 

5 and 

6 (G) efforts by private health insurers, pri7 vate equity firms, and other corporate entities 

8 to evade state Corporate Practice of Medicine 

9 laws; 

10 (2) an evaluation of the impact of such prac11 tices on— 

12 (A) the quality, safety, and outcomes of 

13 patient care; 

14 (B) the well-being of personnel providing 

15 health care services; 

16 (C) the Medicare program under title 

17 XVIII of the Social Security Act (42 U.S.C. 

18 1395 et seq.); 

19 (D) the Medicaid program under title XIX 

20 of such Act (42 U.S.C. 1396 et seq.); 

21 (E) health care furnished under the laws 

22 administered by the Secretary of Veterans Af23 fairs; 


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1 (F) the health insurance program carried 

2 out under chapter 89 of title 5, United States 

3 Code; 

4 (G) qualified health plans offered through 

5 American Health Benefit Exchanges established 

6 under section 1311 or 1321 of the Patient Pro7 tection and Affordable Care Act (42 U.S.C. 

8 18031, 18041); and 

9 (H) group health plans and group and in10 dividual health insurance coverage, including 

11 managed care plans; 

12 (3) an estimate of the financial returns accru13 ing to parties that benefit from such practices, in14 cluding investors and other entities; and 

15 (4) an evaluation of the adequacy of Federal 

16 policies designed to prevent and penalize health care 

17 fraud and abuse, given health care consolidation and 

18 integration, including the transparency of health 

19 care entities’ financial practices, the enforcement re20 sources of Federal agencies, and the adequacy of fi21 nancial and other penalties as deterrents. 

Æ 


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