Merkley, Colleagues Renew Push to Root Out Private Equity Abuse in Health Care, Strike Back Against Corporate Greed

"Sick patients should never be used to turn healthy profits."

Text of Bill (PDF) | One Pager (PDF)

Washington, D.C. - Oregon's U.S. Senator Jeff Merkley teamed up with his colleagues to introduce the Corporate Crimes Against Health Care Act to root out corporate greed and private equity abuse in the health care system.

"Sick patients should never be used to turn healthy profits. But that's exactly what is happening in Oregon and across the nation as greedy corporate executives turn hospitals, nursing homes, and doctors' offices into profit centers," said Merkley. "We must crack down on private equity, whose greed is destroying our health care system for executives' personal profit, while patients are stuck footing the bill."

Merkley has long warned about the corporate takeover of health care. Earlier this Congress, he introduced new legislation to tackle corporate greed in health care-the Patients Over Profits Act-to crack down on health insurers and their subsidiaries who are buying up clinics and physician practices-a trend that reduces competition, drives up costs, and limits patient choice.

The Corporate Crimes Against Health Care Act holds private equity firms and corporate executives accountable and empowers regulators to protect patients from private equity plundering hospitals, nursing homes, provider practices, and other health care entities with impunity.

Over the last decade, private equity fund assets have more than doubled, totaling $8.2 trillion in 2023. While private equity companies have purchased businesses in nearly every sector of the economy, their aggressive deal-making in the health care sector poses grave risks to patient health outcomes and raises fundamental concerns regarding the role of corporate interests in our health care system. Private equity companies routinely saddle companies they acquire with massive debt, sell off valuable assets, and extract exorbitant dividends and fees.

As a result, lax corporate accountability and transparency laws have provided cover for private equity's parasitic practices.

The Corporate Crimes Against Health Care Act would:

• Create a new criminal penalty of up to 6 years in prison for executives who loot health care entities like nursing homes and hospitals if that looting results in a patient's death.
• Provide state attorneys general and the DOJ with the power to claw back all compensation, including salaries, issued to private equity and portfolio company executives within a 10-year period before or after an acquired health care firm experiences serious, avoidable financial difficulties due to that looting.
• Authorize an associated civil penalty of up to 5 times the clawback amount.
• Prohibit payments from federal health programs to entities that sell assets or use assets for a loan collateral made to a REIT, with an exemption for current arrangements; repeal a rule in the Tax Code that allows taxable REIT subsidiaries to exert influence on the operations of health care entities; and remove the 20 percent pass-through deduction, passed in the 2017 Trump tax cuts, for all REIT investors.
• Require health care providers receiving federal funding to publicly report mergers, acquisitions, changes in ownership and control, and financial data, including debt and debt-to-earnings ratios.
• Mandate an HHS OIG report to Congress on the harms of corporatization in health care.

The Corporate Crimes Against Health Care Act was led by U.S. Senator Elizabeth Warren (D-MA) and Congresswoman Maggie Goodlander (D-N.H.). In addition to Merkley, this bill was cosponsored by Senators Ed Markey (D-MA), Richard Blumenthal (D-CT), and Peter Welch (D-VT).

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