Corporate Crimes Against Health Care Act

The Corporate Crimes Against Health Care Act was introduced on June 11th by Senator Elizabeth Warren (D-MA) and Ed Markey (D-MA). This bill is meant to “root out corporate greed and private equity abuse” inside nursing homes, assisted living communities, home health agencies, hospices, and other “healthcare entities.” This bill is the latest effort to reveal financial transparency toward private equity and real estate investments in nursing homes.

The legislation of this bill is directed towards healthcare entities controlled by corporate entities i.e. real estate investment trusts and private funds. Private equity funds have doubled in 2023, totaling $8.2 trillion. Although private equity funds purchase many companies in almost every sector of the economy, their aggressive and harsh deal-making in the healthcare field puts patient health at risk and abuses of taxpayer dollars.

This bill would include a criminal penalty for executives if their actions result in a “triggering event” or a resident death/injury.  There will also be power granted to state attorneys general and the Department of Justice to take back any compensation, including salaries, that were issued to the private equity companies within ten years before or after the acquired healthcare facility incident. An authorized civil penalty of up to five times the claw back amount will also be proposed.

This bill will also prohibit payments from the federal health programs to entities that sell or use assets for loans made out to REIT, this excludes current arrangements. There will be a requirement from healthcare providers to receive federal funding to publicly report mergers, acquisitions, any change in ownership/control, and financial data, including debt and debt-to-earnings ratio.

Finally, there will be a requirement from the Health and Human Services Office of Inspector General to produce a report within three years of enactment that “evaluates profit-driven practices, including cost-cutting practices and revenue-enhancing practices, in healthcare delivery,” including overbilling or up-coding, inflated patient/resident assessments, executive and provider compensation “designed to increase revenue or profits, such as bonuses based on productivity, relative value units or service volume,” staff reductions, the substitution of caregivers with technology, service mix changes to maximize
revenue, and more” to be sent to Congress.

Clif Porter, senior vice president of government relations at the AHCA/NCAL, stated that their groups support financial transparency and reporting.