118 HR 9156 IH: Health Over Wealth Act
U.S. House of Representatives
2024-07-25
text/xml
EN
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I
118th CONGRESS
2d Session
H. R. 9156
IN THE HOUSE OF REPRESENTATIVES
July 25, 2024
Ms. Jayapal (for herself, Ms. Balint, Ms. Hoyle of Oregon, Ms. Norton, and Mr. Pocan) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Financial Services, Ways and Means, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Public Health Service Act to require the Secretary of Health and Human Services to enforce certain requirements with respect to for-profit corporations that own health care systems, and for other purposes.
1.

Short title
This Act may be cited as the “Health Over Wealth Act”.
2.

Amendment to the Public Health Service Act
The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the end the following:
“XXXIV

Requirements relating to private ownership in health care
3401.

Definitions
In this title:
(1)

Affiliate
The term affiliate means—
(A)
a person that directly or indirectly owns, controls, or holds with power to vote, 20 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 20 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, 20 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)

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; or
(D)
an association having a power or privilege that a private corporation, but not an individual or a partnership, possesses.
(3)

Covered firm
The term covered firm means a for-profit corporation that owns or is an affiliate of a health care entity.
(4)

Health care entity
The term health care entity means an entity that consists of 1 or more of the following health care providers:
(A)
A hospital.
(B)
A physician practice.
(C)
A skilled nursing facility.
(D)
A hospice facility.
(E)
A mental or behavioral health care provider.
(F)
An opioid treatment program.
(G)
A provider of services (as defined in section 1861(u) of the Social Security Act (42 U.S.C. 1395x(u)) or a supplier (as defined in section 1861(d) of such Act (42 U.S.C. 1395(d)) enrolled in the Medicare program.
(H)
Any other entity the Secretary determines appropriate.
(5)

Private equity fund
The term private equity fund means—
(A)
(i)
a person that 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;
(ii)
a venture capital fund, as defined in section 275.203(l)–1of title 17, Code of Federal Regulations (or successor regulations); or
(iii)
a sovereign wealth fund; and
(B)
directly, or through an affiliate, acts as a control person.
3402.

Health care ownership transparency
(a)

Required reporting
(1)

In general
The Secretary shall require each covered firm to submit to the Secretary, at such times as the Secretary determines appropriate, through the infrastructure established under paragraph (2), a report containing—
(A)
for a covered firm with respect to which there is a private equity fund that is a control person of the covered firm, the information described in subsection (b); and
(B)
for a covered firm not described in subparagraph (A), the information described in subsection (c).
(2)

Reporting infrastructure
The Secretary, in consultation with the Secretary of the Treasury and the Federal Trade Commission, shall establish infrastructure to collect the data submitted under paragraph (1).
(3)

Public availability
The Secretary shall make the data submitted under paragraph (1) publicly available.
(4)

Auditing
The Secretary shall periodically conduct audits to verify the data submitted under paragraph (1).
(5)

Annual reports
The Secretary shall submit to Congress annual reports describing trends identified through analysis of the data submitted under paragraph (1) relating to—
(A)
the financial status of covered firms; and
(B)
how the type of ownership of health care entities impacts access to health care, health care quality, and patient safety.
(b)

Reports submitted by covered firms owned by or affiliated with private equity
For purposes of subsection (a), and with respect to a covered firm described in subsection (a)(1)(A) and each private equity fund that is a control person of the covered firm, the information described in this subsection is the following information with respect to each year of the previous 10-year period:
(1)
The percentage of the equity of the private equity fund contributed by—
(A)
the general partners of the fund; and
(B)
the limited partners of the fund.
(2)
The level of debt of the covered firm at the end of the applicable year.
(3)
Information on the debt held by the private equity fund, including—
(A)
the dollar amount of total debt;
(B)
the percentage of debt for which the creditor is a financial institution in the United States;
(C)
the percentage of debt for which the creditor is a financial institution outside of the United States;
(D)
the percentage of debt for which the creditor is an entity that is located in the United States and is not a financial institution; and
(E)
the percentage of debt for which the creditor is an entity that is located outside of the United States and is not a financial institution.
(4)
The total amount of debt held by the covered firm that is categorized as—
(A)
liabilities;
(B)
long-term liabilities; and
(C)
payment in kind or zero coupon debt.
(5)
The average debt-to-equity ratio of—
(A)
each covered firm with respect to the private equity fund; and
(B)
the private equity fund.
(6)
The average debt-to-EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of each covered firm with respect to the private equity fund.
(7)
The total number of covered firms with respect to the private equity fund that experienced a default during the applicable year, and the name of any such covered firm.
(8)
The total gross asset value of each covered firm with respect to the private equity fund.
(9)
The gross performance of the private equity fund during the applicable year.
(10)
The total dollar amount of aggregate fees and expenses collected by the private equity fund, the manager of the fund, or related parties from covered firms with respect to the private equity fund, which shall—
(A)
be categorized by the type of fee; and
(B)
include a description of the purpose of the fees.
(11)
Any transaction, monitoring, management, performance, or other fees collected by the private equity fund from the covered firm.
(12)
In dollars, the total amount of regulatory assets under management by the private equity fund.
(13)
In dollars, the total amount of net assets under management by the private equity fund.
(14)
With respect to the applicable year, the difference obtained by subtracting the financial gains of the private equity fund by the fees that the general partners of the fund charged to the limited partners of the fund (commonly referred to as the “performance net of fees”).
(15)
Any management services agreements between the covered firm and the private equity fund, including a disclosure of fees paid through management services agreements.
(16)
Any other services procured by the covered firm from the private equity fund or any other company owned by the private equity fund.
(17)
Dividends paid by the covered firm to the private equity fund.
(18)
The names of—
(A)
the limited partners of the private equity fund;
(B)
the board members of the private equity fund; and
(C)
the leadership of the covered firm.
(19)
All political spending by the covered firm, including contributions, lobbying spending, and contributions to groups that do not share their donor list.
(20)
All political spending by the private equity fund, an affiliate of the fund, or an investment professional at the fund, with respect to—
(A)
health care related issues; or
(B)
members of congressional committees with oversight of health care.
(21)
Information on the extent to which the covered firm entered into any sale lease back transactions with the private equity fund.
(22)
Every asset purchased by the covered firm during the applicable year.
(23)
Information that is similar to the information required to be contained in a notification filed pursuant to the rules under subsection 7A(d)(1) of the Clayton Act (15 U.S.C. 18a(d)(1)).
(24)
Data related to real estate, mortgage, and lease payments.
(25)
Interest expenses and payments made by the private equity fund and each covered firm with respect to the private equity fund to comply with tax receivable agreements.
(26)
Average interest rate paid on secured and unsecured lines of credit by the private equity fund and each covered firm with respect to the private equity fund.
(27)
For the private equity fund and each covered firm with respect to the private equity fund, a list of—
(A)
all transactions with the 10 largest vendors or service providers; and
(B)
any new vendors or service providers.
(28)
For the private equity fund and each covered firm with respect to the private equity fund, the number of payments to staffing firms.
(29)
For the covered firm, the staffing of each health care provider owned by such covered firm, disaggregated by position and ratio of staff to patients.
(30)
For the covered firm, the staff retention rates, number of job postings, and vacancy rates, disaggregated by position, with respect to each health care provider owned by such covered firm.
(31)
For a covered firm that owns 1 or more hospitals, the number of beds in use and the capacity of each such hospital.
(32)
For the covered firm, the number of health care facilities or providers owned by such covered firm that have closed during such year.
(33)
For the covered firm, health care costs charged to patients and public and private health plans.
(34)
For the covered firm, the percentage and number of non-patient care areas in health care facilities owned by such covered firm that have been converted into patient care areas.
(35)
For the covered firm, reductions in the wages or benefits of health workers employed by health care providers owned by such covered firm.
(36)
For the private equity fund and each covered firm with respect to the private equity fund, complaints of, or citations for violations of, State or Federal worker protection laws, including charges of unfair labor practices, complaints of violations of State or Federal antidiscrimination laws, complaints of violations of wage and hour laws, and whistleblower complaints.
(37)
For the private equity fund and each covered firm with respect to the private equity fund, disclosure of any agreement or arrangement with a labor relations consultant or other independent contractor or organization for which a report is required to be filed under section 203(a)(4) of the Labor-Management Reporting and Disclosure Act of 1959 (29 U.S.C. 433(a)(4)).
(38)
Any other information that the Secretary determines relevant for evaluating the impact of private equity ownership of health care entities on the provision of health care, health care quality, and safety.
(c)

Information submitted by covered firms not owned by private equity
For purposes of subsection (a) and with respect to a covered firm described in subsection (a)(1)(B), the information described in this subsection is the following information with respect to each year of the previous 10-year period:
(1)
The level of debt of the covered firm at the end of the applicable year.
(2)
The total amount of debt held by the covered firm that is categorized as—
(A)
liabilities;
(B)
long-term liabilities; and
(C)
payment in kind or zero coupon debt.
(3)
The average debt-to-equity ratio of the covered firm.
(4)
The average debt-to-EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of the covered firm.
(5)
Whether the covered firm experienced a default during the applicable year.
(6)
The total gross asset value of the covered firm.
(7)
Dividends paid by the covered firm.
(8)
The names of the leadership of the covered firm.
(9)
All political spending by the covered firm, including contributions, lobbying spending, and contributions to groups that do not share their donor list.
(10)
Every asset purchased by the covered firm during the applicable year.
(11)
Information that is similar to the information required to be included in a notification filed pursuant to the rules under subsection 7A(d)(1) of the Clayton Act (15 U.S.C. 18a(d)(1)).
(12)
Data related to real estate, mortgage, and lease payments.
(13)
Interest expenses and payments made to comply with tax receivable agreements.
(14)
Average interest rate paid on secured and unsecured lines of credit.
(15)
A list of—
(A)
all transactions with the 10 largest vendors or service providers; and
(B)
any new vendors or servicer providers.
(16)
The number of payments to staffing firms.
(17)
The salaries of the executives of the covered firm and each health care entity owned by such covered firm.
(18)
The board membership of the covered firm and each health care entity owned by such covered firm.
(19)
The staff retention rates, number of job postings, and vacancy rates, disaggregated by position, with respect to each health care provider owned by the covered firm.
(20)
The percentage and number of non-patient care areas in health care facilities owned by the covered firm that have been converted into patient care areas.
(21)
Reductions in the wages or benefits of health workers employed by health care providers owned by the covered firm.
(22)
Complaints of, or citations for violations of, State or Federal worker protection laws, including charges of unfair labor practices, complaints of violations of State or Federal antidiscrimination laws, complaints of violations of wage and hour laws, and whistleblower complaints.
(23)
Disclosure of any agreement or arrangement with a labor relations consultant or other independent contractor or organization for which a report is required to be filed under section 203(a)(4) of the Labor-Management Reporting and Disclosure Act of 1959 (29 U.S.C. 433(a)(4)).
(24)
Any other information that the Secretary determines relevant for evaluating the impact of for-profit ownership of health care entities on the provision of health care, health care quality, and safety.
(d)

Nonduplication; reduction of administrative burden
To the maximum extent practicable, the Secretary shall—
(1)
ensure that the reporting requirements under this section are not duplicative of other reporting requirements under Federal law; and
(2)
reduce the administrative burden on covered firms of complying with such requirements.
3403.

Risk mitigation and accountability
(a)

Risk mitigation
(1)

Definition of essential services
In this subsection, the term essential services, with respect to a health care provider of a health care entity owned by or affiliated with a covered firm, means services that are necessary for preserving health care access, health care quality, and patient safety, as determined by the Secretary, including services for which the Secretary determines—
(A)
there are no equivalent services available within the same travel time;
(B)
that loss of the services would result in meaningful reductions in surge capacity that will negatively impact access to services, health care quality, and patient safety;
(C)
that loss of the services would limit health care access, health care quality, and patient safety for specific demographics of individuals based on sex, sexuality, race, nationality, age, or disability status; or
(D)
that loss of the services would have a meaningful impact on the ability of health care entities to provide care in the surrounding geographical area of the health care provider.
(2)

Mechanism to ensure risk mitigation
The Secretary shall establish a mechanism to ensure that the risks of covered firms with respect to which there is a private equity fund that is a control person of the covered firm are mitigated. Such mechanism may require each such covered firm—
(A)
to establish an escrow account with sufficient funding to cover operating and capital expenditures for not less than 5 years, including, in the case of the closure of a health care provider of a health care entity owned by or affiliated with such covered firm or if there are reductions of essential health services at such a health care provider, sufficient funding—
(i)
to pay out contract obligations to health care providers and other staff of such health care entity; and
(ii)
to provide supplemental funding to community health care or non-profit health care providers in the surrounding geographical area impacted by such closure or service reductions;
(B)
to obligate a minimum capital investment in any health care entity that is owned by or affiliated with such covered firm; or
(C)
to carry out such other activities as the Secretary determines appropriate to ensure that such covered firm provides a financial contribution sufficient to mitigate the impact of a potential closure, reduction of essential services, workforce shortage, or reduction in quality or safety of care or health care access.
(b)

Limitation on the use of real estate investment trusts in health care
(1)

Prohibition
No health care entity or covered firm may enter into agreement to sell to, or lease from, a real estate investment trust (as defined in section 856 of the Internal Revenue Code of 1986) an interest in real property if the terms of such sale or lease would lead to long-term weakened financial status of the health care entity or place the public health at risk.
(2)

Review of sale or lease terms
(A)

In general
The Secretary shall require each health care entity, or the covered firm that owns such health care entity, seeking to enter into an agreement described in paragraph (1) to submit to the Secretary for review the terms of the sale or lease, as applicable.
(B)

Standard
In conducting a review of a sale or lease under subparagraph (A), the Secretary shall determine whether the terms of such sale or lease would lead to long-term weakened financial status of the health care entity or place the public health at risk.
(C)

Consultation
The Secretary may consult with the relevant State attorney general in conducting a review under subparagraph (A).
(3)

Litigation authority
Except as provided in section 518 of title 28, United States Code (relating to litigation before the Supreme Court), attorneys designated by the Secretary may appear for the Department of Health and Human Services and represent the Department in any civil action brought in connection with a violation of paragraph (1).
(c)

Licensure
(1)

Definition of private equity firm
In this subsection, the term private equity firm means a for-profit corporation with respect to which there is a private equity fund that is a control person of the corporation.
(2)

Licenses
The Secretary shall issue licenses for private equity firms to invest, directly or indirectly, in or purchase a health care entity.
(3)

Fees
The Secretary may charge a fee for applications for licenses under paragraph (1) , which shall be deposited into a special account, the amounts in which shall remain available to the Secretary, until expended and without further appropriation, for funding for the National Health Service Corps, the community health centers program under section 330, teaching health centers that operate graduate medical education programs under section 340H, and other health workforce programs carried out by the Health Resources and Services Administration, and hospitals that have received disproportionate share hospital payments under section 1886 of the Social Security Act or section 1923 of such Act.
(4)

Denial; revocation
(A)

In general
The Secretary may deny or revoke a license under this subsection—
(i)
in cases in which the Secretary determines that the private equity firm—
(I)
has failed to comply with any of the provisions of this title; or
(II)
has engaged in price gauging, understaffing, access barriers, or such other metrics as the Secretary determines appropriate, with respect to the private equity firm’s ownership of health care entities; or
(ii)
for such other reason involving actions or practices of the private equity firm that may impact or interfere with access to, or quality of, health care, as the Secretary determines appropriate.
(B)

Divestment
A private equity firm the license of which is revoked under subparagraph (A) shall be required to divest from any investments in any health care entity.
(5)

Civil monetary penalties
Any private equity firm that violates a requirement of this subsection with respect to a health care entity shall be liable for a civil monetary penalty of not more than the amount that is equal to the amount of Federal funding received by the health care entity, which shall be deposited in the account described in paragraph (3).
3404.

Task Force review of the role of private equity and consolidation in health care
(a)

Establishment
The Secretary shall establish and operate a task force to monitor changes in the health care marketplace, to address and limit the role of private equity and consolidation in health care, and to address changes to the health care marketplace and private equity or market consolidation patterns that may create, continue, or exacerbate health care disparities or disparate health outcomes based on sex, sexuality, race, nationality, ethnicity, age, disability, immigration status, socioeconomic status, or location of residence (referred to in this section as the Task Force).
(b)

Composition
(1)

Chair
The Secretary shall chair the Task Force.
(2)

Co-chair
The Secretary shall select from among the members appointed under paragraph (3) a co-chair of the Task Force, who shall be a practicing health care provider.
(3)

Members
The Secretary shall appoint the members of the Task Force from among the following:
(A)
Academic experts and researchers with expertise on—
(i)
the role of private equity in healthcare; and
(ii)
the impact of mergers and acquisitions in healthcare on costs and patients.
(B)
Representatives from organizations focused on consumer protection, antitrust, health care equity, patient advocacy, and worker advocacy.
(C)
Hospital and health care staff (and the labor organizations representing such staff).
(D)
Patients.
(4)

Advisory members
In addition to the members described in paragraph (3), the Chair of the Federal Trade Commission and the Attorney General shall serve as advisory members of the Task Force.
(5)

Member appointment
Not later than 180 days after the date of enactment of this Act, the Secretary shall appoint the members of the Task Force—
(A)
in accordance with paragraph (2); and
(B)
using a competitive application process.
(c)

Recommendations
The Task Force shall—
(1)
identify best practices and, for purposes of subsection (d), develop recommendations, for limiting the role of private equity in health care, taking into account the implications on health outcomes and staff working conditions;
(2)
identify emerging trends within the health care marketplace that may undermine access to health care, quality of care, or patient safety or create financial instability and risk for health providers; and
(3)
develop legislative recommendations for preserving and expanding health care quality, safety, and access under this title.
(d)

Report
The Secretary shall submit to Congress annually a report—
(1)
on the recommendations developed subsection (c); and
(2)
that includes regulatory and legislative recommendations to address any adverse effects of health care consolidation, private equity’s involvement in health care, or any other change or emerging trend in the health care marketplace.
(e)

Moratorium
The Secretary may prohibit a private equity fund from purchasing voting securities of a covered firm, and may prohibit any merger or acquisition that would result in a private equity fund gaining control of voting securities of a covered firm, until the date on which the Secretary determines that the Task Force has had sufficient time to study and identify whether abuses are taking place in specific health care sectors or by health care entities related to price gauging, understaffing, access barriers, or such other metrics as the Secretary determines appropriate.
3405.

Corporate accountability
The Secretary shall—
(1)
maintain a corporate accountability data collection program for the reporting of any person subject to the requirements of this title for failure to comply with this title; and
(2)
furnish the information collected under paragraph (1) to the National Practitioner Data Bank established pursuant to the Health Care Quality Improvement Act of 1986.
3406.

Enforcement
(a)

State enforcement
(1)

State authority
Each State may require a person subject to the requirements of this title to satisfy such requirements applicable to the person.
(2)

Failure to implement requirements
In the case of a State that fails to substantially enforce the requirements of this title with respect to applicable persons in the State, the Secretary shall enforce the requirements of this title under subsection (b) to the extent that such requirements relate to actions prohibited under this title occurring in such State.
(b)

Secretarial enforcement authority
(1)

In general
If a person is found by the Secretary to be in violation of this title, the Secretary may apply a civil monetary penalty with respect to such person in an amount not to exceed $10,000 per violation.
(2)

Licensure penalties
A civil monetary penalty under paragraph (1) shall be in addition to any civil monetary penalty assessed under section 3403(c)(4).
(c)

Continued applicability of state law
This title shall not be construed to supersede any provision of State law that establishes, implements, or continues in effect any requirement or prohibition except to the extent that such requirement or prohibition prevents the application of a requirement or prohibition of this title.
3407.

Research
The Secretary shall conduct or support research on—
(1)
the impact of transitioning to a ban on for-profit corporations owning or investing in health care entities;
(2)
the impact of private equity investment in health care entities on—
(A)
health care costs;
(B)
access to health care;
(C)
clinical decision making;
(D)
health care entity recruitment and retention;
(E)
labor organization membership rates and collective bargaining power of health worker labor organizations;
(F)
health care worker pay, pensions, and other benefits;
(G)
health outcomes; and
(H)
health disparities;
(3)
the effectiveness of State law (including regulations) and State enforcement on ensuring acquisition of health care entities by covered firms does not place access to health care, health care quality, or patient safety at risk; and
(4)
compliance the CMS–855A Medicare Enrollment Application and other Federal ownership transparency requirements.”.
3.

Prohibited acts by investment companies with respect to health care
Section 12 of the Investment Company Act of 1940 (15 U.S.C. 80a–12) is amended by adding at the end the following:
“(h)
(1)
In this subsection, the term health care entity has the meaning given the term in section 3401 of the Public Health Service Act.
(2)
It shall be unlawful for any registered investment company to engage in any act, practice, or course of business that would strip an asset from a health care entity or otherwise undermine the quality or safety of, or access to, health care.
(3)
The Commission, in consultation with the Secretary of Health and Human Services, shall, for the purposes of this subsection, by rules and regulations define, and prescribe means reasonably designed to prevent, actions, practices, and courses of business described in paragraph (2).”.
4.

Amendments to title 11, United States Code
(a)

Priorities of claims in bankruptcy
(1)

In general
Section 507(a) of title 11, United States Code, is amended—
(A)
by redesignating paragraphs (1) through 10 as paragraphs (2) through (11), respectively;
(B)
by inserting before paragraph (2), as so redesignated, the following:
“(A)
First, withdrawal liability determined under part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1381 et seq.).”;
(C)
in the matter preceding subparagraph (A) of paragraph (2), as so redesignated, by striking “First:” and inserting “Second:”;
(D)
in paragraph (3), as so redesignated, by striking “Second,” and inserting “Third,”;
(E)
in paragraph (4), as so redesignated, by striking “Third,” and inserting “Fourth,”;
(F)
in the matter preceding subparagraph (A) of paragraph (5), as so redesignated, by striking “Fourth,” and inserting “Fifth,”;
(G)
in the matter preceding subparagraph (A) of paragraph (6), as so redesignated, by striking “Fifth,” and inserting “Sixth,”;
(H)
in the matter preceding subparagraph (A) of paragraph (7), as so redesignated, by striking “Sixth,” and inserting “Seventh,”;
(I)
in paragraph (8), as so redesignated, by striking “Seventh,” and inserting “Eighth,”;
(J)
in the matter preceding subparagraph (A) of paragraph (9), as so redesignated, by striking “Eighth,” and inserting “Ninth,”;
(K)
in paragraph (10), as so redesignated, by striking “Ninth,” and inserting “Tenth,”; and
(L)
in paragraph (11), as so redesignated, by striking “Tenth,” and inserting “Eleventh,”.
(2)

Technical and conforming amendments
(A)
Section 502(i) of title 11, United States Code, is amended by striking “section 507(a)(8)” and inserting “section 507(a)(9)”.
(B)
Section 503(b)(1)(B)(i) of title 11, United States Code, is amended by striking “section 507(a)(8)” and inserting “section 507(a)(9)”.
(C)
Section 507(d) of title 11, United States Code, is amended by striking “(a)(1), (a)(4), (a)(5), (a)(6), (a)(7), (a)(8) excluding subparagraph (F), or (a)(9)” and inserting “(a)(2), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9) excluding subparagraph (F), or (a)(10)”.
(D)
Section 523(a)(1)(A) of title 11, United States Code, is amended by striking “section 507(a)(3) or 507(a)(8)” and inserting “section 507(a)(4) or 507(a)(9)”.
(E)
Section 724 of title 11, United States Code, is amended—
(i)
in subsection (b)(2)—
(I)
by striking “section 507(a)(1)(C) or 507(a)(2)” and inserting “section 507(a)(2)(C) or 507(a)(3)”; and
(II)
by striking “507(a)(1)(A), 507(a)(1)(B), 507(a)(3), 507(a)(4), 507(a)(5), 507(a)(6), or 507(a)(7)” and inserting “507(a)(2)(A), 507(a)(2)(B), 507(a)(4), 507(a)(5), 507(a)(6), 507(a)(7), or 507(a)(8)”; and
(ii)
in subsection (f)—
(I)
in paragraph (1), by striking “section 507(a)(4)” and inserting “section 507(a)(5)”; and
(II)
in paragraph (2), by striking “section 507(a)(5)” and inserting “section 507(a)(6)”.
(F)
Section 726(b) of title 11, United States Code, is amended by striking “paragraph (1), (2), (3), (4), (5), (6), (7), (8), (9), or (10) of section 507(a)” and inserting “paragraphs (2) through (11) of section 507(a)”.
(G)
Section 752(a) of title 11, United States Code, is amended by striking “section 507(a)(2)” and inserting “section 507(a)(3)”.
(H)
Section 766 of title 11, United States Code, is amended—
(i)
in subsection (h), by striking “section 507(a)(2)” and inserting “section 507(a)(3)”; and
(ii)
in subsection (i)—
(I)
in paragraph (1), by striking “section 507(a)(2)” and inserting “section 507(a)(3)”; and
(II)
in paragraph (2), by striking “section 507(a)(2)” and inserting “section 507(a)(3)”.
(I)
Section 901 of title 11, United States Code, is amended by striking “507(a)(2)” and inserting “507(a)(3)”.
(J)
Section 943(b)(5) of title 11, United States Code, is amended by striking “section 507(a)(2)” and inserting “section 507(a)(3)”.
(K)
Section 1123(a)(1) of title 11, United States Code, is amended by striking “section 507(a)(2), 507(a)(3), or 507(a)(8)” and inserting “section 507(a)(3), 507(a)(4), or 507(a)(9)”.
(L)
Section 1129(a)(9) of title 11, United States Code, is amended—
(i)
in subparagraph (A), by striking “section 507(a)(2) or 507(a)(3)” and inserting “section 507(a)(3) or 507(a)(4)”;
(ii)
in the matter preceding clause (i) of subparagraph (B), by striking “section 507(a)(1), 507(a)(4), 507(a)(5), 507(a)(6), or 507(a)(7)” and inserting “section 507(a)(2), 507(a)(5), 507(a)(6), 507(a)(7), or 507(a)(8)”;
(iii)
in the matter preceding clause (i) of subparagraph (C), by striking “section 507(a)(8)” and inserting “section 507(a)(9)”; and
(iv)
in subparagraph (D), by striking “section 507(a)(8)” and inserting “section 507(a)(9)”.
(M)
Section 1191(e) of title 11, United States Code, is amended by striking “paragraph (2) or (3)” and inserting “paragraph (3) or (4)”.
(N)
Section 1222(a)(4) of title 11, United States Code, is amended by striking “section 507(a)(1)(B)” and inserting “507(a)(2)(B)”.
(O)
Section 1226(b)(1) of title 11, United States Code, is amended by striking “section 507(a)(2)” and inserting “section 507(a)(3)”.
(P)
Section 1322(a)(4) of title 11, United States Code, is amended by striking “section 507(a)(1)(B)” and inserting “section 507(a)(2)(B)”.
(Q)
Section 1326(b)(1) of title 11, United States Code, is amended by striking “section 507(a)(2)” and inserting “section 507(a)(3)”.
(R)
Section 1328(a)(2) of title 11, United States Code, is amended by striking “section 507(a)(8)(C)” and inserting “section 507(a)(9)(C)”.
(S)
Section 6(e) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff(e)) is amended, in the last sentence, by striking “section 507(a)(2)” and inserting “section 507(a)(3)”.
(b)

Confirmation of plan
Section 1129 of title 11, United States Code, is amended by adding at the end the following:
“(f)
Notwithstanding any other provision of this section, if the debtor is a health care business, the court, in confirming a plan, shall give substantial weight to the extent to which the plan would allow for maintenance of regional health care access, quality and safety of health care provided regionally, and health care provider and staff retention regionally.”.
5.

Maintenance of health care access relating to hospital discontinuation of services or closure
Section 1866 of the Social Security Act (42 U.S.C. 1395cc) is amended—
(1)
in subsection (a)(1)—
(A)
in subparagraph (X), by striking “and” at the end;
(B)
in subparagraph (Y)(ii)(V), by striking the period and inserting “, and”; and
(C)
by inserting after subparagraph (Y) the following new subparagraph:
“(Z)
beginning 60 days after the date of the enactment of this subparagraph, in the case of a hospital, to comply with the requirements of subsection (l) (relating to discontinuation of services or closure).”; and
(2)
by adding at the end the following new subsection:
“(l)

Requirements for hospitals relating to discontinuation of services or closure
(1)

Requirements
(A)

In general
For purposes of subsection (a)(1)(Z), except as provided in subparagraph (B), the requirements described in this subsection are that a hospital—
(i)
notify the Secretary, in accordance with paragraph (2), not less than 90 days prior to the discontinuation of services or full hospital closure;
(ii)
prohibit the discontinuation of essential services (as defined in paragraph (6)) during the notification period (as defined in such paragraph) unless there is a clear harm posed to patient or employee health or safety in the hospital continuing to furnish such services;
(iii)
respond to any inquiries by the Secretary relating to the implementation of this subsection, including the determination of essential services under paragraph (6)(C); and
(iv)
if applicable—
(I)
submit a mitigation plan and related information as described in paragraph (3); and
(II)
participate in the public comment and review process (including, if applicable, the alternative mitigation plan) described in paragraph (4).
(B)

Application in case of catastrophic events
In the case where a discontinuation of services or closure of a hospital is due to an unforeseen catastrophic event (as defined by the Secretary), the requirements described in subparagraph (A) shall apply, except—
(i)
the hospital shall provide the notification under clause (i) of such subparagraph not later than 30 days after the catastrophic event or as soon as feasible as determined by the Secretary; and
(ii)
clause (ii) of such subparagraph (relating to prohibiting the discontinuation of services) shall not apply.
(2)

Notification information
For purposes of paragraph (1)(A)(i), the notification under such paragraph shall include the following information with respect to a hospital:
(A)

Discontinuation of services
In the case where the hospital is discontinuing services (without full hospital closure):
(i)
The services that will be discontinued and number of hospital beds impacted.
(ii)
The number of individuals furnished such services annually and a breakdown of the type of insurance used by such individuals for such services.
(iii)
The number of impacted employees and what labor organization represents them (and the contact information for such organization).
(iv)
The names and addresses of any organized health care coalitions and community groups that represent the communities impacted by the discontinuation of such services.
(v)
Alternative providers of such services, including provider type, contact information, and distance and transportation time by car and public transit from the hospital.
(B)

Full hospital closure
In the case of full hospital closure:
(i)
Hospital ownership entities.
(ii)
The full extent of services that will no longer be furnished by the hospital.
(iii)
The number of individuals furnished services annually by the hospital, a description of the services furnished, and a breakdown of the type of insurance used by such individuals for such services.
(iv)
The number of impacted employees and, if applicable, what labor organizations represent them (and the contact information for each such organization).
(v)
The names and addresses of any organized health care coalitions and community groups that represent the communities impacted by the closure.
(vi)
Alternative providers, including provider type, contact information, and distance and transportation time by car and public transit from the hospital.
(vii)
Steps taken prior to the decision to close in order to avoid closure.
(viii)
Distribution of liquidation proceeds (cash or assets) or any payments (cash or assets) made to employees, owners, or contractors related to the closure.
(3)

Submission of mitigation plan and related information for essential services
(A)

Notification by secretary
If the Secretary determines that the discontinuation of services or closure of an applicable hospital would negatively impact access to essential services, the Secretary shall notify the applicable hospital of such determination.
(B)

Submission of mitigation plan and related information
If an applicable hospital receives a notification under subparagraph (A), the applicable hospital shall, not later than 15 days after receiving such notification, submit to the Secretary, the State health department, and the local department of public health—
(i)
a plan to—
(I)
preserve access to essential services for impacted communities through partnerships, commitments from surrounding facilities, transportation plan access, and preparation for surge response; and
(II)
support employees in transitioning to new positions within health care;
(ii)
information on workforce and public engagement to ensure awareness of the discontinuation of services or closure;
(iii)
a description of potential alternatives to the discontinuation of services or closure that the hospital considered and an explanation of why those alternatives are not a viable option; and
(iv)
a local market study to ascertain regional bed supply, payor mix distribution among all providers, demographic trends, and remaining health systems in the area.
(C)

Public availability
The Secretary shall make a mitigation plan and related information submitted by an applicable hospital under this paragraph available to the public on the internet website of the Centers for Medicare & Medicaid Services.
(4)

Public comment and review process; alternative mitigation plan
(A)

Public comment period
(i)

In general
The Secretary shall provide a public comment period of not less than 45 days with the opportunity to submit written comments regarding the impact of the potential discontinuation of services or closure of an applicable hospital.
(ii)

Notice
Notice of the opportunity to submit comments shall be published in the Federal Register and distributed to—
(I)
providers of services and suppliers that may be impacted by the discontinuation of services or closure of the applicable hospital;
(II)
any labor organization that represents any subdivision of employees of the applicable hospital;
(III)
organized health care coalitions and community groups that represent the communities impacted by the discontinuation of services or closure;
(IV)
the State health agency; and
(V)
the local department of public health.
(iii)

Recommendations of State health agency and local departments of public health
In reviewing a mitigation plan submitted by an applicable hospital under paragraph (3), the Secretary shall take into consideration any recommendations submitted by the State health agency and local departments of public health, as applicable, regarding whether such plan should be approved.
(B)

Alternative mitigation plan
(i)

In general
If, after reviewing the mitigation plan submitted by an applicable hospital under paragraph (3) and the comments submitted during the public comment period under subparagraph (A) with respect to the discontinuation of services or closure of the applicable hospital, the Secretary finds that the discontinuation of services or closure of the applicable hospital would have a significant impact on access to essential services, the Secretary shall work with the applicable hospital or other providers of services and suppliers in the area, as appropriate, to develop and implement an alternative plan to the plan submitted by the applicable hospital under paragraph (3) (referred to in this subsection as the “alternative mitigation plan”) in order to ensure continued access to essential services, which may include an agreement to delay the discontinuation of services or closure of the applicable hospital until the alternative mitigation plan is complete.
(ii)

Technical assistance
An alternative mitigation plan under clause (i) may include technical assistance or information on available funding mechanisms to support the furnishing of essential services.
(iii)

Collaboration
The Secretary should, to the extent practicable, collaborate with State and municipal government officials in the development of an alternative mitigation plan under clause (i).
(iv)

Public availability
The Secretary shall make any information submitted and the alternative mitigation plan developed under this paragraph available to the public on the internet website of the Centers for Medicare & Medicaid Services.
(C)

Implementation
The Secretary shall promulgate regulations to detail the required response time by an applicable hospital and the speed of the review process under this paragraph in order to ensure that such process can be completed with respect to an applicable hospital prior to the proposed service discontinuation date or closure date of the applicable hospital.
(D)

Prohibition
In the case where the Secretary finds that a hospital has violated the requirements of this subsection, the Secretary may prohibit the hospital and any hospital under the same hospital ownership entity from being eligible to enroll or reenroll under the program under this title under section 1866(j) until the earlier of—
(i)
the date that is 3 years after the date on which the hospital discontinues services or closes;
(ii)
the date on which the Secretary determines essential health services that were negatively impacted by the discontinuation or closure have been restored; or
(iii)
such time as the Secretary is satisfied with the mitigation plan submitted by the hospital under paragraph (3) or the alternative mitigation plan under paragraph (4).
(5)

Annual reports
The Secretary shall submit an annual report to Congress on the discontinuation of services and full closure of hospitals. Each report submitted under the preceding sentence shall include—
(A)
a description of trends in the discontinuation of services and closures of hospitals, including hospital ownership type, geographic location, types of services furnished, demographic served, and insurance type;
(B)
an analysis of the impact of the discontinuation of services and closures on health care access and ability to meet surge demand due to emergency (such as a pandemic or climate disaster); and
(C)
recommendations for such administrative or legislative changes as the Secretary determines appropriate to preserve access to essential services nationwide.
(6)

Definitions
In this subsection:
(A)

Applicable hospital
The term applicable hospital means a hospital that submits a notification under paragraph (1)(A)(i) of a discontinuation of services or full hospital closure.
(B)

Discontinuation
The term discontinuation may include any reduction or discontinuation of services furnished by an applicable hospital, including those that occur as part of a merger or acquisition agreement.
(C)

Essential services
The term essential services means, with respect to an applicable hospital, services that are necessary for preserving health care access (as determined by the Secretary), including services for which the Secretary determines—
(i)
there are no equivalent services available within the same travel time;
(ii)
that loss of the services would result in meaningful reductions in surge capacity that will negatively impact access to services;
(iii)
that loss of the services would limit health care access for specific demographics of individuals based on sex, sexuality, race, nationality, age, or disability status;
(iv)
that loss of the services would have a meaningful impact on the ability of health systems to respond to impacts of climate change; or
(v)
there is a health or health care-related emergency declaration status applicable to the surrounding geographical area of the hospital on the date on which the hospital submits notification under paragraph (1)(A)(i) of a discontinuation of services or full hospital closure.
(D)

Notification period
The term notification period means, with respect to an applicable hospital, the period beginning on the date on which the hospital submits notification under paragraph (1)(A)(i) of a discontinuation of services or full hospital closure and ending on the date of such discontinuation of services or closure.
(7)

No preemption of state law
Nothing in subsection (a)(1)(Z) or this subsection shall be construed to limit any rights or remedies under State or local law relating to protecting access to essential services or reviewing proposed hospital closures or reduction of services.”.
6.

Treatment of rents from qualified health care property
(a)

In general
Section 856(d)(2) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (B), by striking the period and inserting “, and” at the end of subparagraph (C), and by adding at the end the following new subparagraph:
“(D)
notwithstanding paragraphs (4), (6), and (8), any amount received or accrued directly or indirectly from qualified health care property (as defined in subsection (e)(6)(D)(i)).”.
(b)

Conforming amendments
(1)
Section 856(d)(8)(B) of the Internal Revenue Code of 1986 is amended—
(A)
by striking “or a qualified health care property (as defined in subsection (e)(6)(D)(i))”, and
(B)
by striking “qualified health care property or”.
(2)
Section 856(d)(9) of such Code is amended—
(A)
by striking “or a qualified health care property (as defined in subsection (e)(6)(D)(i))” in subparagraph (A),
(B)
by striking “or qualified health care property” each place it appears in subparagraph (A) and (B), and
(C)
by striking “or qualified health care properties” in subparagraph (A).
(c)

Effective date
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.