To amend title XI of the Social Security Act to increase transparency of certain health-related ownership information.

I 118TH CONGRESS 1ST SESSION H. R. 3262 To amend title XI of the Social Security Act to increase transparency of certain health-related ownership information. IN THE HOUSE OF REPRESENTATIVES MAY 11, 2023 Ms. SCHAKOWSKY (for herself and Mr. BILIRAKIS) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be sub- sequently 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 title XI of the Social Security Act to increase transparency of certain health-related ownership information. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. MANDATORY REPORTING WITH RESPECT TO 3 CERTAIN HEALTH-RELATED OWNERSHIP IN- 4 FORMATION. 5 Part A of title XI of the Social Security Act (42 6 U.S.C. 1301 et seq.) is amended by adding at the end 7 the following new section: 8 VerDate Sep 11 2014 01:26 May 25, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3262.IH H3262 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 3262 IH ‘‘SEC. 1150D. MANDATORY REPORTING WITH RESPECT TO 1 CERTAIN HEALTH-RELATED OWNERSHIP IN- 2 FORMATION. 3 ‘‘(a) MANDATORY REPORTING WITH RESPECT CER- 4 TAIN HEALTH-RELATED OWNERSHIP INFORMATION.— 5 ‘‘(1) INITIAL REPORT.—Not later than January 6 1, 2025 (or in the case of a specified entity formed 7 after January 1, 2025, within 60 days of becoming 8 a specified entity), each specified entity (as defined 9 in subsection (f)(5)) shall submit to the Secretary, 10 in a form and manner specified by the Secretary, a 11 report containing the following information: 12 ‘‘(A) Data on mergers, acquisitions, and 13 changes in ownership with respect to such spec- 14 ified entity for the previous 1-year period. 15 ‘‘(B) In the case that a specified entity is, 16 or includes, a hospital, the additional informa- 17 tion described in subsection (b). 18 ‘‘(C) As applicable, the name, address, and 19 business structure of the parent company of 20 such specified entity (including the tax status of 21 such parent company), as of the date of the 22 submission of this report. 23 ‘‘(D) Any other information with respect to 24 ownership of a specified entity, as determined 25 by the Secretary. 26 VerDate Sep 11 2014 01:26 May 25, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3262.IH H3262 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 3262 IH ‘‘(2) SUBSEQUENT REPORTS.—Not later than 1 1 year after submitting the report under paragraph 2 (1), and annually thereafter, each specified entity 3 shall submit to the Secretary an updated report, in- 4 cluding— 5 ‘‘(A)(i) data on mergers, acquisitions, and 6 changes in ownership with respect to such enti- 7 ties for the previous 1-year period; and 8 ‘‘(ii) any other information with respect to 9 ownership of a specified entity, as determined 10 by the Secretary; and 11 ‘‘(B) in the case that a specified entity is, 12 or includes, a hospital, the additional informa- 13 tion described in subsection (b). 14 ‘‘(b) ADDITIONAL INFORMATION SUBMITTED BY 15 CERTAIN SPECIFIED ENTITIES.—For purposes of para- 16 graphs (1)(B) and (2)(B) of subsection (a), with respect 17 to a specified entity that is, or includes, a hospital, the 18 information described in this subsection is the following 19 information with respect to the previous 1-year period: 20 ‘‘(1) The business structure of the specified en- 21 tity, including the business type and the tax status 22 of such entity. 23 ‘‘(2) The average debt-to-earnings ratio of the 24 specified entity. 25 VerDate Sep 11 2014 01:26 May 25, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3262.IH H3262 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 3262 IH ‘‘(3) The average amount of debt incurred— 1 ‘‘(A) by the hospital; and 2 ‘‘(B) by the entire specified entity. 3 ‘‘(4) Information with respect to real estate 4 leases and purchases for property used, or intended 5 to be used, to furnish or otherwise support the provi- 6 sion of health care services. 7 ‘‘(5) In the case of a non-profit hospital, a sub- 8 sidiary of a non-profit hospital, or a 501(c)(3) entity 9 that shares common ownership with a non-profit 10 hospital, capital gains investments (disaggregated by 11 the type of investment) and any taxes paid on such 12 gains from such investments. 13 ‘‘(6) As applicable, information with respect to 14 the parent company of such specified entity. 15 ‘‘(c) PUBLIC REPORTING.—Not later than January 16 1, 2027, and annually thereafter, the Secretary shall post 17 on a publicly available website of the Department of 18 Health and Human Services a report with respect to the 19 previous 1-year period, including— 20 ‘‘(1) the number of specified entities reporting 21 for such year, disaggregated by the business struc- 22 ture of each specified entity; 23 ‘‘(2) the number of owners of each specified en- 24 tity; 25 VerDate Sep 11 2014 01:26 May 25, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3262.IH H3262 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 3262 IH ‘‘(3) any change in ownership for each specified 1 entity; 2 ‘‘(4) any change in the tax status of a specified 3 entity; 4 ‘‘(5) an analysis of trends in horizontal and 5 vertical consolidation, disaggregated by business 6 structure and provider type; and 7 ‘‘(6) as applicable, the name, address, and busi- 8 ness structure of the parent company of such speci- 9 fied entity (including the business type and the tax 10 status of such parent company). 11 ‘‘(d) AUDITS.—The Secretary shall conduct an an- 12 nual audit consisting of a random sample of specified enti- 13 ties to verify compliance with the requirements of this sec- 14 tion and the accuracy of information submitted pursuant 15 to this section. 16 ‘‘(e) PENALTY FOR FAILURE TO REPORT.—If a spec- 17 ified entity fails to provide a complete report under sub- 18 section (a), or submits a report containing false informa- 19 tion, such entity shall be subject to a civil monetary pen- 20 alty of not more than $5,000,000 for each such report 21 not provided or containing false information. Such penalty 22 shall be imposed and collected in the same manner as civil 23 money penalties under subsection (a) of section 1128A are 24 imposed and collected under that section. 25 VerDate Sep 11 2014 01:26 May 25, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3262.IH H3262 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 3262 IH ‘‘(f) INAPPLICABILITY OF PAPERWORK REDUCTION 1 ACT.—Chapter 35 of title 44, United States Code, shall 2 not apply to collections of information made under this 3 section. 4 ‘‘(g) DEFINITIONS.—In this section: 5 ‘‘(1) HEALTH PLAN.—The term ‘health plan’ 6 has the meaning given such term in section 7 1128C(c). 8 ‘‘(2) HOSPITAL.—The term ‘hospital’ has the 9 meaning given such term in section 1861(e). 10 ‘‘(3) INDEPENDENT FREESTANDING EMER- 11 GENCY DEPARTMENT.—The term ‘independent free- 12 standing emergency department’ has the meaning 13 given such term in section 2799A–1(a)(3)(D) of the 14 Public Health Service Act. 15 ‘‘(4) PRIVATE EQUITY COMPANY.—The term 16 ‘private equity company’ means a publicly traded or 17 non-publicly traded company that collects capital in- 18 vestments from individuals or entities and purchases 19 an ownership share of a provider of services (as de- 20 fined in section 1861(u)). 21 ‘‘(5) SPECIFIED ENTITY.—The term ‘specified 22 entity’ means— 23 ‘‘(A) a hospital; 24 VerDate Sep 11 2014 01:26 May 25, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3262.IH H3262 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 3262 IH ‘‘(B) a physician-owned physician practice 1 with more than 25 physicians for a year; 2 ‘‘(C) a physician practice owned by a hos- 3 pital, a health plan, a private equity company, 4 or a venture capital firm; 5 ‘‘(D) an ambulatory surgical center meet- 6 ing the standards specified under section 7 1832(a)(2)(F)(i); or 8 ‘‘(E) an independent freestanding emer- 9 gency department. 10 ‘‘(6) VENTURE CAPITAL FUND.—The term ‘ven- 11 ture capital fund’ has the meaning given such term 12 in section 275.203(l)–1of title 17, Code of Federal 13 Regulations.’’. 14 Æ VerDate Sep 11 2014 01:26 May 25, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H3262.IH H3262 kjohnson on DSK79L0C42PROD with BILLS