HR7920

HR7920, the "Take Back Our Hospitals Act of 2026," amends Section 1862 of the Social Security Act to prohibit Medicare payments to hospitals or skilled nursing facilities owned or controlled by "covered firms" or their affiliates. This means facilities currently owned by private equity firms or similar investment vehicles will lose Medicare reimbursement if they do not divest within three years of the bill's enactment. New facilities acquired or established by these firms after enactment will be immediately ineligible for Medicare payments. This is a direct attack on the private equity business model in healthcare, which often relies on Medicare and Medicaid reimbursements. The money trail is clear: Medicare payments, a substantial portion of revenue for many hospitals and skilled nursing facilities, will cease for those under the specified ownership. This will force private equity firms to sell off their healthcare assets or operate them without Medicare revenue, which is largely unsustainable. The bill also establishes joint and several liability for covered firms for any penalties incurred by their facilities, increasing financial risk. There is no new funding or appropriation; rather, it re-routes existing Medicare payments away from specific ownership structures. Historically, legislative efforts to restrict private ownership in healthcare have faced strong lobbying. For example, in 2010, the Affordable Care Act included provisions that restricted physician ownership in new hospitals, leading to a significant slowdown in physician-owned hospital development. While not directly comparable in scope, that action demonstrated Congress's willingness to regulate ownership structures in healthcare. The market reaction to such restrictions typically involves a re-evaluation of assets within the targeted sector. For instance, when the Centers for Medicare & Medicaid Services (CMS) finalized the 2019 Patient-Driven Payment Model (PDPM) for skilled nursing facilities, which significantly altered reimbursement, major SNF operators like and $NHC experienced stock volatility as investors adjusted to the new payment landscape. Specific companies that stand to lose are publicly traded healthcare providers with significant private equity ownership or those that could be acquired by private equity in the future. While direct private equity firms are not publicly traded, their portfolio companies, if publicly traded, would be impacted. Major publicly traded hospital systems like HCA Healthcare ($HCA), Universal Health Services ($UHS), Tenet Healthcare ($TEN), and LifePoint Health could see reduced acquisition interest from private equity, impacting their valuations. Skilled nursing facility operators such as Skilled Healthcare Group, National HealthCare Corporation ($NHC), and Ensign Group ($ENSG) would face direct revenue loss if they fall under the "covered firm" definition or are acquired by such firms. Real Estate Investment Trusts (REITs) specializing in healthcare, such as Omega Healthcare Investors ($OHI), Sabra Health Care REIT ($SBRA), and Ventas ($VTR), which lease properties to SNFs and hospitals, would also be negatively impacted by the financial distress of their tenants. This bill has been referred to the Committee on Ways and Means and the Committee on Energy and Commerce. The sponsorship by Rep. Scanlon (D-PA-5) and 7 cosponsors, including senior members like Ms. DeLauro, indicates moderate momentum. The next step is committee consideration. If it passes committee, it moves to a floor vote. Given the three-year grace period for existing facilities, the immediate market impact will be a re-pricing of private equity-owned healthcare assets and a dampening of future private equity investment in the sector, rather than an immediate operational shutdown.