Congress moves to ban private equity from owning Medicare hospitals
S. 4085 — Take Back Our Hospitals Act of 2026 · Filed by Christopher Murphy (D-CT) · 2 cosponsors · Introduced Mar 12, 2026 · Referred to committee
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What it does
This bill amends Medicare law to prohibit payments to hospitals and skilled nursing facilities owned or controlled by private equity firms, private equity-backed corporations, or real estate investment trusts (REITs). Existing facilities owned by these entities have a 3-year grace period to divest before losing Medicare eligibility. The bill defines "control" broadly to include entities with 10% or more voting power, and imposes joint and several liability on the owning firm for any penalties.
Why we flagged it
The bill's core mechanism is a categorical exclusion from Medicare for a specific class of healthcare owners (PE firms and REITs), not a subsidy, deregulation, or procedural reform. It is a direct restriction on who may participate in a federal program.
What the text implies
- The 3-year grace period creates a fire-sale market for PE-owned hospitals and nursing homes, potentially depressing valuations and forcing rapid ownership transfers that may not preserve service quality or employment.
- Joint and several liability on parent firms may incentivize PE sponsors to strip assets or abandon underperforming facilities rather than divest them, leaving communities without care.
The full analysis lists 5 implications of this text.
Who stands to gain
non-PE-owned hospital operators and health systems (reduced competition for Medicare patients); potential acquirers of divested PE-backed facilities (fire-sale pricing opportunity)