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Around the nation: Senators introduce bill to jail healthcare execs who 'loot' organizations at the cost of patient care


Sen. Elizabeth Warren (D-Mass.) and Sen. Ed Markey (D-Mass.) have introduced the Corporate Crimes Against Health Care Act, which would introduce criminal and civil penalties for healthcare executives who "loot" their organizations to the detriment of patient care and the organization's ability to operate, in today's bite-sized hospital and health industry news from Florida, Massachusetts, and North Carolina.

  • Florida: District court Judge Robert Hinkle on Tuesday ruled that Florida's new restrictions on gender-affirming care for children are unconstitutional, adding that Gov. Ron DeSantis (R) and other lawmakers weren't acting in the interest of public health. According to Hinkle, DeSantis and other Republican lawmakers acted in a borderline racist and misogynist way by not allowing children to access treatments. "Enforcing this moral view is not, however, a legitimate state interest that can sustain this statute," Hinkle wrote. The ruling also struck down restrictions for adults that included requiring only doctors, rather than other medical professionals, to prescribe medicine for gender-affirming treatment and requiring annual X-rays without regard for circumstance. (Sarkissian, Politico, 6/11)
  • Massachusetts: Sens. Warren and Markey have introduced the Corporate Crimes Against Health Care Act, which would introduce criminal and civil penalties for healthcare executives who "loot" their organizations to the detriment of patient care and the organization's ability to operate. The bill includes measures allowing state and federal law enforcement to take back payments made to a healthcare entity's private equity backers if the organization ends up in financial trouble during the 10 years following. It also aims to disincentivize organizations from selling their assets to a real estate investment trust or using assets as collateral for a loan from those lenders. According to the bill, the criminal penalty of one to six years in prison would specifically apply to executives in cases where a "triggering event," such as a Chapter 11 bankruptcy filing, loan defaults, or late rent payments, "results in the death or injury of a patient or patients under the care of the target firm." (Muoio, Fierce Healthcare, 6/12)
  • North Carolina: A federal judge last week denied the Federal Trade Commission's (FTC) request for a preliminary injunction to stop Novant Health's $320 million acquisition of Lake Norman Regional Medical Center and Davis Regional Medical Center from Community Health Systems (CHS), leading FTC on Sunday to file an appeal to the U.S. Court of Appeals for the Fourth Circuit. FTC argued that Novant's deal could hurt consumers by eliminating competitors and increasing insurance rates. Novant and CHS said FTC's case will be unsuccessful since the agency failed with its request and didn't show any irreparable harm. (Jordan, The Charlotte Observer, 6/12)

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