A new bill introduced in both the House and Senate this week would do something that nursing home reform advocates have demanded for years: strip Medicare funding from every nursing home owned and operated by a private equity firm in America.
That would affect more than 400 facilities nationwide.
What the Bill Would Do
The legislation was introduced Monday by Sen. Chris Murphy (D-CT) and Rep. Mary Gay Scanlon (D-PA), with co-sponsorship in the Senate from Sens. Richard Blumenthal (D-CT) and Jeff Merkley (D-OR). Under the bill, any nursing home or hospital that is currently owned or operated by a private equity firm would lose eligibility for Medicare reimbursement.
The sponsors framed it in stark terms. Private equity firms follow a “buy, strip, flip” playbook, they said — acquiring facilities, cutting costs to generate short-term returns, then selling off what remains, “leaving patients and entire communities to deal with the life-or-death consequences.”
It’s a charge the industry has heard before, and one now backed by a growing body of research. A major study published earlier this year found that PE-owned nursing homes have ten times the bankruptcy risk of their non-PE counterparts and an 11% higher mortality rate among residents.
Why This Moment Matters
The timing isn’t accidental. Private equity’s footprint in long-term care has expanded dramatically over the past decade. Industry reports have documented that more than half of U.S. nursing homes changed hands during the pandemic — and lower-rated facilities were disproportionately targeted in those transactions, raising alarms about whether profit-driven buyers were acquiring struggling homes without adequate accountability.
At the same time, Washington’s appetite for scrutiny of PE-backed healthcare has sharpened. CMS has stepped up affiliate risk enforcement, making it harder for facilities to distance themselves from the legal or financial problems of related entities. Several states have passed or are considering laws restricting who can buy a nursing home — in some cases barring buyers with active lawsuits from the process entirely.
This bill goes further than any state measure. Medicare is the lifeblood of most skilled nursing facilities, often accounting for the majority of revenue per resident day. Losing it wouldn’t just be painful — for most operators, it would be existential.
The Opposition It’ll Face
Don’t expect it to move quickly, if it moves at all. Industry groups will argue the bill is overbroad — that not all PE ownership leads to poor outcomes, and that cutting off Medicare could trigger closures, leaving residents with nowhere to go. Some operators will make the case that private capital has rescued facilities that public and nonprofit owners couldn’t sustain.
Those arguments have succeeded before. Similar legislation has been introduced in prior sessions and gone nowhere. The current Congress, controlled by Republicans, isn’t an obvious venue for bills targeting private equity investment.
But the political ground has shifted. Research linking PE ownership to worse resident outcomes keeps accumulating, and family advocacy groups have grown increasingly vocal. The bill’s sponsors are betting that mounting pressure eventually becomes policy.
Whether this version gets a committee hearing — or becomes leverage in a broader long-term care reform push — remains to be seen.
