Limitation on the use of real estate investment trusts in health care

(a) In general (1) Prohibition No health care entity or covered firm may enter into agreement to sell to, or lease from, a real estate investment trust (as defined in section 856 of the Internal Revenue Code of 1986) an interest in real property if the terms of such sale or lease would lead to long-term weakened financial status of the health care entity or place the public health at risk. (2) Review of sale or lease terms (A) In general The Secretary of Health and Human Services (referred to in this section as the Secretary) shall require each health care entity, or the covered firm that owns such health care entity, seeking to enter into an agreement described in paragraph (1) to submit to the Secretary for review the terms of the sale or lease, as applicable. (B) Standard In conducting a review of a sale or lease under subparagraph (A), the Secretary shall determine whether the terms of such sale or lease would lead to long-term weakened financial status of the health care entity or place the public health at risk. (C) Consultation The Secretary may consult with the relevant State attorney general in conducting a review under subparagraph (A). (3) Litigation authority Except as provided in section 518 of title 28, United States Code (relating to litigation before the Supreme Court), attorneys designated by the Secretary may appear for the Department of Health and Human Services and represent the Department in any civil action brought in connection with a violation of paragraph (1). (b) Enforcement (1) State enforcement (A) State authority Each State may require a person subject to the requirements of this section to satisfy such requirements applicable to the person. (B) Failure to implement requirements In the case of a State that fails to substantially enforce the requirements of this section with respect to applicable persons in the State, the Secretary shall enforce the requirements of this section under paragraph (2) to the extent that such requirements relate to actions prohibited under this section occurring in such State. (2) Secretarial enforcement authority If a person is found by the Secretary to be in violation of this section, the Secretary may apply a civil monetary penalty with respect to such person in an amount not to exceed $10,000 per violation. (3) Continued applicability of State law This section shall not be construed to supersede any provision of State law that establishes, implements, or continues in effect any requirement or prohibition except to the extent that such requirement or prohibition prevents the application of a requirement or prohibition of this section. (c) Definitions In this section: (1) Affiliate The term affiliate means— (A) a person that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of another entity, other than a person that holds such securities— (i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or (ii) solely to secure a debt, if such entity has not in fact exercised such power to vote; (B) a corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by another entity (referred to in this subparagraph as a covered entity), or by an entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the covered entity, other than an entity that holds such securities— (i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or (ii) solely to secure a debt, if such entity has not in fact exercised such power to vote; (C) a person whose business is operated under a lease or operating agreement by another entity, or person substantially all of whose property is operated under an operating agreement with that other entity; or (D) an entity that operates the business or substantially all of the property of another entity under a lease or operating agreement. (2) Corporation The term corporation means— (A) a joint-stock company; (B) a company or partnership association organized under a law that makes only the capital subscribed or callable up to a specified amount responsible for the debts of the association, including a limited partnership and a limited liability company; (C) a trust; or (D) an association having a power or privilege that a private corporation, but not an individual or a partnership, possesses. (3) Covered firm The term covered firm means a for-profit corporation that owns or is an affiliate of a health care entity. (4) Health care entity The term health care entity means an entity that consists of 1 or more of the following health care providers: (A) A hospital. (B) A physician practice. (C) A skilled nursing facility. (D) A hospice facility. (E) A mental or behavioral health care provider. (F) An opioid treatment program. (G) A provider of services (as defined in section 1861(u) of the Social Security Act (42 U.S.C. 1395x(u)) or a supplier (as defined in section 1861(d) of such Act (42 U.S.C. 1395(d)))) enrolled in the Medicare program. (H) Any other entity the Secretary determines appropriate.