Democrat members of Congress reintroduced the Stop Wall Street Looting Act on Thursday in an effort to hold private equity firms accountable for the outcomes of the companies they acquire, including long-term care communities.

“Private equity takeovers are legal looting that make a handful of Wall Street executives very rich while costing thousands of people their jobs, putting valuable companies out of ­business, and in the case of health care, is literally a matter of life and death,” Sen. Elizabeth Warren (D) said in a statement. “Our bill is designed to close loopholes and end incentives for private equity pillaging.”

Warren and others have been highly critical of private equity’s role in long-term care. But with less than 5% of nursing homes being owned by private equity firms, some think the act is misguided.

“The reality is, owners of long-term care facilities are extremely diverse and are often run by Main Street, not Wall Street,” a spokeswoman from the American Health Care Association told McKnights. ”Focusing on private equity in long-term care has become a distraction from the real issues that impact the majority of providers, like Medicaid underfunding and workforce shortages.”

The legislation was revisited after hospital operator Steward Health Care filed for Chapter 11 bankruptcy in May, following its purchase by private equity firm Cerberus. Members of the firm received substantial pay days, according to a press release on Sen. Warren’s website, although hospitals, staff and patients under its umbrella were left neglected. 

The bill proposes reviewing every transaction since Steward Health Care was purchased, making firm members responsible for liabilities, including legal judgments, pension-related obligations and debt. The measure also would hold firms liable in the event that a resident is hurt.

“Private equity firms, which control nearly $15 trillion in assets, routinely prioritize quick, outsized profits, at the expense of workers, patients, renters and local economies as part of their business model,” Chris Noble, policy director for the private equity stakeholder project, said in a statement. “By addressing the systemic risks tied to debt-laden private equity buyouts, [The Stop Wall Street Looting Act] prioritizes the long-term health of businesses and communities over short-term profits for wealthy private equity executives.”