Democrat senators accuse PE-backed US Anesthesia Partners of anticompetitive business practices

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Dive Brief:

  • Two powerful Democratic senators are suing US Anesthesiology Partners — one of the nation’s largest anesthesia practices — for unfair business practices and disclosures about its purchases and pricing.
  • In a letter sent to the CEO of USAP on Sunday Sen. Elizabeth Warren, D-Mass. and Richard Blumenthal, D-Conn. He alleged that the company had used it. Colorado has a monopoly on the power to raise prices for insurers and patients, enforce restrictive non-compete agreements on doctors, among other anti-competitive practices.
  • USAP is currently sued by the Federal Trade Commission regarding price collusion, which the USAP rejected.

Dive Insight:

USAP in 2011 It was formed in 2012 by Welsh, Carson, Anderson & Stowe, a private equity firm that acquired several anesthesia practices and consolidated them into one company. Over the next decade, USAP grew through the same process, buying other groups to create a large anesthesia provider in 12 states and Washington, DC.

Federal regulators have taken issue with the M&A strategy, which is called “bundling.” In its September filing, which focused on USAP’s footprint in Texas, the FTC alleged that USAP developed a monopoly in the state before raising its prices and entering into price-fixing agreements with other independent practices. USAP also made agreements to sideline competitors and keep them out of the market, the FTC said.

USAP filed a motion to dismiss The complaint earlier this month.

The organization also faced criticism. This summer follows a Washington Post investigation into similar practices in Colorado. The investigation cited in Warren and Blumenthal’s letter found that USAP had built the largest anesthesia group in the state and raised patient bills and insurance rates before continually raising prices on its services.

“USAP has engaged in anti-competitive practices that appear to be designed to raise prices and maximize profits, with detrimental effects on patients and doctors,” Warren and Blumenthal wrote. Persistent problems associated with PE participation in the US health care system.

The senators’ letter “contains many errors and grossly misrepresents our organization,” which is physician-owned and operated and provides quality care; USP A spokesperson told Healthcare Div.

Despite controversy over negative effects on medical quality and cost, PE firms have acquired hundreds of physician practices across America in recent years. A study from 2022 found When private equity takes over doctors’ practicesOn average, they raised the price by 20%.

In certain markets, Some companies currently own more than 30%. According to the American Antitrust Institute, practices in a particular profession.

Summary Historically, M&A has been a difficult type of deal with regulators and regulators. however, New merger guidelines have been released by the FTC Regulators could be given more power to veto deals as early as this summer, which could slow down merger activity.

Warren and Blumenthal have asked USAP by Dec. 11 to provide information on executive compensation, dividends paid to investors, past acquisitions, earnings and per-practice rates and non-compete clauses on the doctors.

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