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Pallone and Walden Launch Bipartisan Investigation into Private Equity Firms’ Role in Surprise Billing Practices

Sep 16, 2019
Press Release

Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ) and Ranking Member Greg Walden (R-OR) today launched a bipartisan investigation into practices of private equity firms surrounding surprise billing.  In letters to KKR & Co. Inc., Blackstone Group, and Welsh, Carson, Anderson, & Stowe, Pallone and Walden request information and documents pertaining to the firms’ ownership of private physician staffing and emergency transportation companies, which recent research shows are a leading source of surprise medical billing.

"We write to request information regarding [name of private equity firm] ownership, policies, and practices as it relates to third-party medical providers.  We are particularly interested in your firm’s relationship with any physician staffing companies and emergency transportation companies," write Pallone and Walden.  "In recent years, the Committee has heard countless heart-wrenching stories from insured individuals who have received thousands of dollars in medical bills after inadvertently receiving care from out-of-network providers."

Research from experts at the American Enterprise Institute and the Brookings Institution, referenced by Pallone and Walden in the letters, shows that surprise bills are frequently associated with services provided by an out-of-network emergency physician or ancillary clinician - such as a radiologist, anesthesiologist, pathologist, hospitalist, or assistant consulting surgeon - at an in-network health facility.

According to recent press reports, private equity firms are increasingly acquiring physician staffing companies and private emergency transportation companies contracting with hospitals.  The letter specifically references the acquisition of two of the largest emergency department outsourcing firms in the United States - EmCare and Team Health - by private equity firm KKR & Co. Inc. and Blackstone Group respectively.

"Evidence indicates that these physician staffing firms charge significantly higher in-network rates than their counterparts, thereby driving reimbursement upwards as they enter into staffing arrangements with hospitals," Pallone and Walden continued.  "We are concerned about the increasing role that private equity firms appear to be playing in physician staffing in our nation’s hospitals, and the potential impact these firms are having on our rising health care costs."

The investigation comes as the problem of surprise billing is on the rise in the United States, one in five emergency department visits and about nine percent of elective inpatient care at in-network health facilities results in a surprise bill. Recent reports show that the vast majority of Americans - eight in ten - want Congress to pass legislation to end surprise billing.

Pallone and Walden introduced bipartisan legislation - the No Surprises Act - to protect patients from surprise medical billing. The No Surprises Act passed unanimously out of the Energy and Commerce Committee in July.

To read the letters, click below:

KKR & Co. Inc.

Blackstone Group

Welsh, Carson, Anderson, & Stowe