U.S. Anesthesia Partners, one of the largest anesthesia practices in the nation, will give up exclusive contracts at five Colorado hospitals to settle allegations by the Colorado Attorney General’s Office that the company cornered the Colorado market, engaged in anti-competitive practices and drove prices up 30 percent over other firms.
The firm also will revise employment contracts that previously hindered its physicians from working at other practices. The company continues to deny any unlawful conduct.
“While we do not agree with the Attorney General’s viewpoint, this agreement preserves USAP’s physician-owned, clinician-led model,” Henri Acosta, a USAP physician in Colorado, said in a statement forwarded by company spokesman Tony Good.
USAP was created in 2012 by the private equity firm of Welsh, Carson, Anderson & Stowe, out of a $3.9 billion fund the financiers had raised. The anesthesia company grew rapidly by buying up the largest anesthesia practices in several cities — Denver, Dallas and Orlando, among them.
The growing role of private equity firms in U.S. physician practices has drawn criticism from politicians and watchdogs who say the financiers are enriching investors by monopolizing markets and raising prices.
In September, the Federal Trade Commission sued the company, alleging a decade-long scheme to drive up the price of anesthesiology by buying up more than a dozen practices to monopolize the market in Texas. The company denied those allegations and said the FTC lawsuit is based on flawed legal theories. USAP and Welsh, Carson executives also have described the consolidation of doctor practices as a means of creating “synergy.”
“Today’s action promises to reestablish a competitive market, which will enable better care for patients, lower costs for consumers, and fewer employment restrictions for health care professionals,” Colorado Attorney General Phil Weiser said in a statement.
The company’s rapid growth and price increases in Colorado were the subject of a Washington Post story in June. At the time, a spokesman for the company, Jeff Birnbaum, issued a statement denying that the company wielded monopoly power and that it faced “significant competition.” He also said that USAP’s price increases reflected broader market forces in the areas where it operates.
An investigation by Colorado officials concluded that six years after USAP entered the Colorado market, insurers estimated the firm garnered more than 80 percent of their expenditures on anesthesia services in Denver after entering into exclusive or semi-exclusive contracts to provide anesthesia services at 16 Denver-area hospitals.
With control of most of the market, USAP charged rates that were 30 percent to 40 percent higher than competing groups in the Denver metro area, which profited USAP and its private equity ownership, investigators alleged.
“USAP’s dominant market share — coupled with its near monopoly control over hospital inpatient surgical anesthesia in the Denver [market] — meant that these plans had little to no choice but to cave in to USAP’s demands for ever increasing reimbursement rates,” the Colorado investigators wrote.
Source link: https://www.washingtonpost.com/business/2024/02/27/colorado-regulators-force-anesthesiology-giant-shrink/