- Two powerful Democrat senators are accusing U.S. Anesthesiology Partners — one of the largest anesthesiology practices in the country — of unfair business practices, and demanding information about its acquisitions and pricing.
- In a letter sent Sunday to USAP’s chief executive, Sens. Elizabeth Warren, D-Mass., and Richard Blumenthal, D-Conn., allege that the company leveraged its monopoly power in Colorado to inflate prices for insurers and patients, along with other anticompetitive practices like enforcing restrictive non-compete agreements on its physicians.
- USAP is currently being sued by the Federal Trade Commission over allegations of price collusion, which USAP has denied.
USAP was created in 2012 by private equity firm Welsh, Carson, Anderson and Stowe by acquiring multiple anesthesiology practices and bundling them into a single company. Over the next decade, USAP grew through the same practice, purchasing other groups to create a massive anesthesiology provider in 12 states and Washington, D.C.
Federal regulators have taken issue with that M&A strategy, which is called “roll-ups.” In its suit filed in September that focuses on USAP’s footprint in Texas, the FTC alleges USAP grew into a monopoly in the state before hiking its rates and making price-setting agreements with other independent practices. USAP also made deals to sideline potential competitors to keep them out of the market, according to the FTC.
USAP filed a motion to dismiss the complaint earlier this month.
The firm has also faced criticism for similar practices in Colorado following a Washington Post investigation this summer. The investigation, which is cited in Warren and Blumenthal’s letter, found that USAP built the largest anesthesiology group in the state before continually raising prices for its services, boosting patient bills and insurance rates.
“USAP has engaged in anticompetitive practices that appeared to be designed to jack up prices and suck up as much profit as possible, with detrimental effects to patients and doctors,” Warren and Blumenthal wrote, later adding those practices are “emblematic of the long-standing problems associated with PE’s involvement” in America’s healthcare system.
The senators’ letter “contains many inaccuracies and greatly misrepresents our organization,” which is physician-owned and led and provides quality care, a USAP spokesperson told Healthcare Dive.
PE firms have acquired hundreds of physician practices across the U.S. in recent years, despite controversy over negative effects on medical quality and cost. One study from 2022 found when private equity took over physician practices, they raised prices by 20% on average.
In certain markets, some firms currently own more than 30% of practices in a given specialty, according to the American Antitrust Institute.
Roll-ups have historically been a difficult type of M&A for regulators to tackle. However, new merger guidelines released by the FTC earlier this summer could give regulators more leverage to challenge the deals, potentially cooling roll-up activity.
Warren and Blumenthal asked USAP to provide information on executive compensation, dividends paid to investors, past acquisitions, revenue and rates per practice and non-compete clauses on its doctors by Dec. 11.