![]() “Their model is to deliver short-term financial goals and in order to do that you have to cut corners,” said Mary Inman, an attorney who represents whistleblowers.įederal regulators, meanwhile, are almost blind to the incursion, since private equity typically acquires practices and hospitals below the regulatory radar. The lawsuits allege that some private equity firms, or companies they invested in, have boosted the bottom line by violating federal false claims and anti-kickback laws or through other profit-boosting strategies that could harm patients. Whistleblowers and injured patients are turning to the courts to press allegations of misconduct or other improper business dealings. It’s not just prices that are drawing scrutiny. And KHN found that in San Antonio, more than two dozen gastroenterology offices are controlled by a private equity-backed group that billed a patient $1,100 for her share of a colonoscopy charge - about three times what she paid in another state. ![]() New research by the University of California-Berkeley has identified “hot spots” where private equity firms have quietly moved from having a small foothold to controlling more than two-thirds of the market for physician services such as anesthesiology and gastroenterology in 2021. Subscribe to KFF Health News' free Morning Briefing. Most of the time, the private equity owners have avoided liability. KHN found that companies owned or managed by private equity firms have agreed to pay fines of more than $500 million since 2014 to settle at least 34 lawsuits filed under the False Claims Act, a federal law that punishes false billing submissions to the federal government with fines. Private equity-backed groups have even set up special “obstetric emergency departments” at some hospitals, which can charge expectant mothers hundreds of dollars extra for routine perinatal care.Īs private equity extends its reach into health care, evidence is mounting that the penetration has led to higher prices and diminished quality of care, a KHN investigation has found. Seeking quick returns, these investors are buying into eye care clinics, dental management chains, physician practices, hospices, pet care providers, and thousands of other companies that render medical care nearly from cradle to grave. Private equity is rapidly moving to reshape health care in America, coming off a banner year in 2021, when the deep-pocketed firms plowed $206 billion into more than 1,400 health care acquisitions, according to industry tracker PitchBook. FFL Partners and Kool Smiles had no comment but denied liability in court filings. ![]() Kool Smiles “overtreats, underperforms and overbills,” the family alleged in the suit, which was settled last year under confidential terms. ![]()
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