Congress Investigates Private Equity Firm Connection to Surprise Medical Bills
By Jaie Avila
When you go to the emergency room in San Antonio, there’s a good chance the doctor who treats you doesn’t work for the hospital. News 4 Trouble Shooter Jaie Avila has uncovered some local doctors actually work for one of the biggest investment firms in the country.
Congress is investigating whether this troublesome connection is to blame for the rise in surprise medical billing. Members of Congress are taking a look at private equity firms that have been buying up physician staffing companies across the nation, including here in San Antonio.
April Ray received what seemed like a typical surprise bill. She went to Methodist Specialty and Transplant Hospital for gallbladder surgery because it was in her insurance network. Her plan covered the hospital and the surgeon, but then she received an $1,800 out-of-network bill from another doctor on the team.
“I expected to get the one bill because they were in-network with my insurance and then all of a sudden I got this huge bill and panicked,” April says.
Like many hospitals, Methodist outsources some of its physician staffing to separate companies. The bill April received was from a physician group called Kensington Row Inpatient Services.
My research found Kensington Row is one of dozens of physician staffing companies owned by parent company Envision Healthcare. And Envision is owned by KKR, Kohlberg Kravis Roberts, one of the biggest private equity firms in the country.
Private equity firms take money from big investors and buy a company, then make changes at the company to maximize profits. So, it can turn around and sell the company for a higher price later.
Researchers at Yale did a study that says when another of Envision Healthcare’s staffing companies, EmCare, landed a contract with a hospital, they “immediately exit (insurance) networks and bill as out-of-network providers” then “raise their prices by 96 percent” over what the prior physician group in that hospital charged.
“Those firms have realized that surprise medical billing can generate a lot of profit, can make them a lot of money,” says Stacey Pogue with the Center for Public Policy Priorities in Austin.
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