House panel investigating private equity firms’ role in surprise medical billing

The bipartisan leaders of the House Energy and Commerce Committee are launching an investigation into what role private equity firms may play in the problem of patients getting stuck with massive “surprise” medical bills.

Reps. Frank Pallone Jr. (D-N.J.) and Greg Walden (Ore.), the panel’s chairman and top Republican, respectively, sent letters on Monday to three private equity firms that own physician staffing companies. 

{mosads}Hospitals sometimes contract out the staffing of their emergency room or other departments to these physician staffing companies, who then can send massive bills to patients because the staffing company might not be in their insurance network even though the hospital as a whole is. 

“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,” Pallone and Walden wrote in the letters to the private equity firms KKR, Blackstone Group, and Welsh, Carson, Anderson & Stowe. 

The letters request a range of information from the companies, including which physician staffing companies they own, how much money they get from those companies, and how much money they specifically get for billing patients out-of-network. 

The investigation comes at the same time that the Energy and Commerce Committee, as well as bipartisan members of the Senate, push legislation to protect patients from being stuck with these surprise medical bills. 

The New York Times reported on Friday that two large physician staffing companies owned by some of these private equity firms, TeamHealth and Envision Healthcare, are helping to fund millions of dollars in ads against the legislation. 

Doctors and hospitals have been lobbying hard against the Energy and Commerce legislation, arguing that it would result in damaging cuts to payments to physicians, and arguing for a different system for addressing surprise bills. 

Supporters of the legislation argue the physician companies and their private equity owners are simply trying to stop any reform and protect their profits. 

“These guys are making a lot of money off the backs of patients who are playing by the rules to the best of their ability,” Walden said in a joint interview with Pallone on MSNBC on Friday. 

Pallone noted that lawmakers are mostly trying to overcome industry opposition to get the legislation passed, not a partisan divide, given that both parties largely agree on the issue. 

“Oftentimes both parties agree and even agree with the president, and it’s oftentimes in this case these Wall Street firms or other industries that try to prevent [it] when we’re trying to help the consumers,” Pallone said on MSNBC.

“Blackstone’s portfolio company TeamHealth fully supports legislation to end surprise medical bills through an approach called independent arbitration that has proven successful in New York and Texas,” a Blackstone spokesperson said. “TeamHealth also has a long-standing policy against balance billing its patients. We look forward to responding to this letter and outlining the company’s approach.”

Another complicating factor, though, is that the House Ways and Means Committee is working on its own, rival, bipartisan legislation on the subject, but has not put forward a timeline for when it will unveil the measure or consider it in committee.

This story was updated on Sept. 18 at 9:29 a.m.