Surprise billing law helped PE-backed providers
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A select group of private equity-backed physician practices benefited from the federal process for resolving billing disputes for out-of-network care, collecting payouts well above what insurers would have paid in-network, an analysis of 2023 data shows.
Why it matters: The findings from Georgetown University researchers in Health Affairs raise more questions about whether the No Surprises Act is actually having a dampening effect on health costs and premiums paid by consumers, as was projected.
What they found: About 70% of the 657,000 new cases submitted to arbitration in 2023 came from just four organizations, all backed by private equity: Team Health, SCP Health, Radiology Partners, and Envision.
- Two organizations — Team Health and Singleton Associates, which is part of Radiology Partners — won more than 90% of their cases in the last three quarters of 2023.
- Team Health typically won about double the inflation-adjusted median rate insurers paid in-network providers while Singleton collected up to eight times that in the last three quarters.
- Radiologists, surgeons, and neurologists were overall the most successful using the process, while hospitals won less frequently and collected lower payouts.
Team Health, in a statement, blamed big health insurers for abusing the No Surprises Act to boost their profits.
- "TeamHealth has won an overwhelming majority of IDR cases because insurers severely and chronically underpay for emergency and lifesaving medical care," it said. "TeamHealth would prefer to be in-network at fair and reasonable rates."
- Envision, in a statement, said is no longer wholly owned by KKR or private equity and has had a number of institutional investors and an independent board of directors since the beginning of November 2023.
Between the lines: A Brookings Institution analysis earlier this year found median arbitration payouts during the first half of 2023 for emergency care, imaging, and neonatal and pediatric critical care were at least 3.7 times what Medicare would pay.
- As we previously wrote, such findings suggest being out of network may be more attractive now because patients under the surprise billing law are no longer the ones being hit with big bills.
What's ahead: The ground rules for the arbitration process and the calculation of payouts could still change. The process for settling surprise billing disputes has been mired in litigation, including a district court decision last year that slowed the filing of new cases.
Editor's note: This story has been updated with comment from Team Health and Envision.
