Autumn McClain  |  April 8, 2020

Category: Legal News

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Are surprise medical bills supported by private equity funding

In most cases, consumers can research and compare prices and options in order to decide whether or not to purchase a product. Unfortunately, when it comes to medical needs, there’s often no way for patients to tell what procedures they will need, much less what they will cost. To make matters worse, the investment in medical practices by private equity firms has led to an explosion of surprise medical billing.

According to the Center for Economic and Policy Research, Congress has previously tried to put an end to surprise medical bills. In 2019, two different bills were brought in Congress for the purpose of ending surprise billing. Unfortunately, these efforts were faced with significant verbal and financial pushback from lobbyists working for private equity firms and doctors’ practices.

One of these groups backed by a private equity firm launched a $1.2 million ad campaign to push for more lenient treatment for businesses like theirs. Another company called Doctor Patient Unity launched a lobbying campaign that has pumped $54 million into keeping these bills from passing.

What is Surprise Medical Billing?

Surprise medical billing is an unfortunate side effect of private equity investment in medical practices. While a patient may be able to choose a hospital that is in their insurance network, there is often no way for them to tell whether or not the doctors who treat them will be on the network as well. This includes practices like balance billing which is an invoice that is the difference between what is covered by insurance and the provider’s charge.

According to CEPR, emergency room doctors, anesthesiologists, and radiologists are often out-of-network despite whether or not they work at an in-network hospital.

In these cases, patients may expect their treatment to be covered totally or in part by their insurance company only to find that their doctors aren’t covered. The patient often has no choice in who will be treating them after they’ve been admitted. According to CEPR, this surprise medical billing costs patients $40 billion annually.

What is Private Equity?

Private equity is the financial spending power of private investors. The Harvard Business Review reports that, because the U.S. health care has been growing rapidly, private equity firms have been investing heavily in “everything from health technology startups to addiction treatment facilities to physician practices.”

This investment does have some benefits when it comes to medical advancements and research, but overall it results in higher medical bills specifically through surprise medical billing.

How Does Private Equity Work?

Are surprise medical bills supported by private equity fundingThe Blackstone Group, one of the largest private equity firms in the U.S., has invested heavily in medical practices, according to National Public Radio (NPR). These investments go towards companies that then hire and contract medical professionals.

These companies may contract up to thousands of doctors. These doctors work at multiple hospitals, often in the same area. Some of the hospitals may be in-network for insured patients, but the doctors contracted by the private equity firms are not. 

These contracting companies often have names that are unknown to the patients they are charging. In some cases, patients may not know that the company contacting them for re-payments is affiliated with their hospital or doctors at all. This can lead to an accumulation of even more debt. In this way, surprise medical billing can not only raise the price of medical treatment, but also make it harder for patients to know what they’re paying for or how much they actually owe.

What is the Impact of Private Equity Firms Buying Medical Practices?

The largest impact of private equity firm investments in medical practices is the added cost of surprise medical billing. According to reporting by NPR, more than 4,800 have been filed by a single entity, Southeastern Emergency Physicians (Southeastern), against patients who have failed to pay their surprise bills. Southeastern is a physician staffing firm that contracts doctors in four different emergency rooms in the area and is owned by the Blackstone Group.

After news of the lawsuits, many of which were against low-income and struggling individuals, TeamHealth, Southeastern’s parent company, released a statement saying they will no longer be suing patients. Despite this decision, experts agree private equity firms like the one that owns Southeastern have too much control over pricing, and, more specifically, surprise medical billing.

Co-director of the nonprofit Center for Economic and Policy Research, Eileen Appelbaum, told NPR that these private equity investments are harming consumers and patients by building monopolies and weaponizing surprise medical billing.

“Private equity firms buy small competitors to add on to an initial acquisition, building national powerhouses without any antitrust supervision. They use surprise medical bills, or the threat of such bills, to get much higher payments than other doctors receive, driving up health care costs,” Applebaum told NPR.

Join a Free Surprise Medical Bill Class Action Lawsuit Investigation

If you were hit with a surprise medical bill from an out-of-network doctor at an in-network hospital, you may be entitled to compensation.

Learn More

This article is not legal advice. It is presented 
for informational purposes only.

We tell you about cash you can claim EVERY WEEK! Sign up for our free newsletter.


One thought on What Role Does Private Equity Play in Surprise Medical Billing? 

  1. Ebony P Hutchinson says:

    Add me

Leave a Reply

Your email address will not be published. By submitting your comment and contact information, you agree to receive marketing emails from Top Class Actions regarding this and/or similar lawsuits or settlements, and/or to be contacted by an attorney or law firm to discuss the details of your potential case at no charge to you if you qualify. Required fields are marked *

Please note: Top Class Actions is not a settlement administrator or law firm. Top Class Actions is a legal news source that reports on class action lawsuits, class action settlements, drug injury lawsuits and product liability lawsuits. Top Class Actions does not process claims and we cannot advise you on the status of any class action settlement claim. You must contact the settlement administrator or your attorney for any updates regarding your claim status, claim form or questions about when payments are expected to be mailed out.