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Private equity’s role in health care gains interest in Congress

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A bill is working its way through Congress that could have an impact on health care providers, particularly those owned by private equity firms.

On Wednesday, the House Ways and Means Committee has scheduled a markup of new legislation that would require public disclosure of a range of information surrounding certain health care companies.

This legislation is particularly of interest to private equity groups and other investors that have long seen a large volume both of capital and deal count in the health care industry.

Private equity has grown in health care and life sciences

The information would require the following be disclosed publicly if the bill passes:

  • Amounts received as reimbursement for any item or service under Medicare.
  • Amounts received as reimbursement for any item or service under a state plan (or waiver of such plan) under Medicaid.
  • Negotiated rates for services with respect to any provider of health insurance.
  • Other amounts received for the provision of medical care, including a separate statement from any provider of health insurance.
  • The first date the reporting person (or a related person) controls the specified medical care provider.
  • The value of all consideration received in exchange for the interest disposed of.
  • Other amounts paid to the reporting person or any person related to the reporting person.

The legislation comes amid rising concern over surprise billing, which  occurs when a person visits a health care provider and receives an unexpectedly large bill.

This can happen when a provider that delivers health care services is not part of the patient’s health insurance network and the insurer does not cover a substantial portion the service, nor does the patient receive in-network negotiated rates.

Frank Pallone, a Democrat from New Jersey and chairman of the House Ways and Means Committee, and Greg Walden, a Republican from Oregon and the committee’s ranking member, sent a letter to three private equity firms in December expressing concern about the issue and requesting information about why it occurs.

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About Rick Kes

@HealthCare_CPA

Rick has over a decade of experience providing audit and consultative services predominately to organizations in the health care industry. He has served a wide variety services for organizations ranging from large organizations with more than $12 billion in annual revenue to small, standalone entities with less than $1 million in annual revenue. Rick has served clients across the health care continuum including integrated health systems, physician groups, safety-net hospitals, health insurance clients, and other various health care related entities. Rick has experience in governmental, not for profit, and statutory accounting standards.

Rick has played a role on several due diligence engagements as a dedicated health care professional resource. In 2018, he was selected as a senior analyst in RSM’s cutting edge Industry Eminence Program, which positions its senior analysts to understand, forecast and communicate economic, business and technology trends shaping the industries RSM serves. These senior analysts advise clients on conditions impacting middle market leaders.

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