FTC's Antitrust Case Against Private Equity Group Could Impact Payers

Antitrust attorney Bill Katz was interviewed by Health Payer Specialist about what a lawsuit filed by the Federal Trade Commission (FTC) over private equity rollups in the healthcare industry could mean for the payer sector. The FTC's suit marks the first in which federal regulators are targeting the investors behind an alleged monopoly. In roll-up acquisitions, a company buys up a group of practices — in this case, a group of anesthesia services — and the FTC's scrutiny of these deals raises concerns for mergers and acquisitions (M&A) investors. The focus on payer-driven consolidation, in which payers become insurers, providers, pharmacy benefit managers (PBMs) and even part of the supply chain, also points to the Biden Administration's larger aim to crack down on M&A in the industry. Mr. Katz explained that the FTC and U.S. Department of Justice have long since "frown[ed] on" rollups, under the belief that they do not improve the quality of care or lower prices. He added that this new case represents a high-profile initiative for the administration.

"This is an example of the FTC not just talking the talk, but also walking the walk when it comes to private equity rollups," he said, explaining that the FTC's suit is "challenging horizontal agreements that allegedly kept a new entrant out of the market and allowed other anesthesia groups to raise their prices."

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