Congress investigates private equity firm connection to surprise medical bills
When you go to the emergency room in San Antonio there's a good chance the doctor who treats you doesn't work for the hospital. News 4 Trouble Shooter Jaie Avila has uncovered some local doctors actually work for one of the biggest investment firms in the country.
Congress is investigating whether this troublesome connection is to blame for the rise in surprise medical billing. Members of Congress are taking a look at private equity firms that have been buying up physician staffing companies across the nation, including here in San Antonio.
April Ray received what seemed like a typical surprise bill. She went to Methodist Specialty and Transplant Hospital for gallbladder surgery because it was in her insurance network. Her plan covered the hospital and the surgeon, but then she received an $1,800 out-of-network bill from another doctor on the team.
“I expected to get the one bill because they were in-network with my insurance and then all of a sudden I got this huge bill and panicked," April says.
Like many hospitals, Methodist outsources some of its physician staffing to separate companies. The bill April received was from a physician group called Kensington Row Inpatient Services.
My research found Kensington Row is one of dozens of physician staffing companies owned by parent company Envision Healthcare. And Envision is owned by KKR, Kohlberg Kravis Roberts, one of the biggest private equity firms in the country.
Private equity firms take money from big investors and buy a company, then make changes at the company to maximize profits. So, it can turn around and sell the company for a higher price later.
Researchers at Yale did a study that says when another of Envision Healthcare's staffing companies, EmCare, landed a contract with a hospital, they "immediately exit (insurance) networks and bill as out-of-network providers" then "raise their prices by 96 percent" over what the prior physician group in that hospital charged.
“Those firms have realized that surprise medical billing can generate a lot of profit, can make them a lot of money," says Stacey Pogue with the Center for Public Policy Priorities in Austin.
Envision and KKR say the Yale study is wrong and emailed News 4 a statement:
"Caring for Americans through more than 35 million patient visits a year is at the core of what we do, including our efforts to end surprise medical bills. In February 2017, Envision Healthcare committed to being in-network with as many insurers as possible, and since investing in envision, KKR has fully supported this."
Members of congress still aren't convinced. Last fall they sent letters to KKR and two other private equity firms asking for information on their billing practices.
When News 4 contacted Envision they said April Ray won't have to pay her surprise bill. They said it had been incorrectly processed by the insurance company.
“I'm so thankful you all were able to look into this bill for me, I'm just ecstatic," says April.
Private equity firms, hospital groups and insurance companies have all been spending big money on advertising and lobbying hoping to influence surprise billing legislation in congress.
Here's the complete statement Envision Healthcare / KKR sent to News 4 San Antonio:
"Envision Healthcare Statement
Caring for Americans through more than 35 million patient visits a year is at the core of what we do, including our efforts to end surprise medical bills, our commitment to being in-network, and our support of federal and state solutions to protect patients and our fragile healthcare safety net. In February 2017, Envision Healthcare committed to being in-network with as many insurers as possible, and since investing in Envision, KKR has fully supported this.
The patient's claim was incorrectly processed multiple times by the insurance company before finally being approved, and it is unfortunate that the patient was inconvenienced as a result. We have reached out to the patient to explain that the claim was resolved."