On March 5, 2024, several federal agencies issued a Request for Information (RFI) requesting public comments on deals that are conducted by health systems, private payers, private equity funds, and other alternative asset managers that involve health care providers, facilities, or ancillary products or services. The RFI also requests information on transactions that would not be reported to the Department of Justice (DOJ) or Federal Trade Commission (FTC) for antitrust review under the Hart-Scott-Rodino Antitrust Improvements Act.
The DOJ, FTC, and Department of Health and Human Services (HHS) are seeking to better understand how certain health care market transactions may increase consolidation and generate profits for firms, while simultaneously threatening the health of patients, safety of workers, quality of care, and affordability of health care for patients and taxpayers alike.
In response to the RFI, the agencies are seeking input from stakeholders and the public on a variety of transactions – including those involving dialysis clinics, nursing homes, hospice providers, primary care providers, hospitals, home health agencies, home- and community-based services providers, behavioral health providers, and billing and collection services. The agencies specifically request comments from patients and health care workers about how their experiences in the health care system may have changed after a facility or other provider where they work or receive medical care/services was acquired or underwent a merger.
The agencies also seek information on transactions where private equity funds have made direct acquisitions, as well as transactions structured to facilitate private equity investment, circumventing applicable corporate practice of medicine restrictions. According to the RFI, recent research suggests that transactions conducted by private equity funds have had an adverse effect on patients, health care workers, and other stakeholders, including through worse patient outcomes and higher costs for care.
The agencies anticipate that comments will help to inform enforcement priorities and future agency action, including potential regulations aimed at promoting and protecting competition in health care markets and ensuring access to quality, affordable health care items and services.
Comments in response to the RFI are due no later than May 6, 2024, and once submitted, comments will be posted to regulations.gov.
Public Workshop
A virtual public workshop was held on March 5 with the DOJ, FTC, and HHS, that discussed what the federal government is currently trying to do to stop any harmful effects from the impact of private equity in health care.
Agency Statements
“Preserving competition in health care markets is a priority for the Justice Department because of its important impact on the health and well-being of Americans,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “This RFI will enable the agencies to accurately understand the modern market realities of the health care industry and forcefully enforce the law against unlawful deals. Hearing from patients, workers and market participants will be critical in developing future enforcement and policy efforts relating to consolidation in the health care sector.”
“When private equity firms buy out healthcare facilities only to slash staffing and cut quality, patients lose out,” said FTC Chair Lina M. Khan. “Through this inquiry, the FTC will continue scrutinizing private equity roll-ups, strip-and-flip tactics and other financial plays that can enrich executives but leave the American public worse off.”
“Increasing competition in health care markets gives people more choices. Competition helps ensure patients have access to high-quality, lower cost care, and that health care workers receive higher pay and work under better conditions. And it saves taxpayers money,” said HHS Secretary Xavier Becerra. “We need to do more to understand the impact of private equity and corporate dealmaking on our policymaking, regulatory decisions and enforcement actions. The Biden-Harris Administration is committed to improving transparency and competition in health care.”