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US Department of Justice Investigates SS Disability Private Equity

Private Equity Investment In Disability Services Attracts Inspection

People with disabilities have become a target for Federal officials. They are concerned about increasing private equity investment in home and community-based services and other offerings, and they want the public to weigh in.

 

The U.S. Department of Justice’s Antitrust Division, the Federal Trade Commission and the Department of Health and Human Services recently issued a joint request for information about the impact of health care mergers, acquisitions and other transactions by private equity funds or other alternative asset managers, health systems or private payers, as reported by Disability Scoop.

 

Private equity, defined as ownership or interest in entities that are not publicly listed or traded, is a source of investment capital from firms buying stakes in private companies or taking control of public companies with plans to take them private and delist them from stock exchanges. Private equity is frequently used to make companies more efficient, however the short-term returns and profits from health care companies may not serve patients accurately.

 

Research and campaign director at the Private Equity Stakeholder Project, Eileen O’Grady, said “private equity gravitates toward fields that are fragmented, where firms can buy up competitors. Home health and behavioral health are also growing markets, with an aging population and regulatory changes that provide more insurance coverage for mental health and substance use treatment.”

 

To a disabled person in the wheelchair market, for example, reporting by Mother Jones and the financial watchdog Private Equity Stakeholder Project found that private equity-owned Numotion and National Seating and Mobility bought out their competitors then won Medicare contracts by offering lower prices according to Dignity Alliance. Whether by using lower-quality parts or hiring fewer repair technicians, less competition occurred.

 

DOJ Investigates Disability

 

One health care section targeted by private equity is clearly medical equipment.

The Massachusetts Health Policy Commission released data saying the majority of private equity relations involved home health and hospice, behavioral health, and dental offices.

 

The agencies’ request reads, “given recent trends, we are concerned that some transactions may generate profits for those firms at the expense of patients’ health, workers’ safety, quality of care and affordable health care for patients and taxpayers.” They are digging to understand transactions and affordability involving how health care providers are impacting patients, communities, workers and more. This includes home and community-based services providers for people with disabilities and behavioral health providers.

 

Federal officials announced their predominant interest in transactions that are too low in value to require review by the Federal trade Commission (FTC) or the Justice Department.

The notice denotes interest “in hearing directly from patients and health care workers about how their experiences in the health care system changed after a facility or other provider where they work or receive treatment or services was acquired or underwent a merger.”

 

The agencies said that information provided may help them identify enforcement priorities or inform new regulations. The FTC released a request for information (RFI) seeking public comment on private equity and other corporations’ increasing control over health care, including home and community-based services. Patients and workers are encouraged to share information on how acquisitions and mergers in the health care industry have affected them directly.

 

The RFI is additionally seeking comments as to what actions the agencies would consider taking to identify and speak to transactions that have major adverse impacts on patients, public and private payers, providers, health care workers, support staff, and employers who provide health insurance for their employees. Furthermore, the ultimate goal agencies want to determine is in what way they should promote greater transparency to the public on mergers, acquisitions, and other transactions.

 

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