USAP Antitrust Lawsuit Expands
Plaintiffs in the antitrust class-action lawsuit against U.S. Anesthesia Partners (USAP) have filed an amended complaint. The lawsuit, which alleges monopolization of anesthesia services in Texas, now seeks to expand the class of plaintiffs statewide and include ambulatory surgery centers (ASCs). The complaint targets USAP's practice of acquiring competing anesthesia providers.
- The original lawsuit was initiated by the Federal Trade Commission (FTC), which accused USAP and its private equity backer, Welsh, Carson, Anderson & Stowe, of a "roll-up" scheme to monopolize the Texas anesthesiology market. This involved systematically buying up numerous large anesthesia practices to consolidate the market. - Studies have indicated a significant financial impact from this consolidation, with one University of Chicago paper finding that anesthesia costs in Texas increased by nearly 30% within two years of USAP's acquisitions of major practices in Houston and Dallas. Another study in JAMA reported an average price increase of 26% following private equity acquisitions of anesthesia practices. - While the FTC's case against USAP is proceeding, a federal court dismissed the private equity firm Welsh Carson from the lawsuit in May 2024 on procedural grounds. Subsequently, to resolve a potential separate administrative case, Welsh Carson agreed to a settlement with the FTC that limits its ownership in USAP and requires prior approval for future anesthesia-related investments. - The expansion of the class-action lawsuit to include ambulatory surgery centers (ASCs) is significant as the outpatient surgical market is a major area of growth and consolidation for both private equity firms and health systems. Anesthesia coverage has become a top concern for ASCs, with the percentage of centers expecting to pay stipends for it jumping from 28% in 2024 to 44% in 2025. - The lawsuit alleges that beyond acquisitions, USAP engaged in anti-competitive practices such as aligning rates across different practices and making agreements to limit entry by rival groups, thereby strengthening its negotiating power with commercial payers. - The FTC's actions against USAP are part of a broader scrutiny of private equity's role in healthcare and the use of non-compete agreements. The commission has signaled a particular focus on the healthcare sector, sending warning letters to large employers about potentially unreasonable non-compete clauses for medical professionals.
