Private equity firm defends itself on 'surprise' medical billing in letter to House

Private equity firm defends itself on 'surprise' medical billing in letter to House
© iStock, The Hill illustration

A top executive from a private equity firm under investigation by a House panel in a dispute over how best to address “surprise” medical bills defended the company’s work.

The letter, from Wayne Berman, head of global government affairs for the private equity firm Blackstone, is in response to an investigation launched in September by the bipartisan leaders of the House Energy and Commerce Committee.

ADVERTISEMENT

The committee is investigating private equity firms, including Blackstone, that own doctor staffing companies, blaming them for sending massive “surprise” bills to patients when they get care at emergency rooms or other locations from doctors outside their insurance networks. 

In the letter obtained by The Hill, Berman defended the practices of the doctor staffing company that Blackstone owns, called TeamHealth, saying that it very rarely sends surprise bills to patients.

He also wrote that his company supports a legislative solution to protect patients from surprise medical bills, saying that Blackstone just opposes the approach that the Energy and Commerce Committee is proposing to cap such bills, which he warned would lead to damaging cuts to payments to doctors and hospitals. 

Backers of the Energy and Commerce Committee legislation have attacked private equity firms for lobbying against their proposal, saying that they are only interested in protecting their profits so they can keep sending surprise bills to patients. 

The lobbying has helped stall efforts by Congress to move forward on action to cut down on surprise billing, despite both parties wanting to reach a solution.  

TeamHealth, along with another company owned by a private equity firm, Envision Healthcare, have helped bankroll millions of dollars in ads against the leading surprise billing fixes in Congress, which has drawn the ire of the Energy and Commerce Committee. 

The House launched its investigation shortly after discovering that private equity firms were behind the ad campaign against the legislation.

“TeamHealth has a longstanding policy against balance billing,” Berman wrote, referring to the practice of sending massive bills to patients when an insurance company will not pay. He said less than 0.16 percent of all claims from the company result in balance bills. 

Some experts note that even just the threat of sending large surprise bills to patients, though, can provide leverage for doctors to win higher payment rates from insurers. 

The Energy and Commerce Committee asked for a range of data on the company’s revenues from out-of-network billing and other information, which the letter from Berman does not appear to provide. 

ADVERTISEMENT

A committee official dismissed the letter from Blackstone. “It’s not an actual response, it’s a PR document,” the person said. “The Chairman and Ranking Member expect full compliance with the Committee’s oversight requests and they will be following up.”

Berman denounced the approach that the Energy and Commerce Committee is using in its legislation to solve the problem. That bill, as well as one from the Senate Health Committee, would essentially set the payment rate that insurers pay doctors after the patient is protected, based on the median payment rate that insurers have already negotiated in that geographic area. 

Doctors groups argue this approach gives too much power to insurers and would lead to damaging cuts to their payment rates. 

“This effort by insurers to maximize profits at the expense of doctors and patients endangers those who rely on TeamHealth for critical care,” Berman wrote. “In rural America, which already faces serious access challenges, insurers' actions could effectively shutter the only hospitals or medical practices available in those communities.”

Berman instead proposed an alternative solution, backed by many doctors groups, that would allow an outside arbiter to help set the payment rate. 

Backers of the Energy and Commerce and Senate Health Committee bills have criticized this approach as preserving artificially high payment rates for doctors, which could be passed on to consumers in the form of higher premiums.  

Last month, The Hill obtained internal polling from President TrumpDonald John TrumpThis week: House kicks off public phase of impeachment inquiry Impeachment week: Trump probe hits crucial point Judd Gregg: The big, big and bigger problem MORE’s campaign pollster warning that swing-state voters oppose the bipartisan legislation meant to protect patients from surprise medical bills they receive when going out-of-network for emergency care

The survey of voters in Michigan, Wisconsin and Pennsylvania conducted by Tony Fabrizio, the president’s campaign pollster, found that a majority of voters in three battleground states believe that health insurers should be on the hook when patients receive surprise medical bills for out-of-network emergencies.

Trump has advocated fixing the problem of surprise medical bills, but has not weighed in on the specific approach to use.