Charges Per Claim Up With Private Equity Acquisition of Practices

TUESDAY, Sept. 6, 2022 (HealthDay News) -- Private equity (PE) acquisition of physician practices in dermatology, gastroenterology, and ophthalmology is associated with increases in the amount charged per claim and the allowed amount per claim, according to a study published online Sept. 2 in JAMA Health Forum.

Yashaswini Singh, from the Johns Hopkins University Bloomberg School of Public Health in Baltimore, and colleagues examined changes in prices and utilization associated with PE acquisitions of physician practices across dermatology, gastroenterology, and ophthalmology. Each PE-acquired practice was matched with as many as five control practices within each specialty. The PE-acquired practices were compared to matched practices through year 2 after acquisition.

The researchers found that the 578 PE-acquired physician practices exhibited an average increase of $71 charged per claim and $23 in the allowed amount per claim compared with the 2,874 control practices. Compared with control practices, the PE-acquired practices increased their numbers of unique patients seen by 25.8 percent, which was driven by a 37.9 percent increase in new patient visits. In aggregate, there was a 16.3 percent increase in their volume of encounters compared with the control group; a 9.4 percent increase was seen in the share of office visits for established patients that were billed as longer than 30 minutes. No significant changes were seen in patient risk scores between PE-acquired practices and controls.

"Private equity acquisitions of physician practices were associated with increases in health care spending and utilization, along with some changes to practice patterns," the authors write. "This study contributes evidence for potential overutilization and higher spending on care that will be important for policy makers to monitor."

Several authors disclosed financial ties to the medical technology industry.

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