The bipartisan, bi-coastal duo that has taken on surprise medical bills has turned its attention to the role played by private equity firms in rising provider costs.

U.S. representatives Greg Walden (R-OR) and Frank Pallone, Jr. (D-NJ) announced this week they are officially investigating a group of private equity firms that own physician staffing services. The firms–KKR & Co. Inc., Blackstone Group, and Welsh, Carson, Anderson, & Stowe–were sent requests to hand over "information and documents pertaining to the firms' ownership of private physician staffing and emergency transportation companies, which recent research shows are a leading source of surprise medical billing," Walden said in a release.

The six-page letter to KKR, for instance, asked for detailed information about KKR's physician staffing and emergency transportation holdings. Among the requests were annual in-network and out-of-network revenue from each staffing and emergency transport company currently or previously owned by KKR.

The two congressmen have been embroiled with health care providers over ways to address the controversial "surprise" bills. But even as major providers have launched a concentrated attack on their proposal (the No Surprise legislation) to rein in the bills, Walden and Pallone have opened a second front on the private equity firms. "We are particularly interested in your firm's relationship with any physician staffing companies and emergency transportation companies," Walden said in the press release.

Walden honed in on recent allegations that staffing firms and ambulance companies owned by the private equity sector have been running up excessive, and perhaps bogus, bills that have been landing in plan sponsors' laps. One major component of surprise bills comprises services provided outside of a plan's network that consumers thought were in-network services. The staffing services component represents in-network services that are billed at excessive rates compared to other in-network providers, Walden said.

Citing research from the American Enterprise Institute and the Brooking Institution, the release said these hidden higher costs were yet another example of surprise billing practices.

"Evidence indicates that these physician staffing firms charge significantly higher in-network rates than their counterparts, thereby driving reimbursement upwards as they enter into staffing arrangements with hospitals," the release said.

The letters were sent Sept. 16 to the private equity firms. The congressmen requested responses no later than Sept.30.

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Private equity firms in the crosshairs of latest surprise billing inquiry

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