Diane Hazel Discusses Government Scrutiny of Private Equity Acquisitions in Health Care
Foley & Lardner LLP partner Diane Hazel is quoted in the RevCycleIntelligence article, “Private Equity Acquisitions Come with Growing Antitrust Concerns,” discussing the antitrust concerns posed by the rising number of private equity acquisitions of physician practices.
Hazel said in some instances, private equity acquisitions of physician practices have pro-competitive benefits and often may not meet the financial threshold requiring a premerger filing with the U.S. Department of Justice and Federal Trade Commission, although she noted that both have publicly expressed unease about “potential cost-cutting,” a “focus on short-term revenues,” and “quality of care concerns for patients.”
“The agencies are coming out and publicly saying that the cumulative effect of these smaller transactions could be enough to violate Section Seven of the Clayton Act,” Hazel explained. “That’s the merger statute where acquisitions can be challenged if they’re thought to substantially lessen competition or create a monopoly.”
“To the extent a practice or a hospital is thinking about selling, I would recommend having their own counsel to work with and think through these issues,” Hazel added. “If they’re talking to a private equity firm that’s making a number of acquisitions in a space that they may be competing in, whether it’s a physician specialty or hospital, they may want to think about how there could be a challenge or an investigation someday by the federal agencies or states and how they would handle that.”
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