October 03, 2023

Ken Vorrasi Discusses Impact of FTC Lawsuit on Private Equity’s Roll-up Acquisitions of Physician Practices in Modern Healthcare

Modern Healthcare recently reported how the Federal Trade Commission (FTC) has targeted roll-up acquisitions by private equity firms, a widely used healthcare consolidation strategy, via a recent lawsuit in Texas. Private equity firms have been using the roll-up strategy in healthcare for more than a decade.

The publication reached out to antitrust partner Ken Vorrasi for his insight on the antitrust attention the FTC and DOJ are paying to private equity, including their activity in healthcare with physician practices.

Vorrasi noted that physician groups are often attracted to private equity because those firms provide administrative and back-office support, such as billing and compliance. In addition to bolstering contract negotiations with insurers and financing equipment upgrades, private equity firms may be able to offer physicians better compensation packages than nonprofit health systems, Vorrasi explained.

“Private equity solves those issues for physicians,” he said. “There is a lot of momentum behind physician group roll-ups. Private equity sees physician practices as valuable inputs in the industry, and their interest in those assets will continue.”

The antitrust risk of roll-up acquisitions isn’t any higher as a result of the lawsuit, Vorrasi added.

Overall, Vorrasi pointed out that it’s clear the FTC is and has been watching private equity closely and “putting their money where their mouth is.”

The full article is available to Modern Healthcare subscribers.

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