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Private Equity Firms’ Advance Medicare Pay Faces Limit in House

July 13, 2020, 11:11 PM

Private equity-backed health-care companies would face new restrictions on getting funds through Medicare’s advance payment program under a $196.5 billion spending bill that won the House Appropriations Committee approval Monday.

The appropriations legislation to fund the departments of Health and Human Services, Labor, and Education would direct the government to restrict Medicare advanced payments to private equity-owned organizations that have laid off or furloughed workers. It would also require the federal government to report every 90 days to Congress on organizations that received early payments from Medicare this year.

Any group seeking new advanced payments from Medicare would need to disclose if a private equity firm owns it and the amount of money going to providers controlled by such firms.

Andrew Harrer/Bloomberg via Getty Images

Overhauls of Medicare’s advance payment program have been drawing attention from members of both parties after hospitals and doctors took almost $100 billion in pre-payments from the federal government that they’ll need to repay with interest. The appropriations bill, however, is the first attempt to restrict where these funds go.

If it becomes law, the appropriations language could shed a light on firms such as KKR & Co, Blackstone Group Inc., and Welsh Carson, Anderson & Stowe, which have added to their health-care portfolios in recent years by acquiring staffing groups and health services companies.

The House Appropriations Committee voted 30-22 Monday to give the Department of Health and Human Services $96.4 billion in discretionary funding for the year starting Oct. 1, a $1.5 billion increase from the current fiscal year. It would also send $24.4 billion to state and local health departments.

Congressional Inquiry

Private equity-backed organizations last year became the focus of a congressional investigation over how their increased control of health care companies led to rising health-care costs and instances of surprise medical billing. How much loan money went to such firms remains to be determined.

The House earlier this year passed legislation (H.R. 6800) would slash the interest rate for health-care providers that borrowed from Medicare, an effort that’s attracted some bipartisan support this year.

“We are working together to defeat this virus and not surrender to it,” Rep. Rosa DeLauro (D-Conn.), chairwoman of the House Labor, Health and Human Services, Education, and Related Agencies Appropriations Subcommittee, said Monday.

Bolstering Prevention Efforts

The spending legislation includes $9 billion in emergency funds that would go toward helping states improve their public health responses. It would also bolster prevention efforts, such as expanding the current influenza vaccine campaign ahead of the fall in hopes of reducing flu-related hospitalizations around the same time that Covid-19 cases might increase. Health experts have said local departments are putting all their resources toward combating the spread of the coronavirus and may be unprepared for the coming flu season.

The bill would also send $25 million to the National Institutes for Health and $12.5 million to the Centers for Disease Control and Prevention to study gun violence, which is less than the $50 million previously approved for such work. Congress last year appropriated funds to study gun violence for the first time in almost 20 years.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bgov.com

To contact the editors responsible for this story: Paul Hendrie at phendrie@bgov.com; Robin Meszoly at rmeszoly@bgov.com

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