The Federal Trade Commission is opposing a motion for summary judgment by U.S. Anesthesia Partners to avoid facing trial on claims it monopolized anesthesia services in Texas through a private-equity backed “roll-up” strategy.
According to court documents filed March 30, the FTC says the record evidence was too compelling to be thrown out on summary judgement. Most notably, one executive allegedly celebrated price hikes by writing, “Cha-ching!” in an email. Another email in the record evidence depicted an insurance executive describing the way that USAP would take the highest rate and “peanut butter spread that across the stake of Texas.”
The FTC first opened its case against USAP and its private equity backers Welsh, Carson, Anderson & Stowe in September 2023. The FTC alleged that USAP executed a roll-up scheme, buying up almost every large anesthesia practice in Texas to create a single dominant provider that could demand higher prices. USAP and Welsh Carson then allegedly drove up prices further through billing agreements with remaining independent practices. USAP later allegedly sidelined a competitor by agreeing to a deal to keep it out of USAP’s territory, according to the original complaint.
USAP also allegedly paid rival system Nashville, Tenn.-based Envision Healthcare $9 million per year for five years to stay out of the Dallas-Forth Worth market — a deal that the FTC characterized as illegal.
In seeking summary judgement, USAP claimed that the FTC cannot prove monopoly or market power in any relevant market. It argued that prices did not rise above a competitive benchmark, the billing agreements were “administrative arrangement,” the market should be defined more broadly and, since it has ended some agreements, the FTC’s allegations are moot. It also challenged whether the FTC could legally pursue claims on agreements already terminated.
The FTC countered that USAP’s own market share data shows many acquisitions resulted in shares above 30% and Herfindahl-Hirschman Index increases over 100, meeting the anticompetition law thresholds. It also said that hospital-only anesthesia is a well-accepted market definition, as patients cannot substitute outpatient or ASC-based anesthesia when hospitalized.
On the subject of suing over previously terminated agreements, the FTC said that courts have allowed such claims at trial even when agreements ended years prior. Indeed, the government claimed USAP had not terminated any price billing agreements until its motion, and, moreover, would not commit to terminating them until August 2026. If the court decides to deny the motion for summary judgement, it will proceed to trial.
In February, a class-action lawsuit against USAP related to the allegations of monopolization was expanded to include patients who received care in ASC settings. The new class representative’s claim is based on USAP overcharging for anesthesia services, according to a Feb. 12 news release from litigation firm Gibbs & Bruns.
The lawsuit also challenges USAP’s acquisitions of competing anesthesia providers, as well as price-fixing and market-allocation agreements between the company and certain competitors. The amended complaint also now includes patients who paid for anesthesia services provided by USAP anywhere in Texas.
A federal judge denied USAP’s motion to dismiss the case in December. Regarding the class action case, USAP provided the following statement from Scott Holliday, DO, USAP board chairman, in response to Becker’s request for comment.
“We have stated that we believe the claims in the original complaint lacked merit,” Dr. Holliday said. “Nothing in the amended complaint changes our view. As such, we remain confident we will prevail in this case. In the meantime, our focus continues to be providing great care for our patients.”
Becker’s has reached out to USAP and will update this article if more information becomes available.
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