Psychedelic Sell-Out? Inside U.S. Anesthesia Partners; Insurer Denial Rates Unknown

Welcome to the latest edition of Investigative Roundup, highlighting some of the best investigative reporting on healthcare each week.

An Evangelist for MDMA Therapy ‘Wrestles With His Ideals’

As psychedelics appear primed for the pharmaceutical space, Rick Doblin, the founder and evangelist of a movement to legalize MDMA therapy, is wrestling with his ideals, STAT reported.

The Multidisciplinary Association for Psychedelic Studies (MAPS) is nearing its goal of obtaining FDA approval for MDMA as a treatment for post-traumatic stress disorder, the outlet wrote. “But even as Doblin is in sniffing distance of his lifelong quest, his once counter-cultural organization is grappling with the pressures of having to operate in the capitalist pharmaceutical sphere.”

Founded as a nonprofit in 1986, MAPS had “deep-seated ideals,” STAT wrote, with Doblin developing an “‘anti-patent'” strategy and raising money to fund clinical trials from “like-minded wealthy donors.” However, the “immense costs of not simply developing a drug, but also bringing it to market, is testing those values, changing MAPS in myriad ways.”

The for-profit subsidiary of MAPS (MAPS PBC) has recently accepted investors for the first time, and has abandoned its anti-patent stance, the outlet wrote. And at a recent conference, during which protesters “decried the theft of Indigenous peoples’ intellectual property and lack of access to medical treatments,” it further became clear that “MAPS is wrestling with its identity.”

Earlier this year, Doblin quietly stepped down as executive director after 37 years in the role, and now serves as president, according to STAT. And Doblin conceded that he is disappointed by compromises made to his original vision, especially when it comes to bringing in outside investors.

“The dream plan was for MAPS PBC to remain 100% owned by the nonprofit,” Doblin told STAT. “Anything less than that is partial accomplishment of the dream, which is sad.”

Inside U.S. Anesthesia Partners

Internal documents shared with The Washington Post provide a “rare glimpse” into how one private equity venture into physician services led to price hikes and the company’s dealings with federal regulators reviewing whether it was amassing monopoly power, the outlet reported.

The private equity firm Welsh, Carson, Anderson & Stowe created U.S. Anesthesia Partners, and in 2015, the company bought the largest anesthesiology group in the Denver region, the Post reported. Then it bought the next largest, and a few more. At one point, U.S. Anesthesia Partners employed 330 anesthesiologists in Colorado, “making it the state’s largest practice by far.” And the company had contracts at 10 of the region’s 15 largest hospitals.

“The Federal Trade Commission, which is supposed to prevent unfair business practices, questioned the company’s growth but did not stop it,” the Post wrote. “The company raised prices for its services — one by nearly 30% in its first year in Colorado — and continued raising them for several years,” the outlet added, citing its own interviews and confidential company documents it obtained.

Those price hikes “boosted patient bills and pushed up insurance rates,” former company physicians and managers told the Post. “Eventually, some of the company’s own doctors became disillusioned, physicians said, with about 1 in 3 leaving the company over a 3-year period.”

A spokesperson for U.S. Anesthesia Partners denied that it yielded monopoly power, and said that the company “faces plenty of competition and pressure from insurance companies,” the Post reported.

“As the United States struggles to control medical costs … private equity firms like Welsh Carson have become critical players in healthcare economics … with private equity funds acquiring hundreds of physician practices across America and, according to multiple academic studies, raising prices while returning billions to investors,” the article stated.

Insurer Denial Rates Remain a Mystery to the Public

How often health insurers refuse to pay for tests or treatments remains a “closely held secret,” ProPublica reported.

“There’s nowhere that a consumer or an employer can go to look up all insurers’ denial rates — let alone whether a particular company is likely to decline to pay for procedures or drugs that its plans appear to cover,” ProPublica wrote. In addition, the “lack of transparency is especially galling because state and federal regulators have the power to fix it, but haven’t.”

The Affordable Care Act granted federal regulators the authority to require insurers to provide information on their denials, but more than 10 years later, the federal government has collected just a “fraction of what it’s entitled to,” ProPublica noted.

“Within the limited universe of Healthcare.gov,” ProPublica wrote, analyses by KFF “show that insurers, on average, deny almost 1 in 5 claims and that each year some reject more than 1 in 3.”

However, red flags suggest insurers may not be reporting their data in a consistent manner, ProPublica added, with denial rates ranging from 2% to about 50%.

Although ProPublica requested data from every state’s insurance department, none provided it. When it comes to two states that collect their own information on denials and make it public, the data cover just a small subset of health plans serving a limited number of people.

“This is life and death for people: If your insurance won’t cover the care you need, you could die,” Karen Pollitz, a senior fellow at KFF who has written repeatedly about the issue, told ProPublica. “It’s all knowable. It’s known to the insurers, but it is not known to us.”