Quality scores drop after specialty practices are sold to investors, reports Urology Practice®
Urology practices that have been acquired by private equity firms show significant reductions in scores on Medicare's merit-based incentive payment system (MIPS), reports a paper in the November issue of Urology Practice®, an Official Journal of the American Urological Association (AUA). The journal is published in the Lippincott portfolio by Wolters Kluwer.
Decreases in MIPS quality scores are accompanied by reductions in incentive bonus payments to urologists at acquired practices, according to the new research by Kassem Faraj, MD, of University of Michigan and colleagues. Dr. Faraj comments, "At a time when a growing number of medical practices are being acquired by private equity investors, it is essential to take steps to ensure that the quality of care is maintained."
Study explores quality impact of private equity acquisition of urology practices
In urology and other specialties, there is a trend toward increased acquisition of medical practices by private equity firms. "Private equity aims to strategically increase the value of a practice by reducing costs or expanding revenue, with the goal of selling it for a profit," Dr. Faraj and colleagues explain. While private equity acquisition may have benefits such as increased efficiency, it also has potential drawbacks, such as prioritizing costs and revenue over patient welfare.
How does being acquired by private equity affect the quality of care at urology practices? The new study analyzed scores on Medicare's MIPS system, which assesses physicians' performance in the categories of quality, improvement activities, promoting interoperability, and cost. Under MIPS, physicians who exceed defined performance levels earn payment bonuses, while those who underperform receive payment penalties.
The researchers assessed MIPS scores for 181 urologists whose practices were acquired by private equity firms between 2017 and 2020. Of all urologists participating in MIPS during the study period, about seven percent worked in a practice acquired by private equity.
Scores on MIPS were compared for the year before and after practice acquisition, and to those of a matched group of urologists whose practices were not acquired. Before acquisition, the two groups had similar scores overall and in each MIPS category.
Quality scores and reimbursements decrease after private equity investment
For urologists at acquired practices, MIPS scores decreased significantly in the year after acquisition. Overall MIPS score decreased to 75 (on a 100-point scale), compared to 86 for urologists whose practices were not acquired.
Scores for quality were also lower in the acquired group: 73 versus 89. Scores in other MIPS categories were similar between groups. Reductions in overall MIPS and quality scores at acquired practices were associated with a sharp reduction in the percentage of urologists receiving Medicare bonus payments: 35%, compared to 72% of urologists whose practices were not acquired.
After adjustment for differences between groups, private equity acquisition was associated with a 14-point reduction in overall MIPS score, which was attributable to a 29-point reduction in quality score. There was an estimated 34% reduction in bonus payments to physicians at acquired practices.
The authors note some limitations of their study – including whether the reductions in MIPS scores at urology practices acquired by private equity truly represent reductions in quality of care. Decreases in quality score "may reflect divestment of resources to MIPS quality reporting, which requires significant human capital," the researchers write. But regardless, the decrease in MIPS scores "had reimbursement implications for the urologists at these practices."
"As private equity firms increasingly engage in urology, key stakeholders, including policymakers and urologists, need to ensure that the quality of care is not compromised with the structural changes implemented after acquisition," Dr. Faraj and coauthors conclude. "Until more research is done to determine the effect of these acquisitions on patient care, it is important for practices to be transparent about their relationship with for-profit entities with patients and referring providers."
