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The Villain in the Deadliest Nursing Home Scandal Is Wall Street, Not Andrew Cuomo

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New York Governor Andrew Cuomo at a news conference on September 08, 2020 in New York City. Nursing homes owned by private equity are associated with lower staffing, fewer ventilators and less PPE: all factors in the COVID-19 death toll for elderly residents.
Spencer Platt/ Getty Images

Private equity could face congressional scrutiny

The relationship between private equity and the health care industry took center stage in Congress during last year’s debate over surprise billing.

Private equity firms Blackstone and KKR have acquired hospital staffing firms in recent years, which have been associated with high levels of “surprise billing”—a euphemism for the practice of sending people huge medical bills after they visit hospitals that are part of their insurance networks and are treated by doctors or staff who are out of network.

In 2019, a dark money group funded by hospital staffing companies owned by Blackstone and KKR spent $75 million on an advocacy campaign opposing legislation to end surprise billing. Later that year, after a bipartisan deal had been reached on the bill, the legislation was killed by Rep. Richie Neal, a lawmaker who received sizable campaign donations from Blackstone.

Lawmakers passed a new provision to end surprise billing in December’s budget bill, but the final version was watered down by lobbying from private equity-owned staffing firms, and is expected to drive up health care costs.

Last week, congressional Democrats introduced legislation designed to close tax loopholes and make private equity investing less lucrative. That followed Democratic lawmakers in 2019 requesting information from private equity giants about their nursing home business practices.

In 2009, Democrats who had just won control of Congress held hearings about the role of private equity in the nursing home industry. Democrats who have now regained power in Congress have the power to launch another investigation into the matter.

It remains to be seen whether Democratic lawmakers will launch another review of the industry: donors from private equity and investment firms have more than doubled their campaign contributions to Democrats.

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