Association Between Private Equity Acquisition of Urology Practices and Physician Medicare Payments

Objective: To assess whether private equity (PE) acquisitions of urology practices were associated with changes in Medicare payments and patient volume.

Methods: We identified PE acquisitions of urology practices through financial databases, industry news outlets, practice websites, and Google search. Using the Centers for Medicare and Medicaid Service's Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use File (2012-2019), we conducted descriptive statistics and trends analysis to examine whether PE acquisition was associated with changes in Medicare payments and patient volume in comparison to non-PE affiliated urologists within the same states.

Results: We identified PE acquisitions of 10 independent urology practices across 6 states during the study period. In the preacquisition period, urologists later joining private-equity groups received greater mean inflation-adjusted Medicare payments ($246,977 vs $160,038; P <.001) and had greater patient volume (839.7 vs 674.2 patients; P = .001) than urologists who did not. In the postacquisition period, PE affiliated urologists had an 11.0% (95% CI: -0.2% to 22.3%) increase in inflation-adjusted Medicare payments (P = .054) and a 12.5% (95% CI: 6.5%-18.6%) increase in patient volume (P <.001). Non-PE affiliated urologists exhibited a 6% decline in Medicare payments (P <.001) and a 2.7% increase in patient volume (P <.001).

Conclusion: PE affiliated urologists exhibited increases in Medicare payments even prior to acquisition, in contrast to declines for geographically similar, non-PE urologists. These findings may highlight characteristics of practices targeted by PE firms and local practice trends that may further diverge following acquisition.