The Federal Trade Commission (FTC) has reached a settlement with the private equity firm Welsh, Carson, Anderson, and Stowe, along with its affiliates, collectively known as "Welsh Carson." This settlement addresses a potential second administrative antitrust case against the firm.
The FTC's complaint alleges that Welsh Carson used its portfolio company, U.S. Anesthesia Partners (USAP), to engage in anticompetitive acquisitions aimed at suppressing competition and increasing prices for anesthesiology services in Texas.
Under the proposed consent order intended to resolve these concerns, Welsh Carson is required to limit its involvement with USAP. The firm must also notify the FTC about specific future acquisitions and investments related to anesthesia and other hospital-based physician practices.
This settlement follows an earlier federal court complaint filed by the FTC in September 2023. In this complaint, the Commission accused USAP and Welsh Carson of creating a roll-up scheme by acquiring nearly every large anesthesia practice in Texas. This allegedly led to the formation of a dominant provider capable of demanding higher prices.
In May 2024, a district court dismissed Welsh Carson from the FTC’s federal challenge on procedural grounds. The court found that the FTC lacked authority under Section 13(b) of the FTC Act because it did not allege current law violations by Welsh Carson. However, the antitrust case against USAP continues in federal court.
The FTC's recent action highlights that while dismissal on Section 13(b) grounds can delay proceedings, it does not prevent challenges to anticompetitive conduct. If necessary, the Commission will pursue administrative court actions to protect consumers. The current settlement avoids such an administrative proceeding.
The proposed consent order includes terms designed to prevent future anticompetitive conduct by Welsh Carson and deter similar behavior by others. Key provisions require Welsh Carson to:
- Freeze its investment in USAP at current levels and reduce board representation.
- Obtain prior approval for any nationwide anesthesia investments or certain acquisitions.
- Provide advance notice for transactions involving other hospital-based physician practices.
The consent agreement was accepted for public comment with a unanimous 5-0 vote by the Commission. Chair Lina M. Khan issued a statement joined by Commissioners Rebecca Kelly Slaughter and Alvaro M. Bedoya; Commissioner Andrew N. Ferguson issued another statement joined by Commissioner Melissa Holyoak.
Further details are available in an analysis meant to aid public comment. The consent agreement package will be published soon in the Federal Register, where instructions for filing comments will be provided. Comments are due within 30 days after publication and will be posted on Regulations.gov once processed.
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