An anesthesia-based healthcare company will no longer own the majority of the market in the metro Denver area following an investigation by Colorado’s Attorney General. 

Attorney General Phil Weiser announced an agreement on Tuesday with U.S. Anesthesia Partners (USAP) — a healthcare company partly owned by private equity firm Welsh Carson Anderson & Stowe — following an investigation on its practices in the Denver area.  

USAP began purchasing anesthesia practices in the Denver area in 2015, eventually owning all of its competitors by 2021, according to a news release from the Attorney General’s Office.

Before USAP entered the Colorado market, three hospital systems contracted with several different anesthesia practices to provide services. This variety and competition allowed for lower pricing and higher services. 

After USAP bought the competing practices, they were able to establish control of surgical anesthesia at the two largest hospital systems in the Denver area, accounting for more than 70% of health plan reimbursements.

By 2021, the company entered into exclusive or semi-exclusive contracts to provide anesthesia services at 16 of the 21 Denver-area hospitals that allow health care professionals to compete for services, according to the release. This dominance allegedly led to inflated prices and costs for patients and their employer-sponsored health insurance plans.

“When private equity gets involved in health care with a focus on raising prices to make a quick buck, bad things happen for consumers,” Weiser said in the release. “USAP’s overall business model focused less on serving patients, and more on increasing profits through acquisitions and anticompetitive tactics.”

When the company faced a shortage of anesthesia professionals following the COVID-19 pandemic, they often delayed or cancelled surgeries at the hospitals they were contracted with, according to the release. But, due to a stranglehold on the market, hospitals were unable to find other anesthesia services elsewhere. 

The settlement will see USAP end its exclusive contracts at five Colorado hospitals—St. Anthony Hospital, St. Anthony North Hospital, OrthoColorado Hospital, Longmont United Hospital and Mercy Hospital in Durango.

The company will also release and modify non-compete agreements with clinicians.

Along with the changes in practices, the company will pay the state $200,000 for “any restitution where possible, consumer education or consumer protection enforcement, or efforts to advance the public welfare,” the office said.