Colorado AG breaks up anesthesiology monopoly that dominated Denver and Durango health care markets

An anesthesiologist stands over a patient during a procedure at National Jewish Health in Denver on Thursday, Nov. 19, 2020. The Colorado attorney general reached an antitrust settlement with U.S. Anesthesiology Partners on Feb. 26, 2024. The settlement alleges USAP, which has exclusive contracts with numerous hospitals including National Jewish, operated as a monopoly in the Denver and Durango markets. The settlement ends exclusive contracts at five other Colorado hospitals.

Those five hospitals were chosen because they are the most profitable for USAP, said Lawrence Pacheco, a spokesman for Attorney General Phil Weiser. The attorney general believes competitiveness will be restored by separating those five hospitals from USAP’s business. “We felt that it was in the best interest of our patients, health system partners and the communities we support to resolve the inquiry, regardless of its merits,” Acosta said. “Our resources are better spent taking care of patients than paying legal fees to defend ourselves against these claims. USAP remains committed to focusing on what matters most — providing the highest quality care to Coloradans.

“They saw in Texas this was a dominant business model and they sought to bring this model to Colorado,” Weiser said. The company negotiated reimbursement rates so that their charges were 30% to 40% higher than competing groups in the Denver area, Weiser said. That created a financial windfall for USAP and its private equity owners.

The anesthesiology group would put pressure on insurance companies by threatening to terminate existing contracts as they were about to expire, according to the AG’s settlement. Commercial health and employer-funded plans then would have to bear the cost of much higher out-of-network billing, costing them millions in surgical anesthesia services.Even as USAP squeezed insurance companies for higher rates, the firm experienced staffing problems.

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