Nearly three years and a major changing of the guard later, the Federal Trade Commission appears to be at the end of a competition lawsuit it previously heralded as evidence of its strong hand against private equity and provider consolidation.
The regulator on Thursday announced it has reached an agreement in principle with U.S.. Anesthesia Partners (USAP), a Texas-based, private equity-backed anesthesia provider it brought charges against in 2023. FTC had alleged the group, created in 2012, violated antitrust laws and steamrolled what had been a market of several smaller physician practices. It did so, per the complaint, by acquiring over a dozen Texas anesthesiology practices with more than 1,000 doctors and 750 nurses and using the captured market to raise rates that cost Texans "tens of millions" of additional dollars.
A key factor in the enforcement was private equity firm Welsh, Carson, Anderson & Stowe. The FTC—under the leadership of antitrust hardliner Lina Khan—painted the firm as the mastermind behind USAP's long-term "roll-up scheme," and often cited the lawsuit as a check on investors' potentially damaging influence on healthcare.
Welsh Carson immediately contested the characterization, and the following year convinced a judge to remove it from the antitrust case due to its minority ownership of USAP. The FTC refused to drop the threat of a separate administrative antitrust case, however, leading to a 2025 deal between the two in which Welsh Carson agreed to limit its interests in anesthesia and hospital-based physician practices (Editor's note: see that news coverage below the break).
That deal, cut in the final days of the Biden administration, was backed by commissioners from both parties but with a stark divide in messaging.
Khan called the agreement “a valuable blueprint” for future agency action against private equity firms with too much influence in healthcare markets via their portfolio companies. Andrew Ferguson, who now heads an FTC purged of Democrat commissioners, denounced the "red herring" villainization of private equity at large while agreeing that action was appropriate in this case to prevent future rapid acquisitions and preserve competition.
“The public should disregard my Democratic colleagues’ rather clumsy attempt to make a run-of-the-mill enforcement matter seem like an avant-garde application of novel provisions of the 2023 Guidelines,” he said last year. The settlement with Welsh Carson was finalized by a judge a few months later.
The loose end of those proceedings was the ongoing antitrust lawsuit against USAP itself, which now appears to be wrapping up. The tentative deal between the FTC and the anesthesia provider was authorized 2-0 by Ferguson and Mark Meador, the agency's other remaining commissioner, though its terms are being kept under wraps "to facilitate the negotiations USAP must undertake to executive the settlement.
"But the terms of the settlement, if fully executed, will restore a competitive market structure and will be consistent with longstanding FTC settlement best practices," the commission said Thursday. "If USAP fails fully to execute the settlement, the FTC will return to district court to litigate these unlawful acquisitions."
USAP, in a Thursday release, said it still believes it had a strong defense against the allegations, and that any final settlement will be made without admission of fault.
"There are uncertainties in any legal proceeding and this exceptionally prolonged litigation has required enormous time, energy, and financial commitments," Physician and Board Chairman Scott Holliday, D.O., said. "In considering the best interests of our patients, clinicians, and hospital partnerships, we felt it was important to resolve this now so that USAP can remain laser focused on providing high-quality anesthesia services to our communities."
This week's announcement of the agreement described USAP's alleged roll-up scheme but was bare of any reference to Welsh Carson or private equity in general (outside of a linkback to the original litigation announcement).
Though Ferguson's holds a less dogmatic position on private equity in healthcare than his predecessor, the continued pursuit of existing cases like USAP's and new enforcement against organizations with dominant market positions backstop his pledges to take a hard stance on healthcare entities that would distort competition and prices.
May 21, 2025
FTC orders PE firm Welsh Carson to limit anesthesiology investments, role in USAP
The Federal Trade Commission (FTC) has signed off on a deal with private equity firm Welsh, Carson, Anderson & Stowe that resolves the regulator's antitrust investigations and potential lawsuit.
Under the final consent order shared Tuesday, Welsh Carson will limit involvement in a portfolio anesthesia practice, U.S. Anesthesia Partners (USAP), and must inform the FTC of upcoming acquisitions or investments related to anesthesia or hospital-based physician practices.
The FTC, in 2023, had accused the firm and USAP of engaging in a roll-up scheme—the purchase of numerous independent practices to obtain market dominance—among anesthesia practices in Texas since 2012. Though a judge dismissed Welsh Carson from that litigation in 2024, in light of the firm only holding a minority interest in USAP, the FTC maintained its pressure with the threat of a separate administrative antitrust case.
While federal court litigation against USAP is still ongoing, the FTC and Welsh Carson struck a deal in January (see that story below) to avoid further administrative action. Tuesday's final consent order is an extension of the parties' agreement and will remain in effect for 10 years. Alongside the limitations, it also requires Welsh Carson to submit regular compliance reports to the regulator.
Commissioners voted 3-0 in approval of the final order.
Jan. 20, 2025
FTC secures 11th hour settlement from PE firm Welsh Carson over alleged roll-up scheme
Private equity firm Welsh, Carson, Anderson & Stowe has agreed to a settlement with the Federal Trade Commission (FTC) that will pare back its role in a portfolio anesthesia practice the regulator accused of anticompetitive behavior.
The deal comes with no monetary penalties but requires the private equity firm to freeze its investments in Texas-based U.S. Anesthesia Partners at current levels and reduce its board representation to a single, non-chair seat, according to the proposed consent order.
Further, Welsh Carson will need to secure prior approval for any future investments in anesthesia, as will the anesthesia groups it majority owns, plus give the regulator a 30-day heads-up for certain deals involving hospital-based physician practices nationwide.
The FTC had launched its pursuit of USAP and Welsh Carson in 2023, when it alleged that the firm had launched a roll-up scheme when it created the company in 2012. By purchasing numerous major anesthesia groups in Texas, the firm “cost Texans tens of millions of dollars more each year in anesthesia services than before USAP was created,” the FTC said at the time.
However, last spring, Welsh Carson looked to have escaped the FTC’s noose when it convinced a federal judge overseeing the case to remove the firm because it had a minority, noncontrolling stake in USAP. The judge denied USAP’s motion to dismiss at the time. (And the antitrust case against USAP is not included in Friday’s settlement.)
Subsequently, the FTC chose to pressure Welsh Carson with the threat of a separate administrative antitrust case, a spokesperson for the firm said.
“In a last-minute effort to claim a political victory, the outgoing FTC leadership threatened to re-litigate in its captive administrative court the exact same overreaching claims that were dismissed last year by an independent Federal judge unless we agreed to a settlement by Inauguration Day,” the spokesperson said in an emailed statement. “Despite our confidence in prevailing again in any repeat of this case, we made the decision to agree to a benign notice settlement that will not affect our business in any respect and involves no admissions of wrongdoing or monetary penalties. This allows us to put a politically motivated matter behind us and avoid additional expense and distraction.”
The FTC’s press release announcing the settlement suggested that the regulator would be unafraid to threaten an administrative action against other entities that mount a similar legal defense.
“The Commission’s latest action underscores that the common corporate tactic of seeking dismissal of a federal case on Section 13(b) grounds may delay—but will not deny—the FTC’s efforts to challenge anticompetitive conduct,” the FTC wrote. “If necessary, the Commission will bring suit in administrative court to protect consumers from anticompetitive conduct. The settlement here avoids the Commission bringing such an administrative action.”
As suggested by the Welsh Carson representative, the case against USAP and Welsh Carson has become an ideological point of reference for outgoing Chair Lina Khan’s FTC.
The Biden administration had instructed its agencies to more heavily scrutinize private equity investments and other instances of “corporate greed in healthcare.” FTC messaging and events during the subsequent months often highlighted Welsh Carson as a case study of private-equity-backed roll-up schemes. Just this week, it co-released a report with two other federal agencies that outlined public support for policy action against private equity healthcare investors.
Though the commission voted 5-0 in favor of the settlement, statements issued by Khan and Commissioner Andrew Ferguson, who will head the agency under President-elect Donald Trump, struck different tones.
Khan’s statement pointed to “novel” conditions within the agreement that she said were specifically designed with private equity defendants in mind, such as the extension of restrictions to Welsh Carson’s portfolio companies. The agreement is “a valuable blueprint” for future agency action against such entities, she said.
“Like other private equity firms, Welsh Carson uses a complex maze of related entities and funds to carry out its business,” she wrote. “Indeed, the Commission’s complaint in this matter identifies no fewer than seven different Welsh Carson affiliates as defendants, including two separate private equity funds.”
Ferguson instead sought to distance himself from Khan and the agency press release’s suggestions “that this case is extraordinary because it involves ‘private equity’ and ‘serial acquisitions,’ and hint at antipathy toward private equity.”
Welsh Carson’s acquisitions gave it monopoly power that harmed competition and inflicted economic injury on the public, he wrote. Its status as a private equity firm is “irrelevant” to the antitrust analysis that triggered enforcement, he wrote.
Ferguson also reiterated broader support for dealmaking than his predecessor by latching onto Khan’s “red herring” reference of a 2023 Merger Guidelines overhaul.
The commissioner spoke of the guidelines describing “a strategy of multiple acquisitions in the same or related business lines” as a potential violation of Section 7 of the Clayton Act. Ferguson specified that Section 7 does not outright prohibit a pattern of acquisitions but rather those that lessen competition or create a monopoly.
“That is what the Complaint accuses Welsh Carson of doing—making acquisitions that in fact tended to create a monopoly and injured vulnerable Americans,” he wrote. “The public should disregard my Democratic colleagues’ rather clumsy attempt to make a run-of-the-mill enforcement matter seem like an avant-garde application of novel provisions of the 2023 Guidelines.”