As federal regulators intensify oversight of the healthcare industry, PYA Principal Valerie Rock is helping private equity managers understand how enforcement initiatives are impacting their investment risk.
In recent national coverage by PEI Group, Rock discusses the Centers for Medicare & Medicaid Services’ (CMS) shift toward proactive anti-fraud enforcement—supported by advanced analytics and initiatives such as Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH).
She notes that as CMS pushes reviews earlier in the process, healthcare organizations are experiencing a surge in denials and complexity, with many struggling to keep pace.
For private equity firms, regulators are increasingly “looking upstream” at the ownership level to assess accountability for compliance breakdowns.
“Now the private equity firm is at risk, not just the portco [portfolio company],” Rock says. “…one of the areas inspectors general and DOJ and CMS are focusing on [is] ‘What did you know out of due diligence, and did you address it’.”
This heightened focus on fraud detection raises the stakes for diligence and oversight, particularly as enforcement tools such as the False Claims Act and whistleblower incentives motivate reporting of fraud, she says.
Rock offers several strategies for private equity firms to prepare for the increased scrutiny, such as prioritizing compliance early and embedding oversight throughout integration.
Read the full article written by Bill Myers in PEI Group’s publication, Private Funds CFO.
PEI Group is a business intelligence company that provides market insight to the global private equity industry.
PYA helps private equity managers develop proactive anti-fraud initiatives and strong compliance frameworks to protect value and manage risk in healthcare investments. Learn more about PYA’s services for private equity firms in healthcare.
