Lawmakers investigate five private equity firms
Senior members of the U.S. Senate Finance Committee began their probe into private equity firms' effect on long-term care, sending letters with inquiries to five firms.Warburg Pincus, Fillmore Capital Partners, The Carlyle Group, Formation Capital LLC and Cammeby's Capital Group were asked to detail their investment stakes in nursing homes and to provide copies of contracts about their operation. The firms have until Nov. 9 to respond to the requests. The Carlyle Group is in the process of purchasing Manor Care Inc., the largest nursing home chain in the country.
Sen. Max Baucus of (D-MT), chairman of the committee and Sen. Charles Grassley of (R-IA), senior Republican on the committee, disclosed their concerns about private equity following a New York Times story last month that said that many nursing homes experienced staff cuts and declining care after being bought by private equity firms. They asked the Centers for Medicare & Medicaid Services about large investment firms' effect on quality of care.