Lawmakers in Washington are taking aim at the growing clout of large insurers that also own health care providers – a dynamic that could reverberate across the ambulatory surgery center (ASC) industry.
Sen. Jeff Merkley (D-Ore.) – joined by a slate of Democratic lawmakers including Sen. Elizabeth Warren (Mass.), and Reps. Pat Ryan (N.Y.), Pramila Jayapal (Wash.) and Val Hoyle (D-Ore.) – revealed the Patients Over Profits Act earlier this month.
The legislation would make it “unlawful for any person to both directly or indirectly own, operate, or control” a health insurance issuer and provider organization at the same time. That also includes health care management series organizations.
In practice, that means health care giants that own both insurance arms and provider networks – such as UnitedHealth Group’s (NYSE: UNH) Optum, which operates one of the nation’s largest physician groups and ASC powerhouse SCA health — could be forced to split up those businesses.
That’s, of course, if the legislation makes it out of Congress and is signed into law by President Donald Trump, which is extremely unlikely.
“UnitedHealth has gobbled up our local health care practices, creating a monopoly that directly hurts everyone in our community,” Congressman Pat Ryan said in a statement. “In their greedy pursuit of profits, they now own the insurance company, they own your doctor, they own the pharmacy and they own the software that processes all of your information – and they use it all to keep prices high and drive quality down. Enough – it’s time to break up UnitedHealth and put you back in control of your own health care.”
Material posted to Ryan’s website related to the legislation specifically called out Optum’s acquisition history, highlighting its focus on ASCs.
What the bill does
The legislation would bar common ownership between insurers and providers paid by Medicare Part B or via Medicare Advantage (MA) plans.
That includes physician practices, ASCs and management services organizations that contract with providers. Hospitals, pharmacies and durable medical equipment (DME) suppliers are explicitly excluded.
Companies already structured under this model would have two years from enactment to divest either the insurance or provider arm.
For acquisitions made after enactment, the divestment period shrinks to one year.
In theory, the bill would come with sharp enforcement teeth. Regulators from the Department of Justice (DOJ), the Federal Trade Commission (FFTC), or state attorneys general could seek injunctive relief and force divestitures.
Entities found in violation would also be required “to disgorge any revenue received from the provision of health care services during the period of such violation.”
Medicare Advantage and Part D organizations would face additional scrutiny. Beginning in 2026, the secretary of Health and Human Services (HHS) would be prohibited from contracting with Medicare Advantage organizations that also own providers.
Claims from noncompliant entities would be considered “false or fraudulent” under federal law.
“Across the country, insurance companies are buying up doctors’ offices, driving up costs, and putting insurance company profits over patients,” Sen. Warren said in a statement. “Our bill cracks down on greedy insurance companies’ attempts to control doctors and squeeze patients for every cent.”
Odds of passage
The bill faces an uphill climb in the Republican-controlled House, where sweeping structural reforms to health care ownership models have gained little traction.
An example of how the GOP-led Congress and the Trump White House view health care consolidation and ownership differently than Democrats and the Biden administration is evident in how the DOJ handled UnitedHealth Group’s acquisition of Amedisys Inc. (Nasdaq: AMED).
While the DOJ challenged the deal, it ultimately went through in August.
In addition to the aforementioned members of Congress, the legislation is supported by Sen. Edward Markey (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.).
Industry lobbying is also expected to be fierce, given the scale of divestitures the legislation envisions.
Even so, the proposal aligns with a broader bipartisan concern about consolidation and lack of competition in U.S. health care. The FTC has already launched inquiries into noncompete agreements and private equity ownership in health services.
