Redrawing the Healthcare Map: What is the POP Act?

If enacted, the POP Act wouldn’t simply tweak existing regulations; it would redraw the structural map of American healthcare. The legislation establishes a firm line prohibiting common ownership or control between health insurers and physician or certain outpatient provider entities that bill Medicare Part B or participate in Medicare Advantage (MA) plans. This directly challenges the dominant strategy of the past decade: vertical integration – the consolidation of different stages of healthcare delivery under one corporate umbrella.

Historically, vertical integration has been championed as a means to control costs, align financial incentives, and improve population health management. Insurers, from national giants to regional players, have expanded into the provider space through acquisitions, affiliations with physician groups, and the development of care delivery platforms. The core idea was that by controlling both the financing and delivery of care, insurers could streamline operations, reduce inefficiencies, and enhance care coordination. This often involved acquiring practices directly or utilizing Management Services Organizations (MSOs) and Management Services Agreements (MSAs) in states with restrictions on corporate practice of medicine.

However, sponsors of the POP Act are questioning the very premise of vertical integration, suggesting it may be exacerbating market dysfunction, particularly within Medicare Part B and Medicare Advantage. Critics, conversely, warn that a complete ban could create new inefficiencies and distort the market. The bill’s reach extends beyond direct ownership to encompass indirect and functional control, aiming to dismantle much of the infrastructure supporting insurer-led care models.

Proponents argue that insurer ownership of physician practices can blur the lines between utilization management and clinical decision-making, potentially leading to conflicts of interest. They contend that financial incentives tied to insurance profits could influence care decisions, such as steering referrals within owned networks or manipulating coding and risk adjustment practices. These advocates fear that integration strategies designed to control costs may instead lead to increased market concentration, reduced patient choice, and higher public program spending.

Key Provisions of the Patients Over Profit Act

• Prohibits direct or indirect ownership or control of both a health insurance issuer and participating providers (excluding hospitals, critical access hospitals, rural emergency hospitals, pharmacies, and durable medical equipment suppliers).
• Covers “health insurance issuers” as defined in 42 U.S. Code § 300gg-91, including HMOs, but excludes employer-sponsored plans governed by ERISA.
• Broadly restricts MSOs and MSAs, focusing on control mechanisms beyond just ownership.
• Mandates divestiture timelines: two years for existing arrangements and one year for new ones.
• Authorizes enforcement by the Department of Justice, FTC, HHS OIG, and state Attorneys General, with the power to compel divestiture and recover healthcare revenue.
• Establishes an FTC fund to distribute recovered funds to affected communities.
• Bars non-compliant MA organizations from offering Medicare Advantage plans.
• Subjects violators to potential False Claims Act (FCA) exposure.
• Provides a comprehensive definition of MSOs and MSAs to capture all relevant business relationships.

In essence, the POP Act, if it becomes law, would require health insurers to divest any operational or ownership ties to outpatient providers billing Medicare, facing financial penalties and program exclusion for non-compliance.

Where Does the POP Act Stand Now?

As of early November 2025, the POP Act remains in committee in both the House and Senate. Introduced on September 17th, it was referred to multiple committees – Judiciary, Energy & Commerce, and Ways & Means in the House, and the Judiciary Committee in the Senate. No floor votes have occurred, and no markup sessions have been scheduled. However, the multi-committee referral signals broad policy interest encompassing competition, Medicare finance, and delivery reform. The bill could be considered in the current session or reintroduced in the next Congress.

Why This Bill Matters – Even If It Doesn’t Pass

Regardless of its ultimate fate, the POP Act reflects a significant shift in thinking among some lawmakers, favoring structural separation over targeted regulatory oversight. This could prompt vertically integrated health systems, insurers, investors, and regulators to reassess their risk assessments. The legislation echoes the Glass-Steagall Act of 1933, which separated commercial and investment banking to prevent conflicts of interest. While Glass-Steagall was later repealed, both laws aim to establish clear boundaries between distinct market roles to protect public trust.

What are the potential consequences of this shift for patients and providers?
How might the healthcare landscape evolve if insurers are forced to divest from provider groups?

Potential Market Impacts

• National Payors: Could face multibillion-dollar divestitures and disruption to actuarial models and value-based contracts.
• Regional Payors: Would need to unwind MSO interests or renegotiate provider alignment models.
• Integrated Delivery Networks (IDNs): Face an existential challenge, potentially unwinding decades of organizational design.
• Hospital-Based Health Systems & Private Equity: May absorb divested physician practices, potentially leading to increased competition.
• Medicare Markets: Could see disruption to Medicare Advantage pricing and enrollment.
• Healthcare Costs: The impact on costs and outcomes remains uncertain, potentially replacing one set of problems with another.

Several states are already increasing scrutiny of healthcare transactions, including those involving insurers and providers. California, Oregon, and New York have implemented measures to enhance transparency and oversight, suggesting a growing trend toward state-level regulation.

Frequently Asked Questions About the Patients Over Profit Act