Payer-Provider Tensions and DOJ Scrutiny of UnitedHealthcare with Jakob Emerson

Summary

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Episode Summary: Payer-Provider Tensions and DOJ Scrutiny of UnitedHealthcare with Jakob Emerson

Becker’s Healthcare Podcast – August 29, 2025
Guest: Jakob Emerson (Payer business reporter)
Host: Scott Becker

Episode Overview

This episode delves into two pressing issues in U.S. healthcare: the intensifying conflicts between providers (hospitals and health systems) and payers (insurance companies), and the expanding federal scrutiny of UnitedHealthcare by the Department of Justice (DOJ), including allegations beyond Medicare Advantage fraud. Jakob Emerson brings expert insight, illustrating these trends with recent real-world examples and forecasting more turbulence ahead across the sector.

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Key Discussion Points & Insights

1. Provider-Payer Hostility Reaches New Highs

• Escalating Contract Terminations:

  • Jakob notes that contract negotiations are "going south all over the country" (02:16).
  • Major players are taking unprecedented steps, such as full terminations instead of prolonged negotiations.

• Notable Examples:

  • Johns Hopkins vs. UnitedHealthcare:
    • "Johns Hopkins has gone out of network with UnitedHealthcare... one of the best healthcare systems in the world, and now it's out of network with the largest health insurance company in the world." – Jakob Emerson (02:26).
  • Maine System and Anthem:
    • Main system ends relationship with Anthem, moving to general mediation.
  • Missouri Anthem Contract Dispute:
    • Required testimony before a state legislative committee; resolved only after months out-of-network.
  • Ohio Health System Policy:
    • Refusing all out-of-network patients except emergencies; patients must have in-network coverage to access routine care.

• Shifting Language & Strategy:

  • Providers and payers are issuing public declarations of contract terminations, not just warnings.
  • "The lines in the sand are being drawn quicker and in a more intense way than we've seen before." – Jakob Emerson (02:58)

• Underlying Financial Pressure:

  • Payers face strained finances; providers worry about Medicaid cuts and the potential end of ACA-enhanced tax credits.
  • "Every dollar is counting more than it ever has before for both sides." – Jakob Emerson (04:14)

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2. DOJ Investigation Grows Beyond Medicare Advantage

• Original Focus:
  • DOJ investigation began on UnitedHealthcare’s Medicare Advantage billing and coding practices (alleged fraud).
• Expanded Scrutiny:
  • New exclusive reporting (Bloomberg): DOJ is now probing beyond Medicare, specifically looking at Optum and OptumRx.
    • Focus on: reimbursement practices between divisions and compensation for employed physicians.
    • UnitedHealth's sheer size—"the largest physician network in the country" with at least 90,000 doctors (05:13).
• Antitrust Angle:
  • DOJ concerns about market dominance: possible anti-competitive practices, vertical integration, and impact on market competition.
  • "They're now...looking at the company as a whole versus specific sections." – Jakob Emerson (05:42)
• Political Continuity:
  • Regulatory scrutiny unchanged from Biden to Trump administrations.

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3. The Medicare Advantage Squeeze

• Tension Points:
  • Providers see Medicare Advantage as less profitable and more controlling.
  • Both insurers and health systems anticipate a tumultuous 2026.
    • "I've heard the term fasten your seatbelts for in terms of Medicare Advantage next year..." – Jakob Emerson (06:56)
    • Some health systems are refusing to contract with Medicare Advantage plans.
  • Issues include pre-authorization, reimbursement rates, and overall profitability.
• Federal Push vs. Provider Reluctance:
  • "You got this federal push towards Medicare Advantage and the health systems and providers really blanching at it because their pay is worse, their control is worse, they don't love it..." – Scott Becker (07:47)

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Notable Quotes & Memorable Moments

• On Contract Hostility:
  • "The lines in the sand are being drawn quicker and in a more intense way than we've seen before." – Jakob Emerson (02:58)
• On Financial Pressures:
  • "Every dollar is counting more than it ever has before for both sides." – Jakob Emerson (04:14)
• On UnitedHealthcare DOJ Probe:
  • "They're looking at how the different parts of the company reimburse each other; maybe have gotten too big according to the government and...gobbled up markets from an antitrust perspective and reduced competition..." – Jakob Emerson (05:26)
• On Medicare Advantage Outlook:
  • "I've heard the term fasten your seatbelts for in terms of Medicare Advantage next year..." – Jakob Emerson (06:56)
• On Systemic Tensions:
  • "You got this federal push towards Medicare Advantage and the health systems and providers really blanching at it because their pay is worse, their control is worse, they don't love it." – Scott Becker (07:47)

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Timestamps for Key Segments

• Introduction & Top Stories (00:00–01:58)
• Provider-Payer Tensions (02:01–04:47)
  • Johns Hopkins & UnitedHealthcare Out-of-Network (02:26)
  • Shift in Negotiation Rhetoric (02:58)
  • Underlying Financial Drivers (04:14)
• DOJ and UnitedHealthcare (04:48–06:31)
  • DOJ moves beyond Medicare Advantage (05:13)
  • Antitrust Concerns (05:42)
• Medicare Advantage Outlook (06:31–08:06)
  • 2026: "Fasten your seatbelts" (06:56)
  • Federal vs. Provider Tension (07:47)
• Wrap-Up (08:29–08:37)

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Episode Tone & Takeaways

• Tone: Analytical, urgent, matter-of-fact, occasionally exasperated at the state of conflict.
• Overall Message:
  • The relationship between payers and providers is more fraught than ever—with more open conflict, sharper rhetoric, and bigger stakes attached to contract disputes.
  • At the same time, UnitedHealthcare—the sector titan—is under widening federal scrutiny, which could herald bigger changes in industry regulation and competition.
  • All players brace for further turbulence, especially as Medicare Advantage becomes a focal point for both financial strategy and policy-driven tension.

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For listeners seeking insight on the immediate turbulence defining American healthcare—and the forces at play in 2025—this episode offers concise, credible, and illuminating analysis.

Transcript

[A]

This is Scott Becker with the Becker's Healthcare Podcast. We're thrilled today to be joined by Jacob Emerson. Jacob covers the payer business that the insurance industry like nobody else in the country. Jacob, tell us what trends you're watching currently. What are the top stories in the healthcare insurance world?

[B]

Yeah, great to talk with you, Scott. So, you know, another day, another new part of the UnitedHealth story or saga that we've been hearing about over these last six months or so. The most recent update is that we knew a few months ago and United actually, you know, acknowledged it, that the Department of Justice has been investigating the company for alleged Medicare Advantage fraud. All going back to that coding and billing issue that's been plaguing the industry for over a decade at this point. But now what we've heard from in an exclusive report from Bloomberg is that the DOJ is actually pro. Has been probing United beyond their Medicare business. They're probing other parts of the company, which of course is, is massive and has a lot of other pieces of the healthcare system. And so the DOJ is investigating other pieces, including Adoptum. So that's one thing I wanted to talk about. And then the second topic I wanted to talk about is just the level of hostility we're, we're seeing really start to happen across the country in terms of the, the provider and the, or the hospital and payer contracts. Nothing new. You know, this is, this is structural to the healthcare system and how it operates. They're, they're constantly fighting, renegotiating new contracts and all that good stuff. But the level of rhetoric and honestly action that we've been seeing has risen to a level that I certainly have not seen in covering this topic now for almost four years. And we're seeing some just major players go out of network with each other and just some interesting unique moves in this space that like I said, I just personally have not seen up until this point.

[A]

Jacob, let's talk about that second part first. The increased tension between providers and payers. What are you seeing there? What are you hearing? Are you seeing contract negotiations go south? What are you seeing? People, what's going on there?

[B]

I mean, they're definitely going south and they're going south all over the country. And one story that was in our flagship hospital newsletter just a few days ago this week was that Johns Hopkins has gone out of network with United Healthcare. Obviously Johns Hopkins is one of the best healthcare systems in the world and now it's at of network with the largest health insurance company in the world. So it's just a very notable example. But in terms of, you know, some of the hostility we've been seeing all over the country, we saw a main system say they're just, they've decided to completely end their relationship with Anthem, and now those two companies are going to just, in general mediation over their contract issue. We saw Anthem have to testify for a state legislative committee in Missouri along with another health system over their contract a few months ago, which did eventually get fixed, but it wasn't. It was after being out of network for. For several months. So that had to go in front of state lawmakers. We've seen, you know, just the language changing a bit in terms of one of the sides, either the payer or the provider, just coming out and saying, not that we're going to be eventually going out of network, which is what has usually happened in the past, but that the contract is now just terminated. There's no, you know, maybe negotiations will continue, maybe they won't. Whatever it is, it's the lines in the sand are being drawn quicker and in a more intense way than we've seen before. And then one other example that I wanted to point out that is related to this issue, but I think is also just part of this grand context, is that we saw an Ohio health system say that they're no longer going to be accepting any out of network patients entirely. So unless you are a patient going to that hospital system and you have a health insurance that is contracted with that system, you cannot receive care from that system unless it's an emergency under federal law. So, like I said, just the level of hostility seems to be rising, you know, and some of the reasons we think this is probably all happening is, of course, the financial issues on the payer side have really become strained over this last year or so across all the different markets. And so payers are taking a harder line in the sand. I think providers, you know, going into next year see that there's a very high likelihood that the ACA enhanced tax credits don't get extended. So they're seeing that coming down the pipe. They're seeing the Medicaid cuts coming down the pipe in a few years. So they're really. Every dollar is counting more than it ever has before for both sides. And that is now resulting in some of the language and some of the actions we're seeing in these contract negotiations.

[A]

Fascinating. And tell us what you're hearing about UnitedHealthcare. UnitedHealthcare remains a total juggernaut of behemoth company 400 billion-plus in revenues. One Warren Buffett and Berkshire recently invested in it. What are you hearing and seeing there?

[B]

Yeah, so Bloomberg reported earlier this week that the DOJ has expanded its criminal investigation into the company. Basically they're looking at the pharmacy benefit manager at Optum OptumRx and how it compensates its employed physicians which of course Optum Health is the largest physician network in the country. They have at least 90,000 employed physicians. It's probably much larger at this point. That's a somewhat old figure at this point and up until this week what had only been previously reported was that the company was looking to alleged Medicare Advantage fraud like I mentioned in terms of the billing and coding issues. So that, that tells us that you know one, that they're, that the antitrust scrutiny of United and really the, the industry at large has not gone away at all compared to the Biden administration. So the DOJ under, under the Trump administration is just in looking into these issues but that they're now they're looking at the company as a whole versus specific sections. They're looking at how the different parts of the company reimburse each other maybe have gotten too big according to the government and you know, gobbled up markets from an antitrust perspective and reduce competition whatever it may be. Whatever the government is thinking internally. It just tells us that this, that there's a lot more going on here and they're taking a much bigger look at how United is operating and how it's grown over, over the last decade or so.

[A]

Fascinating to watch. Jacob, anything else that's top of mind currently? I always learn a lot listening to you. It seems like we are in a time where there's going to be increased provider payer attention. Payers are also trying to raise their insurance rates a good deal. Providers would like more than to flow down to them.

[B]

Yeah.

[A]

And I guess that's part of the crux of the problem too. In addition to all the pre authorization and other types of issues that are going on.

[B]

Yeah, I mean I, I certainly don't see how it's going to get any better given all the headwinds that we know are here are coming. And what I've heard from insurance CEOs directly over these last few weeks or so is that 2026 is also going to be. I've, I've heard the term fasten your seatbelts for in terms of Medicare Advantage next year that the contracting issues with health systems is not going away, that many health systems are still deciding not to contract with either some or all Medicare Advantage plans over, you know, these issues that we're talking about, the PR authorization issues, the reimbursement issues and all that good stuff. So just from a Medicare Advantage perspective alone, it's going to be a very, I think, intense year, both for the hospitals and for the insurers as they continue to navigate, which what has just been not, not a great business for them as of late.

[A]

No. And really fascinating is you got this federal push towards Medicare Advantage and the health systems and providers really blanching at it because their pay is worse, their control is worse, they don't love it. And so you've got this real, you know, challenging situation between payers, the federal government and providers on this Medicare Advantage issue.

[B]

Yeah, yeah. No, it's fascinating. And like I said, it didn't really change from the Biden to the Trump administration. The scrutiny is still alive as it was. And that's certainly what we're hearing from from both sides of the, from the, I almost said aisle, but I meant the providers and the payers. So, yeah, it's going to be an interesting next year as well.

[A]

It sure is. Jacob, thank you, as always, for joining us on the Becker's Healthcare podcast. You're fantastic. Thank you very, very much.

[B]

Yeah, thank you, Scott.