---
description: Both the Patients Over Profits Act and Break Up Big Medicine Act would ban all insurer-provider common ownership with no size thresholds or purpose-built exemptions catching Devoted and Kaiser alongside UnitedHealth
type: claim
domain: health
created: 2026-02-20
source: "POP Act H.R.5433/S.2836 September 2025; Break Up Big Medicine Act Warren/Hawley February 2026; Frier Levitt POP Act analysis 2025; Sheppard Health Law analysis 2025; AJMC analysis February 2026; On Healthcare Tech impact analysis February 2026"
confidence: proven
---

# anti-payvidor legislation targets all insurer-provider integration without distinguishing acquisition-based arbitrage from purpose-built care delivery

Two bills introduced in the 119th Congress would structurally prohibit the "payvidor" model -- insurers that also own or control care delivery:

**Patients Over Profits Act (POP Act)** -- H.R.5433 / S.2836, September 2025, sponsored by Ryan/Hoyle/Jayapal/Merkley/Warren (all Democrats):
- Makes it unlawful to simultaneously own an "applicable provider" AND a health insurance issuer
- "Applicable provider" covers Medicare Part B and Part C providers but explicitly **excludes hospitals**
- Aggressively targets **indirect control** -- MSO pathways, MSAs, reserved rights, veto powers, governance levers. This closes the corporate-practice-of-medicine workaround where insurers don't technically "own" practices but control them through management agreements
- **No size thresholds** -- a 466K-member startup treated identically to a 9.9M-member incumbent
- Enforcement through HHS, DOJ, FTC, state AGs; violations trigger False Claims Act liability
- Two-year divestiture window

**Break Up Big Medicine Act** -- Warren/Hawley, February 2026 (bipartisan):
- Glass-Steagall model: prohibits common ownership of insurer/PBM AND provider/MSO under same parent
- Also prohibits wholesaler + provider common ownership (targets PBM-pharmacy-provider trifecta)
- **Does not require the full trifecta** -- owning insurer + provider alone is sufficient to trigger
- No apparent size thresholds or exemptions
- One-year compliance window (stricter than POP Act)
- Automatic penalties: profit disgorgement, forced asset sales, 10% of profits into escrow monthly
- Private citizen enforcement rights alongside FTC/HHS/DOJ/state AGs

**What both bills miss:** Since [[CMS 2027 chart review exclusion targets vertical integration profit arbitrage by removing upcoded diagnoses from MA risk scoring]], the specific abuses Congress is responding to -- retrospective chart review coding, MLR gaming through intercompany pricing -- are already being addressed through CMS rulemaking. The bills go further by banning the **structure** rather than the **mechanism**, which catches purpose-built integrators (Devoted, Kaiser) who don't use the arbitrage mechanisms alongside the acquisition-based integrators (UHC/Optum, CVS/Oak Street, Humana/CenterWell) who do.

**Likelihood of passage:**
- POP Act: **Very low.** All-Democrat sponsors, zero Republican cosponsors, Republican House majority. The bill has been referred to committee with no hearings scheduled.
- Break Up Big Medicine: **Low-to-moderate.** Bipartisan sponsorship (Hawley is a Trump ally and HELP Committee member) gives it more runway. AJMC-cited legal experts say "chances of ultimate passage are not very high right now." But provisions could attach to appropriations or reconciliation vehicles heading into 2026 midterms.

**The lobbying opposition would be massive.** UnitedHealth Group spent $9.93 million lobbying in 2025, doubling in-house lobbyist staff. The full opposition coalition spans AHIP, PCMA, CVS Health, Cigna/Evernorth, Elevance Health, and the three major wholesalers (McKesson, Cencora, Cardinal Health). There is no historical precedent for healthcare structural separation legislation in the US -- the HMO Act of 1973 actually *encouraged* integration by modeling the law on Kaiser's structure. Congress has never forced divestiture of healthcare delivery assets by insurers.

**The most likely outcome is CMS regulatory action rather than legislative structural separation.** The chart review exclusion is already in proposed rulemaking. CMS has issued an RFI on MLR reform for vertically integrated insurers. This approach is more targeted (penalizes abuse mechanisms, not structures), doesn't require legislation, and is already underway. Since [[four competing payer-provider models are converging toward value-based care with vertical integration dominant today but aligned partnership potentially more durable]], the CMS approach preserves the aligned partner model while eroding the integrated behemoth's arbitrage advantage.

The irony: if either bill passes as written, it would destroy the evidence that insurer-provider integration **can** work for patients -- purpose-built models like Devoted and Kaiser -- alongside the acquisition-based models that gave rise to the legislation. Since [[proxy inertia is the most reliable predictor of incumbent failure because current profitability rationally discourages pursuit of viable futures]], UHG's $9.93M lobbying spend to preserve the status quo is itself proxy inertia -- but if successful, it protects Devoted's structure too.

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Relevant Notes:
- [[CMS 2027 chart review exclusion targets vertical integration profit arbitrage by removing upcoded diagnoses from MA risk scoring]] -- CMS mechanism-targeting is the alternative to legislative structural separation and is already further along
- [[four competing payer-provider models are converging toward value-based care with vertical integration dominant today but aligned partnership potentially more durable]] -- both bills would reshape the competitive landscape by banning the Integrated Behemoth and Aligned Partner models equally
- [[Kaiser Permanentes 80-year tripartite structure is the strongest precedent for purpose-built payvidor exemptions because any structural separation bill that captures Kaiser faces 12.5 million members and Californias entire healthcare infrastructure]] -- the exemption precedent that could protect purpose-built payvidors
- Devoted faces low-probability but existential regulatory risk from structural separation bills that would require divesting Devoted Medical within one to two years -- Devoted-specific impact assessment
- [[proxy inertia is the most reliable predictor of incumbent failure because current profitability rationally discourages pursuit of viable futures]] -- UHG lobbying to preserve the status quo is proxy inertia that paradoxically also protects purpose-built competitors
- five guideposts predict industry transitions -- rising fixed costs force consolidation and deregulation unwinds cross-subsidies creating cream-skimming opportunities -- the anti-payvidor bills represent re-regulation that would unwind the vertical integration consolidation wave

Topics:
- devoted overview
- health and wellness
