WSJ’s Editorial Board Contradicts What Its Newsroom Has Reported on Medicare Advantage

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The Wall Street Journal’s Editorial Board vs. The Wall Street Journal’s Newsroom.

The paper that exposed Medicare Advantage’s $50 billion overbilling scheme is now urging the government to make it the default for every senior in America.

During my two decades working for Big Insurance, I learned what industry spin looks like. I know what it sounds like. And I know that when a major newspaper’s editorial board publishes a piece defending an industry that has spent millions cultivating its editorial goodwill, the result often reads exactly like the Wall Street Journal’s editorial yesterday, “The Truth About Medicare Advantage.”

The piece is a masterclass in selective evidence. But what makes it remarkable is that the most damning rebuttal to it doesn’t come from me, or from Medicare Advantage’s many critics, or from the political left. It comes from the Wall Street Journal’s own newsroom.

In the fall of 2022, a team of Journal reporters did something extraordinary. They negotiated a data-sharing agreement with the Centers for Medicare and Medicaid Services, gaining access to 1.6 billion Medicare Advantage records over a 12-year period — every prescription filled, every doctor visit, every hospitalization. The investigation that followed was among the most rigorous pieces of health care journalism in years.

What they found was damning. Medicare Advantage plans received roughly $50 billion in payments between 2018 and 2021 for diagnoses that were questionable — conditions added to patients’ records not by their doctors, but by the insurers themselves. The Pulitzer Prize committee called it a series showing how health insurers gamed the Medicare Advantage program to collect billions for nonexistent ailments while shunting expensive cases onto the public.

The Journal’s editorial board was apparently not paying attention to its own reporters. Because in its editorial yesterday, the board cites a study funded by Elevance Health — one of the largest Medicare Advantage insurers in the country — to argue that private MA plans reduce Medicare spending. It calls opposition to Medicare Advantage “ideological, no matter the facts.”

“No matter the facts” certainly applies to the Journal’s editorial.

The central fact the editorial board cannot afford to acknowledge — because the entire argument would collapse if it did — is the ongoing Medicare Advantage overpayment scandal. MedPAC, the independent congressional agency that advises Congress on Medicare, projects that for 2026, Medicare Advantage payments will run $76 billion — or 14% — above what traditional Medicare would spend on the same beneficiaries, after accounting for health status, coding differences, and geographic factors. Note that the $76 billion in overpayments is just for this year. Looking back over the history of the Medicare Advantage program and the total likely would grow to nearly a trillion dollars if not more.

This is not a partisan number. MedPAC is a nonpartisan body. The methodology accounts for the very factors the industry argues should be included. And the conclusion is unambiguous: the federal government spends substantially more of our tax dollars per person under Medicare Advantage than it would under traditional Medicare. That $76 billion overpayment is not a rounding error. It is more than the entire annual budget of the Department of Education.

The Journal’s editorial board also ignores what that overpayment costs seniors who never chose a private plan. The Journal’s own reporting detailed how MA overpayments translated into roughly $13.4 billion in additional Part B premium costs in 2025 alone — costs borne by every Medicare beneficiary, including those in traditional Medicare who never signed up for a private Medicare replacement plan, which is what Medicare Advantage is. Every senior paying Part B premiums is, in effect, subsidizing the insurers the editorial board is championing.

The editorial argues that Medicare Advantage reduces the incentives for hospitals to upcode patients to a higher level of complexity. This would be a compelling point if the Journal’s own investigation had not spent years documenting how MA insurers themselves are the upcoding problem.

The Journal’s investigation found that coding intensity in Medicare Advantage runs 20% higher than in traditional fee-for-service Medicare. Of the 17 audits the Department of Health and Human Services Office of Inspector General has conducted since 2019, there was no support for nearly 69% of diagnoses that Medicare Advantage plans used for risk adjustment, leading to more than $100 million in overpayments to MA plans from upcoding alone. That’s not a rounding error either.

In the early years of private Medicare plans, insurers went to great lengths to sign up only the healthiest seniors and to run off the seniors when they got sick. It was called “cherry picking” and “lemon dropping.” I saw it up close in the early ‘90s when I was at Humana, one of the first insurers to get into the private Medicare replacement business. It was so prevalent in the industry that in 2003 Congress passed legislation to authorize the government to pay insurers more for signing up less-healthy seniors. So for two decades now, insurers have been paid more for sicker patients, which means they have powerful financial incentives to make patients look sicker on paper — but not to pay for treatments they supposedly would need. The Journal’s reporters found that among Medicare Advantage beneficiaries who had an HIV diagnosis added to their record by their insurer, just 17% received any treatment for the disease. Among beneficiaries diagnosed with HIV by their own physician, 92% received treatment. Diagnoses without treatment are not better care. They are extra revenue.

The editorial’s most revealing sentence may be this one: “The opposition to Advantage is ideological, no matter the facts.” This is a tell. It reframes data as politics, and politics as bias — a classic spin move designed to preempt legitimate criticism by impugning the critic’s motives.

But the criticism of Medicare Advantage is most certainly not ideological, and it is not coming only from Democrats. Sen. Chuck Grassley of Iowa, a Republican, wrote to UnitedHealth Group’s CEO arguing that the “apparent fraud, waste, and abuse at issue is simply unacceptable and harms not only Medicare beneficiaries, but also the American taxpayer.” The Trump administration’s Department of Justice opened a criminal investigation into UnitedHealth Group’s Medicare Advantage billing practices (which the Journal reported as a scoop). The Senate Judiciary Committee, which Grassley chairs, published a 104-page report on MA overbilling.

Another senior Republican, Sen. Bill Cassidy, who chairs the Senate Health, Education, Labor and Pensions (HELP) Committee, is the lead sponsor of a bill that would crack down on upcoding. It’s called The No UPCODE Act. These are not the actions of ideologues. They are the actions of Republican legislative leaders and committee investigators who read the Journal’s own reporting and followed up.

The editorial’s timing is no coincidence. Trump’s Medicare director, Chris Klomp, recently confirmed that the administration is actively considering a policy that would automatically enroll new Medicare beneficiaries into private Medicare Advantage plans — a proposal straight out of the Project 2025 blueprint. The editorial reads, at least in part, as advance justification for that policy.

Under current law, seniors who enroll in Medicare are automatically covered by traditional Medicare unless they affirmatively choose a private plan. Under a default enrollment scheme, the reverse would be true: seniors who fail to make an active choice would be placed into a private plan, with the option to switch back – but not for three years. Seniors would be locked in a plan that the government chose for them, that has a limited network of doctors and hospitals, that makes them pay the entire bill for services they might receive outside of that network, and that denies coverage for medically necessary care far more than traditional Medicare – for three years.

The consequences of getting automatic enrollment in MA wrong are severe and often irreversible. The vast majority of states do not require Medigap insurers to sell supplemental coverage to beneficiaries who want to switch back from Medicare Advantage to traditional Medicare outside of limited time windows. For many seniors, once they are in, they are in. The editorial board does not mention this.

And the program is hardly the stable backstop the board describes. A Johns Hopkins Bloomberg School of Public Health analysis found that approximately 10% of Medicare Advantage enrollees — roughly 2.9 million seniors — are being forced to find new coverage in 2026 as insurers exit markets, a tenfold increase in the forced disenrollment rate compared to just two years ago. The board wants to make this the default destination for every new senior in America, just as the private market is demonstrating it cannot sustain its current commitments.

Let’s return to the study the editorial board cites as evidence that Medicare Advantage saves money. The board presents it as peer-reviewed fact. What it does not say is that the researchers are affiliated with Elevance Health — formerly Anthem — one of the largest Medicare Advantage insurers in the country. Industry-funded research is not automatically wrong, but it requires disclosure and scrutiny that the editorial board does not provide. I know from personal experience that industry-funded research is typically rigged to support conclusions the funder wants to convey – to policymakers, the business community, the media and the public – and that any data that do not support the funder’s business objectives never make it into the final report.

In the communications business, we used to call this kind of thing a “third-party validator” — research that carries the appearance of independence while advancing the funder’s interests. I helped produce the playbook. I know how this works.

The Wall Street Journal’s newsroom has done some of the most consequential health care journalism of the past decade. Its reporters negotiated extraordinary data access. They documented, with precision, how the insurance industry has extracted billions from Medicare through practices that the Pulitzer committee described as gaming the system. They named names and they showed their work. And you can be certain that every word they wrote was carefully fact-checked and vetted by the Journal’s legal team.

The editorial board is in the same building as the Journal’s newsroom. I know because I’ve been in those rooms. I know and have worked with many of the reporters who cover the health insurance business, going back to my days in the industry. I can assure you that the Journal’s reporters are among the best in the business and, unlike the editorial writers, most certainly are not motivated by ideology.

The newspaper’s editorial board owes readers the same fidelity to evidence that its reporters have demonstrated. Instead, it has produced a piece of advocacy that reads like it was drafted in a health insurance industry communications shop — cherry-picked studies, industry talking points, and a dismissal of critics as ideologues “no matter the facts.”

I have spent the years since leaving the insurance industry trying to help people understand how spin works – how it is produced, how it travels, and how it takes hold even in institutions that should know better. The Journal editorial board’s Medicare Advantage advocacy is a case study.

This should be studied in every journalism school in America: The paper that exposed Medicare Advantage’s overbilling scheme is now urging the government to make it the default plan for every senior in America. Someone needs to explain that to the reporters who spent three years proving why that is a terrible idea.

Why drugs cost so much, 101: Medicine monopolies

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Why drugs cost so much, 101: Medicine monopolies
https://omny.fm/shows/an-arm-and-a-leg/why-drugs-cost-so-much-101-medicine-monopolies/embed?media=audio&size=wide&style=cover

We’re always asking: Why do drugs cost so freaking much? 

And it’s a complicated question. There are a bunch of reasons — to be sure. But in our reporting over the years, like our stories on insulin and tuberculosis drugs, experts cited one big reason over and over again: 

The pharmaceutical industry wages sophisticated legal battles to keep monopoly control over their best selling, most lucrative drugs — blocking generic competition, and increasing their prices along the way. 

How did it come to be this way? 

In this first episode of a new series – what we’re calling An Arm and a Leg 101 – we’re doing a crash course in the history of the drug patent system.

And the rags-to-riches story of one amazing guy is going to help us do it. 

Al Engelberg got schooled in the Art of the Hustle at a young age, collecting dimes at an illegal bingo game on the Atlantic City boardwalk. 

Later, he’d put those street smarts to use as he sat at the negotiation table in Washington D.C., hashing out the details of a law that would usher in the generic drug industry as we know it. Then made millions from the rules he helped write.

And as he admits, his legacy is mixed. 

On the one hand: The rules Al Engelberg helped write — a grand bargain between generic drugmakers and patent-holding brand pharma companies — unleashed the power of generic drugs to save Americans money. 

Nine out of ten prescriptions written today get filled with a generic.

On the other hand: In the process of making his fortune, Al Engelberg discovered loopholes, gaps, and perverse incentives in that grand bargain. 

Gaps that allowed brand and generic drugmakers to profit by keeping generics for many hit drugs off the market.  

So we now spend more than ever on medicine — and more than 20 percent of Americans report skipping their medication because they can’t afford it. 

Al Engelberg, now 86, has spent the last 30 years — and millions of his own dollars — trying to close those gaps. 

“I live in a world — a pharma world — where half the people think I’m dead, and the other half wish I was,” he tells us. 

You can read more of Al’s story — plus his prescription for fixing the crisis of high drug prices — in his book, Breaking the Medicine Monopolies: Reflections of a Generic Drug Pioneer.

And you can hear our earlier reporting on drug patents here:

John Green vs. Johnson & Johnson (part 1)

John Green vs. Johnson & Johnson (part 2)

The surprising history behind insulin’s absurd price (and some hopeful signs in the wild)

An Arm and a Leg 101 is made possible in part by support from Arnold Ventures.

Private Medicare plans get a break

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After saying it wanted to keep federal payments to private Medicare plans roughly flat next year, the Trump administration reversed course on Monday and gave the insurers a $13 billion pay bump.

Why it matters: 

The average 2.48% pay increase for 2027 was on the high end of analysts’ expectations and marked a win for UnitedHealthcare, Humana and other Medicare Advantage plans, whose stocks tumbled after the administration’s initial proposal in January.

  • The plans will instead see an average increase of nearly 5% when payments are adjusted to reflect how sick enrollees appear, Medicare officials said.
  • The administration was swamped by tens of thousands of comments after the initial proposal of less than a 0.1% increase for 2027.

Driving the news: 

The pay increase reflects higher health cost growth in traditional Medicare that became apparent after additional data from the end of 2025 was crunched.

  • The Centers for Medicare and Medicaid Services also dropped a proposal to update payments to plans based on the health status and demographics of enrollees, which insurers said would have disrupted their ability to care for seniors.
  • Medicare officials said that it makes sense to give insurers more time to absorb prior “risk adjustment” updates.

The administration is moving forward with a plan to prevent insurers from adding diagnoses after reviewing patients’ medical records — a move that addresses coding practices that have received scrutiny and is expected to save nearly $7 billion next year.

What they’re saying: 

Some Medicare providers said the pay boost still doesn’t reflect economic realities, at a time when the cost of drugs, supplies and more patient visits is stoking medical inflation.

  • “When payments fail to keep pace with care delivery costs, the consequences are predictable,” said Jerry Penso, president of medical group association AMGA, predicting possible cuts to supplemental benefits like vision and dental, higher costs to beneficiaries and, in some instances, plans exiting markets.
  • Medicare Advantage enrollment declined in seven states this year as plans pulled out of some markets.

Between the lines: 

The administration’s original flat-funding proposal reflected bipartisan concern over how much money Medicare Advantage costs the health care system.

  • Policymakers’ concerns that health plans aren’t sufficiently lowering costs “will remain a headwind” for Medicare insurers, Duane Wright, senior health policy analyst at Bloomberg, said in an email.
  • Director of Medicare Chris Klomp said the finalized update aims to strike a balance between protecting seniors and protecting taxpayers.
  • “I’m sure that there will be folks on both sides of the equation who may have concerns about where we’ve landed,” he said.
  • “We’re certainly not abdicating responsibility [to taxpayers], nor are we saying that we are done.”

Zoom out: 

Medicare administrators late last week finalized a separate plan to overhaul Medicare Advantage’s quality reporting and ratings system, which they expect will increase payments to plans by $18.6 billion over the next decade.

  • “As health plans incorporate the policies released in recent days, they will continue to focus on keeping coverage and care as affordable as possible during this time of sharply rising medical costs,” Chris Bond, spokesperson for insurance lobbying group AHIP, said in a statement.

What we’re watching: 

Whether insurers run ads accusing the administration of cutting Medicare in the run-up to the midterm elections, as they did with the Biden administration in 2023.

Grit: The power of passion and perseverance

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Leaving a high-flying job in consulting, Angela Lee Duckworth took a job teaching math to seventh graders in a New York public school. She quickly realized that IQ wasn’t the only thing separating the successful students from those who struggled. Here, she explains her theory of “grit” as a predictor of success.

Washington and Lee University’s Speaking Tradition

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Washington and Lee University’s Speaking Tradition is a long-standing campus custom where students, faculty, and staff greet each other with a “hi” or “hello” while passing on campus. Promoting a welcoming, friendly atmosphere and a sense of community, it reflects the university’s values of civility and personal connection. 

Key Aspects of the Speaking Tradition:

  • Origin & Purpose: It is a deeply embedded, informal custom meant to foster community and ensure every individual feels acknowledged.
  • Application: It involves smiling, nodding, or saying hello, especially when walking along the historic Colonnade or paths.
  • “Say Hey” Day: Kathekon students often promote this tradition on campus.
  • Challenges: The tradition faces pressure from technology, such as smartphone usage and headphones.
  • Distinction: The “speaking” part refers to greeting others, not public speaking. 

The tradition is considered a “positive chain reaction” that helps make the university feel like a welcoming community.

The Health of a Civilization

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This insightful observation from science fiction author Robert A. Heinlein suggests that the health of a civilization is best measured by its smallest interactions, not its biggest conflicts.

Here is a breakdown of its meaning:

Civility as Social Glue: Politeness and “gentle manners” are more than just etiquette; they represent a fundamental respect for the social contract. When people stop showing consideration in “minor matters,” it signals that they no longer value their neighbors or the community at large.

The Subtle Rot vs. The Loud Event: A riot is an explosive, often temporary, reaction to a specific problem. However, widespread rudeness is a slow, pervasive rot. Heinlein argues that this quiet erosion of decency is more dangerous because it signifies a deep, internal collapse of shared values that is much harder to repair.

The Foundation of Order: Large-scale order is built upon small-scale respect. If a culture loses its ability to maintain daily politeness, it has lost the very foundation that prevents total chaos. Once mutual consideration is gone, the culture is essentially already “dead.”

In essence, when a culture stops practicing common decency in “minor matters,” it is already “dead”.

Inside Big Insurance’s $1.7 Trillion Year | EP 2

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https://healthcareuncovered.substack.com/p/inside-big-insurances-17-trillion?utm_source=post-email-title&publication_id=255152&post_id=191417345&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

In second episode of the HEALTH CARE un-covered Show, we walk you through the most recent earnings reports of seven of the largest for-profit health insurance corporations in the country.

Every three months, the nation’s largest health insurers release earnings statements filled with crammed financial tables, investor language and Wall Street jargon. Most people never see them. Even fewer try to understand what they really reveal about how the U.S. health care system works.

In second episode of the HEALTH CARE un-covered Show, we do something no one else does: walk you through the most recent earnings reports of seven of the largest for-profit health insurance corporations in the country — UnitedHealth Group, CVS Health (Aetna), Cigna, Elevance, Humana, Centene and Molina. As you’ll see, the results paint a striking picture of how powerful and profitable Big Insurance has become.

Together, those companies collected nearly $1.7 trillion in revenue in 2025, about $175 billion more than the year before and generated more than $54 billion in profits. Yet despite the record financial performance, the companies covered roughly 10 million fewer people than they did in 2024 – and ever-increasing chunks of their revenues are now coming from Americans’ tax dollars.

We show evidence of a trend reshaping the health care economy: self-dealing through insurers’ vertical integration and their huge government contracts, which accounts for much of the industry’s growth. For example, UnitedHealthcare now gets more than 77% of its revenue from government programs such as Medicare Advantage and Medicaid. As a reminder, Medicare Advantage is not traditional Medicare but a very profitable privatized version of the program that’s funded by taxpayers and that last year overpaid insurers by $84 billion.

We also examine stock buybacks. Between 2015 and 2025,these seven companies spent more than $137 billion buying back their own shares, a move that boosts earnings per share and enriches shareholders and top executives. That’s $137 billion that could have been used to reduce premiums and out-of-pocket expenses but went into the pockets of investors instead.

To put the numbers in perspective, we compare these insurers with some of America’s most recognizable corporations — from Chevron and PepsiCo to Bank of America and Salesforce. Most of the big seven generate more revenue than these household names. And many of the insurance conglomerates are growing faster than companies like Target, Uber, Disney and Starbucks.

We take viewers inside Wendell’s office to make sense of Big Insurance’s dense 2025 earnings reports.

You won’t find an analysis quite like this anywhere else.

You can also tune in here:

This episode has been re-uploaded with corrected numbers. For instance, Disney was listed as having revenues of $274.9B in 2025. The correct number is $94.4B. The percent change used in the original video (+80%) was correct.

The Wall Street Chameleon: Big Insurance at an Inflection Point | EP 1

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https://healthcareuncovered.substack.com/p/the-wall-street-chameleon-big-insurance

In Episode 1 of the HEALTH CARE un-covered Show, we examine what may be an inflection point in the health insurance reform debate. Plus, we’re joined by pollster Madeline Conway of Impact Research.

The volume of claims is treated as proof of misconduct, despite the fact that the statute imposes no limit on IDR submissions and explicitly allows for repeated use when payment disputes continue. Further, insurers base this claim on estimates of IDR submissions that were deeply flawed, forecasting nationwide utilization on the experience of one state.

The message is unmistakable: providers are not accused of breaking the NSA, but rather of utilizing it too effectively. For instance, insurers claim that providers submitted “thousands” of IDR disputes, including nearly “200 overlapping proceedings for the same services” across both the federal and state IDR systems, and batched an average of 66 separate items or services into a single IDR filing: Insurers describe these statistics as “overwhelming,” despite the fact that each dispute is linked to a corresponding payment denial or gross underpayment.

Recasting Physician Disputes as “Fraud”

Each lawsuit hones in on physician NSA disputes and castigates them as some kind of “fraud” or “abuse.” The HaloMD lawsuits are a prime example of the insurer taking an NSA dispute, challenging the disputes eligibility for arbitration and then recasting it as “fraud.” What these lawsuits notably fail to recognize is that the outcomes of IDR are determined by independent arbitrators, called certified IDR entities (IDREs), not by the providers themselves.

According to CMS’s public-use files, 82% of 2024 disputes and 80% of 2025 disputes were found eligible for arbitration. This is orders of magnitude greater than what the government had estimated. What these numbers tell us is that the problem with the volume of disputes is not a conspiracy by doctors to abuse this system, but systemic underpayment by insurers, as we have reported.

In the lawsuits, insurers concede that it was the arbitrators, not the providers, who rendered the final awards in these disputes. Insurers also consistently and publicly voice their concerns that NSA awards surpass the Qualifying Payment Amount (QPA), often describing results that are ‘multiples’ of the median in-network rates or even exceeding billed charges. Insurers assert that IDR awards are excessive, “citing CMS data showing that they are on average slightly over 300% of the QPA” of the QPA.

However, a recent analysis shows that the reported QPAs consistently underestimate the actual median in-network rates, with an average discrepancy of 290% in cases where such discrepancies are present. A pervasive problem reported by providers and evident in the public-use files shows thousands of initial offers for payment that amount to less than a dollar. In one documented case involving high-acuity emergency care, the insurer calculated the QPA at $0.01. The arbitrator ultimately awarded $1,196. The gap was not evidence of an inflated charge; it was evidence that the benchmark itself was flawed.

This underestimation is attributed to calculations controlled by insurers, insufficient oversight, and the omission of market factors that Congress mandated arbitrators to consider.

Simply disagreeing with an IDRE’s assessment does not equate to fraud. Rather than modifying payment practices, enhancing negotiations, or pursuing legislative clarity, insurers have opted for litigation as a tool to crush providers while claiming unfavorable arbitration results as evidence that the system is being “manipulated.” They are both arsonists and firefighters.

The Litigation Boa Constrictor

Across jurisdictions, insurers clearly claim that defendants engaged in “coordinated enterprises,” “strategic partnerships,” or “associations-in-fact,” alleging RICO violations founded on the concurrent use of IDR, common billing vendors, and simultaneous filings, even though there is no statutory restriction against coordinated IDR usage or shared administrative frameworks.

The recurring themes in these filings are hard to overlook. In the last 12 months, there have been 11 lawsuits targeting use of the No Surprises Act, four alleging RICO violations and five seeking treble damages.

So far, this coordinated lawfare effort includes the following suits:

  • Blue Cross Blue Shield of Texas v. HaloMD et al. (E.D. Tex., Aug. 2025)
  • Blue Cross Blue Shield of Texas v. Zotec Partners, LLC (E.D. Tex., Dec. 2025)
  • Anthem Health Plans of Virginia v. AGS Health / SCP Health et al. (W.D. Va., Nov. 2025)
  • Community Insurance Co. (Anthem Ohio) v. HaloMD et al. (S.D. Ohio, June 2025)
  • Blue Cross Blue Shield Healthcare Plan of Georgia v. HaloMD et al. (N.D. Ga., May 2025)
  • Anthem Blue Cross (CA) v. HaloMD et al. (C.D. Cal., July 2025)
  • Anthem Blue Cross (CA) v. Prime Healthcare entities (C.D. Cal., Jan. 2026)
  • UnitedHealthcare of Pennsylvania, Inc. v. NorthStar Anesthesia of Pennsylvania, LLC (E.D. Pa., Dec. 2025)
  • UnitedHealthcare Insurance Co. v. Maui Emergency Care Physicians, LLC (D. Haw., Jan. 2026)
  • United Healthcare Services, Inc. v. Concord Company of Tennessee, PLLC (W.D. Ky., Jan. 2026)
  • UnitedHealthcare Ins. Co. v. Radiology Partners, LLC (D. Ariz, Aug. 2025)

These prosecutions follow a distinct pattern of allegations: strategic batching, simultaneous filings, excessive offers, false statements, and an alleged conspiracy to take advantage of IDR. Even when the factual circumstances vary, the narrative remains the same. This consistency indicates not an independent discovery of wrongdoing, but a calculated strategy.

The targets of these lawsuits represent the full spectrum of organizations utilizing the NSA. From revenue cycle management (HaloMD) to large physician staffing organization (SCP) to small physician practice management group (Concord Company), insurers are constricting the entire provider community hoping to alter the NSA through legal outcomes.

Litigation as Press Release

The litigation involving Prime Healthcare highlights this strategy particularly well. In this case, insurers openly admit that hospitals are utilizing IDR instead of balance billing patients, precisely what Congress intended, yet they still label this behavior as abusive because it led to payments that were higher than what insurers were prepared to offer. Lawful reliance on IDR is recast in this complaint as “extractive,” “indiscriminate,” or “profitable abuse,” as if the issue lies not with insurer underpayment but with the presence of an independent referee who has the authority to disagree with them.

The impact on the real world is far from just a theory. These lawsuits aim for treble damages, annulment of arbitration awards, and injunctions intended to completely deny providers future access to IDR. The message from insurers is clear: engage in the IDR process established by Congress, and you will face consequences. Providers who utilize IDR are not seen as legitimate participants in a federal program; instead, they are viewed as targets, labeled as racketeers, pulled into costly litigation, and compelled to defend their right to contest underpayment. These lawsuits serve as a deterrent and act as a warning to discourage providers from engaging in IDR by making the costs of participation excessively burdensome.

Breaking the NSA Balance

No lawsuit will have more far reaching consequences for physicians than UnitedHealthcare v NorthStar Anesthesia (the insurer has filed five similar lawsuits). While this suit follows the usual script of allegations it aims for something more pernicious than unflattering headlines: declaratory judgment of fraud for ineligible disputes. The eligibility of an NSA dispute rests solely with CMS and the independent arbitrator – they are administrative. Physicians have repeatedly shown that insurers withhold critical information needed to determine a claim’s eligibility, the result being that occasionally physicians will dispute a claim that is ineligible for arbitration. According to CMS, with more than 80% of claims sent to arbitration being determined as eligible, these mistakes are the exception, not the rule.

However, if UnitedHealthcare is granted the relief it seeks, insurers will be able to challenge dispute eligibility in court, outside of arbitration, and receive direct judgments of “fraud” against physicians who have filed ineligible claims. A declaratory judgment of fraud would not simply reverse a payment. It would create precedent allowing insurers to relitigate administrative eligibility decisions in federal court and seek damages for disputes that arbitrators have already accepted into the federal process. This elevates an administrative error into reputational and legal risk that no physician practice could withstand.

The NSA’s public policy goal of removing patients from billing disputes, was buttressed by leveling the playing field between physician practices and insurance behemoths. The sweeping effects of this case will fundamentally alter the scales in favor of insurers and not just chill, but shut out doctors from obtaining fair reimbursement.

Shifting the balance of power

This situation should alarm policymakers as well as doctors and their patients. It embodies the risk of extended, multi-faceted litigation initiated by trillion-dollar insurance conglomerates targeting individual physicians, small practices, and safety-net hospitals that do not possess equivalent resources.

This pressure does not safeguard patients. Instead, it discourages providers from contesting underpayment, shifts the balance of power firmly back to insurers, and dissuades the use of the very system intended to resolve disputes and protect patients. In the meantime, insurers leverage extensive financial resources to maintain coordinated litigation efforts while depicting providers, especially those offering emergency care, as wrongdoers for employing the only legal remedy available.

Ultimately, these legal actions are not aimed at preventing misconduct. Instead, they focus on altering market structure. By transforming the routine application of IDR into a significant litigation risk, insurers are indicating that independent providers who challenge payment terms will face penalties instead of negotiations.

The foreseeable outcome is the consolidation of providers: small practices, emergency physician groups, and safety-net hospitals will be compelled to sell, affiliate, or close rather than endure the costs and uncertainties associated with defending against repeated federal lawsuits. As we’ve reported, Optum now employs more than 90,000 clinicians. Simultaneously, this approach accelerates the vertical integration of insurers, directing care toward entities that are either owned or aligned with insurers, which are shielded from payment disputes and arbitration. Within this context, the courts do not serve as a venue for resolving conflicts; they function as a mechanism for enforcing market discipline. This undermines the fundamental objective of the No Surprises Act to balance bargaining power and, in turn, reinforces insurer dominance over pricing, networks, and access to care.

A law meant to protect patients and equalize bargaining power is being weaponized by insurers to suppress those who question insurer payment practices and, in doing so, to silence the underdog.