POP Act

Bill Summary: Patients Over Profit (POP) Act (H.R. 5433)

Overview

The Patients Over Profit (POP) Act is a legislative proposal designed to prevent "vertical integration" within the healthcare industry—specifically, the practice of a single entity owning both a health insurance provider and the healthcare providers (doctors/clinics) that deliver the care. The primary intent of the bill is to eliminate potential conflicts of interest where insurance companies might prioritize profit over patient care by controlling the providers.

Key Provisions

1. Prohibition of Common Ownership

The bill makes it unlawful for any person or entity to simultaneously own, operate, or control both:
* A Health Insurance Issuer
* An "Applicable Provider" (or a Management Services Organization that supports such a provider).

2. Mandatory Divestment

Entities currently in violation of this rule must sell off (divest) one of the two arms of their business:
* Existing Assets: Assets acquired on or before the date of enactment must be divested within 2 years.
* New Assets: Assets acquired after the date of enactment must be divested within 1 year of acquisition.

3. Enforcement and Penalties

The bill grants significant enforcement power to the FTC, the DOJ (Antitrust Division), the HHS Inspector General, and State Attorneys General.
* Civil Actions: Authorities can sue to force divestiture and a "cease and desist" order.
* Disgorgement of Revenue: Violators may be required to give up (disgorge) all revenue earned from health care services during the period of the violation.
* Community Redress: Disgorged funds will be managed by the FTC and distributed to serve the health care needs of the harmed communities.

4. Medicare Advantage and Part D Integration

The bill specifically amends the Social Security Act to ensure compliance within Medicare:
* Contract Restrictions: Starting January 1, 2026, the Secretary of HHS may not contract with or pay Medicare Advantage organizations that violate these ownership rules.
* Certification: MA organizations must certify their compliance.
* Fraud Penalties: Any claim for payment submitted by an entity in violation of these rules is legally classified as a false or fraudulent claim.

Who is Affected?

Affected Entities

• Insurance Companies: Large insurers that have acquired physician groups or medical clinics.
• Medical Groups/MSOs: Management services organizations and providers that are owned by insurance conglomerates.
• Medicare Advantage Organizations: Entities managing Medicare Part C and Part D plans.

Exclusions (Who is NOT affected)

The bill explicitly excludes certain providers from the definition of "applicable provider," meaning they can still be owned by insurance issuers:
* Hospitals (including critical access and rural emergency hospitals).
* Pharmacies.
* Suppliers of durable medical equipment, prosthetics, and orthotics.

Procedural Timeline & Impact

• Timeline: For Medicare Advantage plans, the prohibition takes effect for plan years beginning January 1, 2026.
• Regulatory Oversight: The FTC is tasked with creating the rules to implement this Act and reviewing the impact of all forced divestitures on market competition and public interest.
• Legal Status: The bill has been referred to the Committees on the Judiciary, Energy and Commerce, and Ways and Means for further consideration.