Taking on Goliath: Brain surgeon's clash with UnitedHealthcare shows insurer's hardball tactics

Dr. Catherine Mazzola, a pediatric neurosurgeon, runs a signifier successful New Jersey that treats low-income children connected Medicaid. Since 2008, she has cared for boys and girls with cerebral palsy, spina bifida and different neurological disorders. 

But now, her signifier is successful superior jeopardy, she says, due to the fact that of caller moves by the security and wellness attraction elephantine UnitedHealth Group.

The communicative begins successful February 2024, erstwhile a portion of UnitedHealth experienced a massive hack. The unit, Change Healthcare, shuttered its systems and halted each reimbursements owed to hospitals and doctors similar Mazzola. 

To assistance providers enactment afloat, Optum, another UnitedHealth subsidiary that includes a bank, began offering "temporary," no-interest loans. Mazzola's signifier was among those tapping into the programme — it received $535,000, documents show.

The practice began repaying the loans, but successful January Optum demanded that it repay the wealth successful full and within five concern days.

"Our signifier is doing the BEST we can," Mazzola wrote in an email to Optum connected Jan. 20. "Please inquire the indebtedness postulation radical to STOP. We are already successful repayment astatine the maximum imaginable magnitude monthly."

The concern soon got worse. In mid-February, she stopped receiving reimbursements from UnitedHealthcare. By April, her signifier was retired $78,000, her accountant's records show, and was struggling to marque payroll. 

Mazzola dug into the UnitedHealthcare claims and was shocked to find the insurer had drawn up reimbursement checks payable to her signifier and past deposited those checks into its ain slope account, records shared with NBC News show.

"They are trying to bankrupt our practice," Mazzola said. "Now, we're going to bash encephalon country and alternatively of paying us, they're going to instrumentality the wealth themselves." 

Bryan Fisher, a spokesperson for UnitedHealth Group, the conglomerate that owns the insurer, declined to remark connected its actions related to Mazzola's practice, New Jersey Pediatric Neuroscience Institute.  

Her lawsuit sheds airy connected thing fewer patients cognize about: the behind-the-scenes battles doctors accidental they indispensable wage with insurers implicit reimbursements and the progressively assertive tactics taken by immense payers similar UnitedHealthcare. 

Her acquisition besides gives credence, antitrust experts say, to concerns that UnitedHealth Group's acquisitions of an array of wellness attraction operations successful caller years person fixed it excessively overmuch powerfulness implicit patients and the doctors treating them.

"You've got physicians looking retired for hundreds and thousands of families, and you've got this large firm entity exerting arsenic overmuch fiscal powerfulness arsenic it can, conscionable due to the fact that it can," said Josh Bengal, unit counsel astatine the Medical Society of New Jersey. "It's upsetting."

The hack successful February 2024 affected 190 cardinal patients, making it the largest ever involving aesculapian data. UnitedHealth Group ultimately paid a $22 cardinal ransom to the cybercriminals.

After the intermission successful reimbursements, galore providers took retired loans done Optum — implicit $9 cardinal was borrowed, according to institution filings. 

Repayment presumption connected the loans were vague, with Mazzola's declaration noting lone that her signifier would person to repay the indebtedness wrong 30 concern days of receiving announcement from UnitedHealth Group. 

But Mazzola and different doctors said they were assured by the legislature grounds of Andrew Witty, UnitedHealth Group's erstwhile main executive, who said successful May 2024 that the institution would question repayment lone erstwhile borrowers' businesses were backmost to normal.

Even though Change Healthcare said it restarted claims processing astir a period aft the breach, doctors who spoke with NBC News said their operations continued to conflict agelong after, with immoderate saying they are retired millions arsenic a result. Others were forced to close after being crippled by the nonaccomplishment of income. 

When Optum began demanding repayment of loans successful January, it gave borrowers 5 concern days, according to letters reviewed by NBC News. Those who didn't conscionable the demands could person their UnitedHealthcare reimbursements withheld arsenic repayment, the letters say.

Mazzola's practice had promised to taxable $10,000 a period until her $535,000 indebtedness was repaid. It was each she could afford, she told Optum successful emails reviewed by NBC News. 

Mazzola said an Optum enforcement told her by telephone that her repayments weren't enough. And successful mid-February, UnitedHealthcare began intercepting reimbursements owed to Mazzola's practice "to repay amounts owed nether your statement with Change Healthcare Operations LLC," documents show.  

Upon further investigation, Mazzola learned the puzzling mode UnitedHealthcare diverted the wealth — drafting up checks payable to Mazzola's signifier and past depositing them into a UnitedHealthcare slope account, the documents show.

"How tin United Healthcare claw backmost wealth that we are owed for surgeries and bureau visits?" Mazzola wrote to an Optum enforcement she had been dealing with. 

She received nary response, but successful April the institution stopped seizing reimbursements from her signifier aft she complained to the American Medical Association.

It waded into the fight on April 11, when Dr. James Madara, the AMA's main executive, wrote to Roger Connor, the main enforcement of Optum Insight, asking that the institution halt its outgo demands. 

"Physician practices are inactive suffering terrible fiscal distress arsenic a effect of the cyberattack astir 14 months aft the breach was archetypal discovered," Madara wrote. "We privation Optum to grant its committedness to hold to retrieve repayment for immoderate loans until the doc determines that it is the due time, due to the fact that the physicians person relied connected Optum's statements." 

In a statement, Optum said it is moving with providers "to place flexible repayment plans based connected the idiosyncratic circumstances of providers and their practices."

"We person besides worked with UnitedHealthcare to guarantee the claims it receives are reviewed successful airy of the challenges providers experienced, including waiving timely filing requirements for the plans nether its control," it added.

Multiple lawyers interviewed by NBC News reviewed the indebtedness statement Mazzola's signifier signed and characterized it arsenic a declaration of adhesion — successful which 1 enactment calls the shots and the different has small prime but to agree. The fiscal ruin Mazzola and different doctors faced due to the fact that of the hack, an lawsuit caused by inadequate information astatine Change Healthcare, made the loans adjacent much one-sided, immoderate lawyers said. As a result, doctors whitethorn person ineligible recourse aft the assertive actions UnitedHealth Group took to extract indebtedness repayments. 

The cardinal question surrounding UnitedHealth Group's reimbursement actions is "whether they abused their usage of this remedy by insisting connected repayment earlier it was due for them to bash truthful fixed the damages that they caused," Daniel Schwarcz, a prof astatine the University of Minnesota instrumentality school, said successful an email. 

Amid its clashes with doctors, UnitedHealth Group announced net of $9 billion from operations successful the archetypal 4th of 2025, a 15% leap from the aforesaid play past year. Revenue for the 3 months was $110 billion.

Even aft Change Healthcare restarted claims processing, doctors who spoke with NBC News said they were ne'er reimbursed for galore claims due to the fact that the disruption meant they couldn't taxable them wrong insurers' required clip periods. The doctors besides said their costs accrued aft the hack due to the fact that they had to wage unit members to pursuit reimbursements.

Mazzola, who estimates that her signifier mislaid $1 cardinal due to the fact that of the hack, has asked Optum to reimburse her for costs her signifier incurred arsenic a effect of the breach. But the presumption Optum offered would person barred her from being capable to writer it due to the fact that of the hack. So she declined to judge it.

"I truly believed that Optum, who was orchestrating these loans, would springiness physicians and doc groups a tenable magnitude of clip to repay the loans with the knowing that this fiscal situation astir bankrupted us," Mazzola said. "I mean literally, you're talking astir $0 successful your slope account, and you person 70 employees to pay." 

Doctors accidental they weren't the lone ones wounded by the hack. Patients, too, were harmed erstwhile providers didn't person the reimbursement gross needed to bargain medicine, for example.

"There were a batch of delays of diligent attraction arsenic a effect of it," said Dr. Pruvi Parikh, an allergist and immunologist successful New York City who is aesculapian manager of a signifier with six locations successful New York and 15 successful New Jersey.

Parikh's radical borrowed $400,000 from Optum to past the hack. By the extremity of 2024, it had repaid each but $102,000 of it, documents show.

On Jan. 7, Optum threatened to withhold reimbursements to Parikh's signifier if the remainder of the indebtedness wasn't repaid successful days, an email shows. 

"Coming up with that magnitude of wealth successful 5 concern days is not imaginable for the bulk of backstage practices," Parikh said successful an interview. "Not lone did they not springiness america clip to get backmost connected our feet, they were like, 'Pay it now.'"

While the signifier met Optum's demand, she estimated it is retired $2 cardinal due to the fact that of the hack.

In a statement, Change Healthcare said it started clawing backmost backing it had provided "more than 1 twelvemonth station the lawsuit and with services restored." The institution said it is reaching retired to those "that person not been responsive to erstwhile calls oregon email requests for much information."

The main crushed doctors similar Parikh and Mazzola are successful this crucible, antitrust experts and physicians say, is that UnitedHealth Group operates truthful galore cogs successful the nation's wellness attraction machinery. By acquiring an array of wellness attraction operations successful caller years—including doc practices and pharmacy benefits management, technology, claims processing and fiscal services — UnitedHealth Group tin exert marketplace musculus implicit weaker participants similar doctors and patients. 

Federal antitrust lawyers acrophobic astir imaginable monopolistic activities person sued wellness attraction companies successful caller years. In 2022, 2 years earlier the Change Healthcare hack, the Justice Department and the states of New York and Minnesota sued to halt UnitedHealth Group's acquisition of the claims processor, saying it would trim contention successful wellness attraction security markets. 

Because Change Healthcare dominates the claims clearinghouse business, the authorities argued, its acquisition by UnitedHealth Group would springiness the conglomerate accusation astir however rivals' security plans work, a competitory advantage. 

UnitedHealth disagreed, saying it had beardown "firewalls" betwixt units that would forestall delicate information from being shared passim the company. Optum, the subsidiary that present houses Change Healthcare, would support outer customers' information from being shared with UnitedHealthcare oregon its affiliates if the woody went through, the institution said.

That statement seemed to transportation the national justice proceeding the lawsuit successful Washington, D.C., a Trump appointee. In his October 2022 determination greenlighting the $13 cardinal Change acquisition, U.S. District Judge Carl J. Nichols cited the company's data-sharing firewalls as weighing "strongly against the government's position." 

Now, doctors accidental UnitedHealthcare's diverting reimbursements to repay Optum loans shows the benignant of data-sharing the authorities was acrophobic about.

Hayden Rooke-Ley is elder chap for wellness attraction astatine the American Economic Liberties Project, a nonprofit, nonpartisan enactment that works to curb monopolies. He said UnitedHealth Group's seizure of doctors' reimbursements is an illustration of what happens erstwhile a institution coordinates among its antithetic subsidiaries for its ain purposes.

"These are the sorts of conflicts of involvement we interest astir erstwhile an security institution besides owns the outgo pipes and a bank," Rooke-Ley said successful an interview.

Asked to respond to the criticism, Fisher of UnitedHealth Group declined. 

When it added Change Healthcare to its operations successful precocious 2022, Optum said the combined companies would "benefit the full wellness system, resulting successful little costs and a amended acquisition for each stakeholders." 

Parikh, the New York City allergist and immunologist, begs to differ. 

"It was a implicit disaster, and to this time it's not corrected," she said of the hack. "But determination hasn't been immoderate accountability to this goliath Optum."