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Optum Faces Allegations of Anti-Competitive Practices from CA Health System
Emanate Health alleged that Optum engaged in anti-competitive practices and tried to monopolize the primary care physician market the two organizations share.
California-based health system Emanate Health has filed a lawsuit alleging that UnitedHealth Group’s Optum violated antitrust laws and engaged in anti-competitive practices regarding physician contracts.
Emanate Health provides care in the San Gabriel Valley through its three hospitals: InterCommunity, Queen of the Valley, and Foothill Presbyterian. The health system also delivers home healthcare services and manages 16 ambulatory sites throughout the region that provide primary and specialty care.
Optum, a healthcare services provider, is the largest employer of physicians in the United States, with over 70,000 directly employed or affiliated physicians across 2,200 primary and specialty care offices.
In 2017, OptumCare Management acquired the medical practice formerly known as Magan Medical Clinic. After the acquisition, the practice was rebranded as Optum-Covina. According to Emanate Health’s lawsuit, in and after December 2022, Optum-Covina physicians left the practice to join Emanate Health Medical Group (EHMG).
After these providers left, most of whom were primary care physicians, Optum transferred their patients to other Optum physicians without informing them of their original providers’ departure or asking the patients whom they wanted to be their provider.
According to the lawsuit, Optum deliberately failed to notify patients that their providers were leaving and intentionally scheduled follow-up visits to occur after the providers had already left so the providers could not inform their patients of their exits to EHMG.
Corporate officials at Optum allegedly directed their physicians, medical assistants, and other administrative staff at Optum-Covina to refrain from telling patients that their physicians had left Optum and relocated to EHMG. In some instances, staff falsely told these patients that their physicians had retired or were on vacation.
“Emanate Health, Emanate Health Medical Group (EHMG), and Emanate Health Independent Physicians Association (EHIPA) have taken joint legal action to protect the rights of our respective patients, physicians, and employees,” the health system said in a statement emailed to RevCycleIntelligence.
“Good faith efforts to resolve these issues with Optum have been rebuffed or met with retaliation. We continue to focus our efforts on helping people keep well in body, mind, and spirit by providing quality health care services in a safe, compassionate environment.”
The lawsuit also states that Optum began a pattern of anti-competitive practices around December 2021 to monopolize that primary care physician market in locations where Emanate Health patients live.
Optum allegedly threatened to cancel its hospital service agreement contracts with Foothill Presbyterian and Queen of the Valley unless Emanate Health agreed to new anti-competitive terms to allow Optum to have market dominance over primary care physicians in the area. Optum executives purportedly told Emanate Health executives not to encroach on physician matters or vie for physicians in competition with Optum.
Optum’s proposed contract terms requested that Emanate Health primary care physicians be exclusive to Optum for Medicare Advantage and commercial health maintenance organization (HMO) products. In addition, Optum asked that Emanate Health not try to solicit any current Optum-affiliated physicians.
After Emanate Health refused to agree to the terms, Optum terminated its contracts with the health system’s hospitals, according to the lawsuit.
Furthermore, after terminating the hospital service agreements, Emanate Health said Optum began steering its Medicare Advantage HMO and commercial HMO members away from Emanate Health facilities to geographically remote facilities. As a result, monthly admissions of Optum Medicare Advantage HMO and commercial HMO members at Emanate Health’s hospitals have declined.
“These are baseless assertions related to a contractual dispute in a highly competitive market, and we will defend ourselves vigorously,” an Optum spokesperson said in a statement emailed to RevCycleIntelligence.
