Rojas actual,

There is a war on right now over the 340B rebate model. HRSA wants manufacturers to hold the discount and pay it back later.

The hospital lobby wants to keep taking it upfront.
A bipartisan Senate bill wants to lock the upfront model in place.

Watch the three of them argue, and you’ll notice the same thing I did: not one of them will tell you who the money is for.

That silence is the whole story.

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Rojas Actual.

Steven Spivey died on January 23, 2007, after spinal surgery at a physician-owned hospital in Abilene, Texas.

A federal contractor approved that hospital’s Medicare enrollment against written instructions from CMS.

CMS learned of it in February 2007. A patient was already dead.

Medicare had paid the hospital $4,193,702.

Then a man died, and Congress went looking for a law to change.

IN TODAY’S ARTICLE:

• What the record establishes about the death in Abilene, and what nineteen years of citation has never established

• The Medicare contractor that enrolled the hospital against CMS instructions, and the $4,193,702 that followed

• The eight conditions of participation the hospital failed, and which three actually closed it

• Why a second identical case in Oregon matters more than the one everybody quotes

Glossary at the bottom of today’s article.

WHAT HAPPENED IN ABILENE

Steven Spivey of Gorman, Texas, went into West Texas Hospital in Abilene for spinal surgery after a truck accident. He was 44 and had three children. The facility held fourteen beds. The surgery went as expected. That night he began to choke.

His wife Tracy was in the room. She told CNN in 2007 that staff read it as a panic attack, that his last words were that he was in trouble, and that she performed CPR herself for roughly fifteen minutes while asking someone to get a doctor. She said she checked three places for a pulse and found none.

By her account, the surgeon arrived about two hours after the choking started and called for 911. Paramedics transported Spivey to Abilene Regional Medical Center, a full-service community hospital. He was pronounced dead there.

West Texas Hospital had no dedicated emergency department. It remained bound by the Emergency Services condition of participation at 42 CFR 482.55, which applies to every Medicare hospital, whether or not it operates an emergency department.

The date was January 23, 2007.

Almost every retelling of this story since has moved through Christopher Lee’s Washington Post piece of January 10, 2008, which ran the day the Inspector General released its report and referred to the case in the past tense. That publication date is what puts 2008 in readers’ minds. Reed Abelson had already reported the case for the New York Times on April 2, 2007, roughly ten weeks after it happened.

The death was January 23, 2007, and what happened around it that year is the part that never gets told.

WHAT THE RECORD ESTABLISHES

Set down clearly what is proven and what is not.

Proven: a patient went into respiratory arrest hours after elective spinal surgery, the hospital called 911, and the patient was transferred to a community hospital and died there. Senators Baucus and Grassley and Representative Stark put those facts in writing to CMS on February 8, 2007.

Not proven: that the delay caused the death. No agency finding says it. No court judgment says it. The family retained attorney Darrell Keith and told CNN in June 2007 that they would file the following week. Local reporting confirms a wrongful death suit was filed. No docket number or disposition is accessible through open sources, so nothing about that case belongs in this argument. Wendell Primus wrote in July 2026 that the delay may have cost Spivey his life, and the qualifier is doing real work.

The vivid details, the fifteen minutes of CPR and the two-hour gap, come from one televised interview with the widow, given while she prepared litigation. That is not a criticism of Tracy Spivey. It is what the evidentiary record is, and a federal statute has rested on it for sixteen years.

THE CONTRACTOR WAS TOLD TO STOP

In December 2003, Congress imposed an eighteen-month moratorium on Medicare payments to new physician-owned specialty hospitals. The statute reached payment. Enrollment was left alone.

West Texas Hospital was granted its Medicare provider number on May 20, 2005, nineteen days before that moratorium expired. Baucus, Grassley and Stark flagged the date on February 8, 2007, and in the same letter recorded the agency’s answer: it was CMS’s position that granting a provider number during the moratorium was acceptable. What CMS said was subject to review and possible recovery was any payment made inside that window. The three members asked CMS to identify which payments those were.

The statutory moratorium expired June 8, 2005. CMS then began an administrative suspension on enrollment of new facilities that ran through August 2006, and Congress reinforced it in the Deficit Reduction Act of 2005, barring CMS from approving new specialty hospitals until the agency delivered its Strategic and Implementing Plan.

On February 26, 2007, CMS staff briefed committee staff. TrailBlazer Health Enterprises, the fiscal intermediary for Texas, had approved West Texas Hospital’s Medicare enrollment application despite CMS instructions to suspend processing applications from hospitals meeting the federal definition of a physician-owned specialty hospital. A provider agreement was issued despite the suspension. Medicare paid the facility $4,193,702.

Baucus, Grassley and Stark wrote to CMS Acting Administrator Leslie Norwalk on March 6, 2007, demanding to know what CMS had done about the contractor, whether TrailBlazer had been sanctioned, and how CMS oversees contractors generally. They framed it as a question about delegation, noting that CMS relies on contractors to enroll hospitals and to process and pay over $300 billion in claims annually, and that the scale of that authority makes accountability reasonable to expect when instructions go unfollowed. On the sanctions question they wrote that the briefing had left them unable to tell.

Four weeks separate the two letters. On February 8 the violation is a provider number issued during a statutory payment moratorium. On March 6 it is an enrollment approved against an administrative suspension. Same three signatures, same hospital.

A federal contractor put that hospital inside the Medicare program in violation of the government’s own instruction. Nineteen years later, the hospital is the argument for restricting who may own one.

IT CARRIED A SEAL OF APPROVAL

The Joint Commission accredited West Texas Hospital in May 2005.

Under the Social Security Act, Joint Commission accreditation can give a hospital deemed status under Medicare’s conditions of participation, so it ordinarily does not undergo the same initial state agency certification survey. CMS retains validation, complaint, and enforcement authority. The Inspector General noted in January 2008 that 42 percent of physician-owned specialty hospitals held that kind of accreditation.

On March 6, 2007, the same three members of Congress wrote to Joint Commission president Dennis O’Leary. They asked how the accreditation was granted, what reviews followed, how the Commission learned of the January 23 death, and what the accreditation status was now. Stark, in the accompanying statement, named the Joint Commission as partly responsible for the breakdown and for the death, and pointed to its accreditation of Redding Medical Center.

Grassley asked why a hospital that far out of compliance had been given a seal of approval less than two years earlier.

Hold that question. It comes back at the end of this series.

The Senate Finance record on this hospital sat in public view for nineteen years. Nobody reads it. Paid subscribers get the primary documents, the statutory analysis, and every article in this ten-part investigation.

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Nothing about that gap is accidental. Six mechanisms produce it. Learn them once, and every article here reads differently, including the ones you have already read.

I am Dutch Rojas. Twenty-seven years on the supply and demand side of healthcare. I developed real estate such as ASCs and profesional office buildings, I founded three direct contracting companies, speak around the world on behalf of patients, and have, most recently, deployed capital towards a medical malpractice carrier and a health plan for independent physicians. I sit on the board of Physician-Led Healthcare for America, uncompensated.

ONE: TAX EXEMPTION

The largest hospital systems in America pay no federal income tax, no state income tax, and in most places no property tax. In exchange, they provide community benefit.

They define community benefit themselves.

The IRS deleted the requirement to provide free care in 1969. The tax break survived. What replaced it is a category the hospital fills, measures, and reports on its own Form 990. Free care sits in that bucket next to the gap between what Medicaid paid and what the hospital says its costs were.

Yale New Haven spent 0.69 percent of its expenses on charity care and ended the year with $606 million in cash.

Read: When Did Charity Care Become a Business Strategy · The 25 Most Powerful Nonprofit Health Systems.

TWO: THE BUILDING DECIDES THE PRICE

The same MRI collects two thousand dollars inside a hospital outpatient department and three hundred dollars in the office across the street. Same scan. Same radiologist, sometimes.

The difference is the facility fee, a second charge a hospital collects because the service happened under its roof.

That differential is why hospitals buy practices. Acquisition converts an office into a hospital outpatient department, and the same work starts collecting more the day the sign changes. A remarkable amount of healthcare consolidation is downstream of this one number.

Read: Medicare’s Delayed Approval for Outpatient Joint Replacements

THREE: THE OWNERSHIP CEILING

Federal law caps physician ownership of hospitals at whatever percentage existed on March 23, 2010. Not a ban. A ceiling, frozen on a date.

A physician-owned hospital cannot add beds, add operating rooms, or increase physician ownership above that line. A corporation can buy every surgery center in the state.

The Federation of American Hospitals, the investor-owned hospital lobby, put that provision in the Affordable Care Act. Its president said so on the record in 2021.

Read: Physician-Owned Hospitals · The Paradox of Physician-Owned Hospitals.

FOUR: THE CARRIER SITS BETWEEN YOU AND THE MONEY

You do the work. A carrier decides whether the work gets paid, how much, and when.

Prior authorization, network design, and denial are the instruments. The premium dollar arrives at the carrier first and earns for the carrier while the claim gets adjudicated.

A practice paying $20.5 million in premiums over a decade holds zero equity in the entity that collected it.

Read: $20.5 Million in Premiums. $0 in Equity. · Kaiser: The Denial Comes From Inside the House

Then read the full prosecution of the largest version of this machine: The UnitedHealth Series.

FIVE: THE PRICE IS HIDDEN ON PURPOSE

LASIK posts its price. Since 1998, it became 107 percent more common and half as expensive in real terms, and it got better.

Hospital services went the other direction over the same decades in the same country. One variable differs.

Washington ordered hospitals to post prices starting January 1, 2021. Five years later, CMS had issued 27 fines. The maximum annual penalty equals about 28 minutes of CommonSpirit’s revenue.

Read: Healthcare Isn’t Expensive. It’s Unpriced. · Independence Does Not Cost 50% More

SIX: YOU NEED PERMISSION TO COMPETE

Certificate of need laws operate in 34 states plus DC. Before you build a facility, add beds, or buy a scanner, you file an application proving the community needs it.

The existing hospital gets to file an objection. Sometimes it gets to sit on the reviewing body.

In the states that hold the strongest version of this, a nonprofit system cannot merge without the Attorney General’s written approval. Eight states can block a deal outright. Forty-two get a courtesy notice and a chance to write an opinion while the merger closes.

Entry is a privilege granted by the people already inside.

Read: Certificate of Need Laws · Ohio Can Block Any Nonprofit Hospital Merger. There’s One $6.76 Billion Exception.

WHY THE SIX SURVIVE

Six mechanisms, and not one of them happened on its own.

The Federation of American Hospitals put Section 6001 in the Affordable Care Act. Its president said so on the record. Incumbents lobbied certificate of need into 34 states. Congress set the facility fee differential. The IRS wrote the community benefit standard the industry now grades itself against.

The hospital lobby spent $486 million while physician reimbursement fell for six straight years.

So the mechanisms are not the whole story. This is:

The PAC money funds the campaign. The campaign elects the legislator. The legislator writes the statute. The statute protects the incumbent. The incumbent funds the medical school. The medical school trains the next physician inside the employed model. He never considers ownership, so he never objects.

Most legislation dies of nothing at all. No vote, no veto. It waits in line, and the line closes. Learning to watch that is its own skill.

Read the field manual: How a Bill Really Dies · $486 Million in Lobbying. Six Straight Years of Cuts.

The six sit on that circuit. The circuit is what keeps rebuilding them. That is why healthcare is expensive.

WHAT ELSE IS HERE

Monday through Friday: the prosecution. Named actors, dated receipts.

Saturday: the operator’s manual. Captives, direct contracting, what your practice actually keeps, how the 30 to 45 day cancellation provision in your fully insured contract works.

Sunday: the long view.

Every article opens free. Paid subscribers get the 990 walk-throughs, the PAC trails, the state-by-state breakdowns, and the full archive.

You can learn how the machine works now, or keep finding out at contract renewal. One of those costs less.

100,000 readers a month. Physicians, healthcare executives, and lawmakers.

$300 a year, or $49.95 a month.

-Rojas out.

Subscribe now

I have asked more than twenty attorneys general a version of the same question. It is a simple one.

Does your office have authority to regulate nonprofits operating in your state?

It is not a trick. The answer is written down somewhere in every one of those states, and I wanted to hear them say it out loud, because what happens next in American healthcare depends on the answer.

Almost none of them liked being asked.

I have done the same thing with governors on certificate of need laws. Most of them had never heard the term. That part did not bother me. What I noticed was what came next. They gave me the five things this administration is working on. The speech. The one that has nothing to do with what I said and everything to do with getting through the next ninety seconds without conceding ground.

I have been doing this since 1997. I have taken what I believed to be true, put capital behind it, built companies around it, and tested whether the premiums actually came down. Sometimes they did. There was a stretch where I think we were among the first in the country to say no copay, no deductible, no coinsurance, no preauthorization, and people asked how we managed it. It was math. It was not clever, and it was not magic. It was math.

None of that ever made the questions land any better.

I spent a long time believing that was a problem with the rooms. Some of it was. But I have come to think there was something wrong with the way I understood the whole enterprise, and it took me most of this summer to find the word for it.

Here is what I was taught obedience means, and I suspect it is what you were taught too.

Obedience is execution.
Instructions come down.
You carry them out.

The measure of your obedience is the gap between what was asked and what you delivered.

Small gap, good servant.
Large gap, bad servant.

Questions during the process are noise at best and insubordination at worst.

This is not a stupid model. It is how you land aircraft. It is how you run a code in a hospital. It is how a rifle company moves. I lived inside it for years, and I do not regret a day of it.

The trouble is what it does to everything else. Under that model, there are exactly two kinds of people. Some men comply, and some men resist. There is no third category. And so a man who asks a hard question has to be sorted into one of the two bins, and he almost always gets sorted into the second one.

I have been sorted into the second bin my entire adult life.

The first crack in this for me came from the English, which surprised me.

Our word obey comes through Old French from the Latin obedire, built around hearing. The idea of listening was sitting inside the word before obedience became mostly synonymous with compliance.

Which brings me to the Hebrew.

The Hebrew word behind much of what we translate as obey is shama: to hear, to listen, to heed. Its most famous form is Shema, the first word of the prayer every Jewish child learns: Hear, O Israel.

In the Hebrew scriptures, hearing often carries response inside it. To hear is not merely to register sound. The hearing is supposed to move the hearer. Hearing that changes nothing is not much of a hearing at all.

So the opposite of obedience, in that frame, is not rebellion. It is deafness.

Abraham is the evidence.

In Genesis 18, the man haggles with God over Sodom like a merchant in a market. He starts at fifty righteous men and works God down. Forty-five. Forty. Thirty. Twenty. Ten. He says out loud that he is dust and ashes and then keeps pushing anyway.

God does not rebuke him once. Not one time. The text records no impatience at all.

Four chapters later, God asks Abraham for his son, and the man who negotiated over strangers says nothing. The text gives us one detail, and it is devastating in its plainness. Abraham rose early in the morning.

Under the execution model, those are two different men. One is compliant, and one is difficult, and the difficult one somehow got promoted.

Under the hearing model, they are one man. The arguing and the rising early come from the same place: proximity. He was close enough to know which moment was which. That is the whole trait. It only looks like two traits from a distance.

The most argumentative man in the book is also the most obedient man in the book. Those facts have never been in tension. I just had them filed wrong.

This is the place where a piece like this usually turns into flattery, so let me put the guard rail in now.

The tradition saw the problem coming a long time before I did. Pirkei Avot 5:17 draws a line between argument for the sake of heaven and argument that is not, and says the first kind endures while the second does not. The example given for the first is Hillel and Shammai, two schools that disagreed about nearly everything and preserved each other’s positions in the text anyway. The example given for the second is Korach and his company.

Korach’s complaint was not unreasonable on its face. He argued that the whole congregation was holy and asked why Moses and Aaron had lifted themselves above it. Read cold, it sounds like a fair procedural objection. The earth opened and swallowed him.

Same activity. Opposite posture. The sorting is done on motive, not volume.

Which is uncomfortable, because motive is the one thing you cannot see from outside. I cannot always tell whether the man arguing with me is Hillel or Korach. He cannot always tell that about me either. Abraham looked exactly like a haggler.

I have to hold both of those at once. My questions have been misread for thirty years. My questions have also sometimes deserved it.

I want to be honest about one more thing, because leaving it out would make this too clean.

Exodus 24:7 has Israel answer with four words that run the wrong direction for everything I have said. Na’aseh v’nishma. We will do, and we will hear. The doing is listed first. The Talmud treats that line as the high point of the nation’s merit rather than as blind compliance.

I do not have a tidy resolution for that. There is hearing that precedes action, and there is action that precedes hearing, and the tradition holds both without apology.

Any version of this argument that comes out perfectly smooth has sanded something off.

Now the part I would rather not write.

I get irritated when people ask me questions.

Someone comes into my replies and says he sees me commenting on healthcare all the time and wants to know what exactly I have done. Ninety percent of the time, I do not answer. The other ten percent, I say Great question and give the short version, and I keep it short because I do not want to sound like a man justifying himself.

That reason is true. It is also, some of the time, a way of not listening while looking composed.

Someone tells me single payer works everywhere else in the developed world. I feel the shutter come down. Someone opens with, “Have you ever thought about...” and something in my chest says, “Do you know who I am?”

I have spent thirty years being punished for asking questions and I still get irritated when people ask me questions.

Both of those sentences are mine. I am not going to build a bridge between them for you.

Here is what I finally saw, and it came the way these things usually come: late and sideways.

Abraham fought for strangers he would never meet and went silent with his own son. After the mountain, Genesis does something strange. Abraham comes down, and Isaac is not mentioned in the return. The next chapter opens with Sarah’s death, and an old interpretive tradition connects her death to hearing what happened.

Some read the silence as the summit of Abraham’s obedience. Others read it as the one time he failed to bargain. I find the unsettledness more useful than a verdict would be.

Because the distance is the tell. In his case and in mine.

I will fight the system for years. I will chase down attorneys general and governors and sit in rooms where I am not wanted, on behalf of people whose names I will never learn. And then one particular man asks me one clumsy question on a Sunday afternoon, and I go quiet, and I call it not wanting to be a justifier.

It is easier to fight for the abstraction than to hear the particular man in front of you. That is not a healthcare problem. It is not a temperament problem. It is the oldest failure in the book, and the book put it in the account of its greatest man so that none of us could pretend it belongs to lesser people.

I did not fix this by building a rule for myself.
I have tried that before, and it lasts about a week.

What changed this summer was smaller and slower.

I stopped assuming the man asking was an opponent. The single payer guy in my replies is upset at the same system I am upset at. He has landed somewhere I think is badly wrong, and he got there honestly, and he is asking clumsily because there is no elegant way to open a conversation with a stranger.

Which is exactly what I was doing in front of those governors.

I walked in with a real question and got read as a problem instead of a man trying to understand. I know precisely what that costs, from the inside, and I have been handing it out for years.

Most of the time, people are not testing me. They have their own curiosity and no graceful way to raise it. The clumsy question is a hand extended badly.

Obedience was never about executing instructions correctly. It was about staying close enough to hear. And the test does not start with God. It starts with whoever is standing in front of you with a question you find beneath you.

He who has ears to hear, let him hear.

The problem was never the ears.
It was whether we were listening.

-Rojas out

For two decades, Wall Street heard one pitch: own the insurer, the physicians, and the facilities, and the pieces hedge each other. UnitedHealth Group built the largest version of that machine ever assembled. In 2025, the machine failed its own stress test.

This series prosecuted the failure in five parts. Read them in order. Each article builds on the receipts of the one before it.

Article 1: America’s Largest Physician Platform Barely Employs Physicians

• Every headline says UnitedHealth employs 90,000 physicians. The payroll says closer to 9,000. The other 80,000 signed affiliation contracts, and those contracts are being renegotiated right now.

• Optum Health swung from $7.77 billion in operating profit to a $278 million loss in a single year. The affiliated physicians will fund the repair.

Read it: https://read.rojasreport.com/p/americas-largest-physician-platform

Article 2: Congress Banned Physician Ownership. Then the Payer Bought the Operating Rooms.

• Section 6001 froze physician-owned hospitals in 2010. Seven years later, UnitedHealth paid $2.3 billion for Surgical Care Affiliates and kept buying.

• SCA Health now runs roughly 370 surgery centers with 9,700 physicians. The payer that decides what surgery costs owns where surgery happens, and nobody in Washington called that a conflict.

Read it: https://read.rojasreport.com/p/congress-banned-physician-ownership

Article 3: Wall Street Bought a Hedge. It Was a Mirror.

• Vertical integration was sold as diversification. In 2025, UnitedHealthcare’s operating earnings fell 40 percent and Optum Health swung to a loss in the same year. Both sides of the hedge failed together because there was never a hedge.

• Roughly a quarter of UnitedHealth’s revenue is the company paying itself, and 44 percent of consolidated revenue comes from CMS. When Washington repriced Medicare Advantage through V28, every floor of the structure took the hit simultaneously.

Read it: https://read.rojasreport.com/p/wall-street-bought-a-hedge-it-was

Article 4: Fewer Members. Thinner Benefits. Lower Earnings. Wall Street Applauded.

• The recovery plan in plain terms: exit Medicare Advantage plans in 16 markets, project a one million member drop, send 600,000 notice letters, thin benefits, raise premiums, sort physician contracts.

• The stock rose on every announcement. The cost of the recovery transferred to people whose names appear nowhere in the release.

Read it: https://read.rojasreport.com/p/fewer-members-thinner-benefits-lower

Article 5: Forgiven Before the Verdict.

• July 24, 2025: UnitedHealth confirms it is complying with formal criminal and civil requests from the Department of Justice. July 2026: the stock has risen roughly 80 percent from its trough and the fiscal 2025 10-K discloses no resolution.

• One arm of the federal government supplies 44 percent of UnitedHealth’s revenue. Another arm is investigating how the company earned it. Wall Street watched both arms and bet that neither would move.

Read it: https://read.rojasreport.com/p/forgiven-before-the-verdict

Why This Series Matters to Independent Physicians

Independent physicians spent fifteen years being told they were the fragile model, that survival required joining an integrated platform. The largest integrated platform in American healthcare just failed its own stress test. The 12 percent of physicians who never integrated are the only ones whose economics Washington cannot reprice in a single rule.

The receipts are all here.
Five articles.
One company.
One verdict.

The forensic toolbox behind this series publishes separately as How to Read an Earnings Release, Module 1: the nine moves we ran on UnitedHealth’s own filings, taught on the receipts you just watched us use.

Your hospital’s CFO read this series the week it dropped. 100,000 physicians, healthcare executives, and lawmakers read The Rojas Report every month. The only question is whether you find out what they know before your contract renewal or after.

-Rojas out.

In January 2008, the federal government published an investigation into whether physician-owned specialty hospitals could manage medical emergencies.

It found real problems.

Then I read what the investigators recommended. Enforce the staffing and emergency-care rules already on the books. They did not recommend restricting physician ownership.

Two years later, Congress did.

IN TODAY’S ARTICLE:

• What the federal investigators actually found in 109 physician-owned specialty hospitals, and the four fixes they named

• The rule CMS had already written, covering every hospital in Medicare regardless of who owned it

• What Section 6001 did instead: a grandfather date, an ownership freeze, a capacity freeze, and a closed door

• Twelve articles, one question, and why a defense published five days ago makes it current again

Glossary at the bottom of today’s article.

WHERE THIS STARTS

I read the 2005 legislation first.
Then I read the federal investigation that followed it.

The government found real problems.
Congress solved a different one.

That gap is this series.

WHAT THE INVESTIGATORS FOUND

The Senate Finance Committee asked the HHS Office of Inspector General to evaluate patient care and safety in physician-owned specialty hospitals. Inspector General Daniel Levinson published the result in January 2008 as OEI-02-06-00310.

The investigators worked from 109 hospitals, reviewed staffing schedules, read written emergency policies, and interviewed an administrator at every one.

They found gaps. Hospitals relying on a 911 call to obtain medical assistance in stabilizing a patient, which CMS had already said violates the conditions of participation. Written emergency policies missing the appraisal of emergencies, initial treatment, or referral and transfer. Policies that never mentioned a defibrillator. Staffing schedules that failed the nurse and physician requirements on sampled days.

Those are real findings.
This series will not pretend otherwise.

Then read the recommendations.
There are four, all directed at CMS.

Track these hospitals. Enforce the existing staffing conditions requiring a registered nurse on duty around the clock and a physician on call when none is onsite. Make certain hospitals can appraise and initially treat emergencies rather than leaning on 911 to do it. Require the missing content in written emergency policies.

The Inspector General added a note that some of those recommendations apply to all hospitals, not only to the ones physicians own. CMS concurred with all four.

No recommendation restricted physician ownership. No recommendation limited beds, operating rooms, or equity percentages. The investigators who found the safety problem named the safety fix.

THE CASE, TAKEN SERIOUSLY

The argument against physician-owned hospitals did not rest on that report alone, and it deserves a fair statement.

Critics said physician ownership creates an incentive to route profitable, healthier, better-insured patients toward facilities the referring physician owns. That patient mix, they argued, leaves community hospitals carrying Medicaid, dual-eligible, uninsured, and complex cases without the elective margins that fund them. They pointed to specialty facilities that operate limited service lines and carry limited emergency capability while calling themselves hospitals, and to patients who cannot tell the difference in an emergency. The diversion, on their account, threatens full-service and rural hospitals, and through them, community access.

Every one of those claims deserves testing. Some hold up. A safety problem can be real while an ownership restriction remains the wrong instrument for fixing it, and this series takes both halves of that seriously. Physician ownership creates an obvious financial incentive. So does hospital employment, and both get examined here under one standard. A community hospital carries obligations worth funding. That does not give it a legal claim to every profitable procedure in its market.

Write down what each allegation describes. Conduct. Capability. Incentives. Patient mix. Utilization. Outcomes.

Hold that list.

The statute and the Inspector General report have been public for eighteen years. Almost nobody reads them next to each other. This is where that gets done, twelve articles running.

THE RULE THAT ALREADY EXISTED

Here is the part that stopped me. Before the Inspector General published, CMS had already written the rule. Read 42 CFR 489.20(w).

A hospital gives written notice to every patient at the beginning of an inpatient stay, or an outpatient visit for observation, surgery, or any procedure requiring anesthesia, when no doctor of medicine or osteopathy is present 24 hours a day, 7 days a week.

The notice states that fact and explains how the hospital will meet the needs of a patient who develops an emergency medical condition while no physician is there. Before admitting that patient, the hospital obtains a signed acknowledgment. Any dedicated emergency department in such a hospital posts the same notice where patients entering it will see.

Written disclosure.
Signed acknowledgment.
Emergency plan.
Posted notice.

Every hospital participating in Medicare. Any owner. Nonprofit, investor-owned, system-owned, physician-owned.

In March 2010, Congress wrote that requirement again. Section 6001 added a patient-safety paragraph to the Stark law requiring a hospital to disclose the absence of an around-the-clock physician before admission, to obtain a signed acknowledgment from the patient, and to maintain the capacity to assess, initially treat, and transfer patients to hospitals that can treat them.

That paragraph is a condition of the ownership exception. It reaches hospitals with physician owners. It reaches nobody else.

The provisions are not word for word. Section 6001 states the assessment, initial treatment, and transfer capacity as an express condition, where the CMS rule reaches capability through the conditions of participation. Both address the same question: what a patient learns, and signs, when no physician stays onsite.

Congress did not face a choice between regulating conduct and doing nothing. An ownership-neutral rule covering every hospital in Medicare was already on the books. Congress restated a version of it as a condition of who may hold the equity.

WHAT SECTION 6001 ACTUALLY DID

Section 6001 did not outlaw physician ownership.
It narrowed an exception.

Before 2010, the Stark law let a physician with an ownership interest in an entire hospital refer Medicare patients there. Section 6001 kept that exception open only for hospitals that held both physician ownership and a Medicare provider agreement on December 31, 2010.

Hospitals that made the date live under three permanent conditions.

Their licensed beds, operating rooms, and procedure rooms cannot exceed what they held on March 23, 2010.

The share of the hospital owned by physicians in the aggregate cannot exceed what it was on that same date.

And an expansion exception exists on paper, available once every two years, capped at double the 2010 baseline, limited to the main campus, restricted to hospitals meeting county population growth and Medicaid admission thresholds, and closed to administrative and judicial review.

Hospitals that missed the date lost the exception.
New entry effectively ended.

So the structure runs like this.
Existing facilities frozen.
New facilities shut out.
Expansion locked behind a narrow door with no appeal.

None of those conditions asks what a hospital did. None asks whether it staffed a nurse, kept a physician on call, wrote a complete emergency policy, or transferred a patient safely. A hospital’s compliance with emergency standards did not determine whether it qualified for the exception. Its ownership structure and operating dates did.

That is the mismatch.
Every allegation described conduct.
The statute turns on a date and a percentage

SIXTEEN YEARS LATER

On July 25, 2026, Wendell Primus published a defense of the restriction in MedPage Today. Brookings republished it two days later. Primus served as a senior health and budget adviser to Speaker Nancy Pelosi, and Brookings describes him as the lead House staffer in developing the Affordable Care Act.

His argument returns to the same categories of concern. Emergency readiness. Self-referral. Patient selection. Payer mix. Uncompensated care. The financial stability of full-service and rural hospitals.

He says so himself. Midway through the piece, Primus writes that the issue is not about ownership, and places the concern in the conflict created by self-referral and the effect of those referrals on a community’s access to care.

Every one of them describes conduct or consequence.
Self-referral is conduct.
Access is an outcome.
The law he defends still turns on ownership.

That is why this remains open sixteen years later.
The framing never changed.

Meanwhile, the economy underneath it did.

Physicians did not leave their financial relationships with hospitals. They became employees, affiliates, and joint venture partners. Health systems kept acquiring specialty and outpatient facilities, and kept promoting physician-led governance inside them as a feature.

The procedures remained.
The physicians remained.
The financial relationship changed form.

This series does not claim to know why.
It asks the question and follows the documents.

WHAT THE NEXT ELEVEN ARTICLES DO

One evidentiary burden each, in three movements.

We begin with the evidence. The death in Abilene. The Inspector General report in full, including its denominator, its missing comparison group, and what it does not prove.

Then the economics. Self-referral. Physician employment. Cross-subsidies and patient mix. The Ascension acquisition of AmSurg.

Then the politics. Who sought the restriction and what they said about securing it. Primus’s own role in the legislation. And sixteen years of outcomes graded against what supporters said the law would accomplish.

The Federation of American Hospitals represents investor-owned systems. The American Hospital Association represents the broader field, including nonprofits. Both wanted this provision. They are different organizations, and this series will keep them distinct.

The federal investigators found a safety problem and recommended safety enforcement. CMS already had a disclosure rule covering every Medicare-participating hospital. Congress enacted an ownership restriction.

That does not prove Congress acted improperly.

It raises a question nobody has answered: What harmful conduct could Congress regulate only by restricting physician ownership?

-Rojas out.

GLOSSARY

Stark law: The federal statute at 42 U.S.C. 1395nn barring a physician from referring Medicare patients for certain services to an entity the physician holds a financial interest in, unless an exception applies.

Whole-hospital exception: The Stark provision permitting physician owners to refer Medicare patients to a hospital, so long as the ownership interest covered the entire hospital rather than one department of it.

Section 6001: The Affordable Care Act provision that narrowed the whole-hospital and rural provider exceptions, effective March 23, 2010.

Conditions of participation: The federal health and safety standards at 42 CFR Part 482 that a hospital meets to participate in Medicare. Failing them can cost a hospital its Medicare agreement.

Office of Inspector General: The HHS watchdog that audits and evaluates federal health programs and publishes recommendations to agencies like CMS.

Grandfathering: Letting facilities that existed on a stated date keep operating under rules that no longer admit new entrants.

Specialty hospital: Under the Stark law, a hospital primarily or exclusively treating cardiac patients, orthopedic patients, or patients receiving surgery.

SOURCES

HHS Office of Inspector General. Physician-Owned Specialty Hospitals’ Ability to Manage Medical Emergencies. OEI-02-06-00310. Daniel R. Levinson, Inspector General. January 2008. Verified against the complete report, July 30, 2026.

42 U.S.C. § 1395nn, Limitation on certain physician referrals. Subsections (d)(3) and (i) as amended by Pub. L. 111-148 §§ 6001(a) and 10601(a), and Pub. L. 111-152 § 1106. Verified July 30, 2026.

Primus, Wendell. “Restrictions on Physician-Owned Hospitals are Justified.” MedPage Today, Perspectives / Second Opinions, July 25, 2026. Republished by the Brookings Institution, July 27, 2026.

42 CFR § 489.20(w), Basic commitments. Current text verified against the eCFR, August 8, 2026. The Inspector General cited this paragraph in January 2008, which establishes that the rule preceded the report. The paragraph then sat at (v) and was redesignated to (w) by a later amendment; older secondary sources still cite the earlier letter.

CMS. Memorandum to State Survey Agency Directors, Provision of Emergency Services: Important Requirements for Hospitals. S&C-07-19, April 26, 2007.

I go every year, not for the mountains, not for the coast, and not for an old girlfriend. I go for the regulatory climate, which is the only weather I have ever cared about.

This year I went because a man in Charlotte got a raise.

$25.8 million. Up forty-nine percent from the $17.3 million the year before. In 2017, his first full year running the place, he made $5.4 million. Call it a quintupling in seven years, at a system that pays no federal income tax, no state income tax, and no property tax.

That same year, the chief executive of the largest for-profit hospital company in America made $23.8 million.

Both words are load-bearing.

For-profit.
Nonprofit.

The larger number is on the second one.
People saw the headline and thought North Carolina rewarded one executive.

That is adorable.
North Carolina rewarded all of us.

Thank you for calling me public.

My favorite fact about Charlotte lives in the legal text, not the marketing.

The largest hospital system in the state operates as the Charlotte-Mecklenburg Hospital Authority. A hospital authority. A creature of state statute. A unit of local government wearing a brand name.

The statute supplied the description. I merely read it. That structure is also why the compensation shows up in a public filing at all. That structure buys four things at once.

The tax treatment of a charity. The borrowing cost of a municipality. The legal posture of a government body. The pricing power of a monopoly.

One entity. One market. One brand.

You call it a hospital.
I call it complete.

In 2024, that authority reported $12.6 billion in net operating revenue and $11.3 billion in net income. Some people call net income profit. I call it a record year, because it was one, and because the figure leaves out the Winston-Salem academic system and the Illinois and Wisconsin hospitals that joined in 2022 to build the parent company.

Third largest public health system in the country.
$35 billion in annual revenue.
160,000 employees. Public.

Walk down Tryon Street with me. Look up.
Please tell me which part of that skyline looks taxable to you.

Thank you for the map.

I can tell you where I am in this state without reading a road sign.
I look for cranes.

People see cranes and think growth.
Growth is what the crane says in the brochure.
I see a reimbursement signal.

A crane is a system that has run the arithmetic on what the same procedure collects under a hospital roof versus an office roof, and has concluded that the roof is the product.

So I drive.

Charlotte first, because Charlotte is the flagship, and a flagship is a building that bills at the flagship rate.

Winston-Salem, where medicine and the academy hold hands in public.

Durham, where the brand is older than the state’s insurance market.

Raleigh, which is not a medical city at all. Raleigh is where the rules that make the other three cities profitable get written, and I always slow down there, out of respect.

Four skylines. One business model. Every one of those towers is a thank-you note somebody else already wrote and forgot to sign.

Thank you for the one point eight billion.

Every year, the tax exemptions handed to nonprofit hospitals in this state are worth roughly $1.8 billion.

I did not apply for that. There is no form. It is a standing appropriation nobody votes on, renewed automatically, forever, by the simple act of nobody bringing it up.

In 2021, the Johns Hopkins Bloomberg School of Public Health ran the numbers with the State Health Plan and found that fewer than twenty-five hospitals in North Carolina spent more on charity care than the value of their own tax break.

Fewer than twenty-five.

A lesser operator panics when a study like that lands.
He hires a crisis firm.
He buys airtime.
He drafts a statement about the many forms community benefit can take.

I did none of it, because I read the last page first, and the last page is the only page that matters.

Nothing happened.
Five years later, nothing has happened.
The exemption renewed itself anyway.

Thank you for the empty chair.

I recommend this one to colleagues in other states the way you recommend a restaurant.

The state’s own analysis says it plainly. In North Carolina, there is no public enforcement of hospital charity care. No agency holds a nonprofit hospital to the bargain that justifies its exemption. Hospitals report community benefit to the Department of Health and Human Services, and the department receives the report, and the department cannot intervene.

It receives.
My gratitude here is specific.

I am not thanking any official for looking away.
Nobody in that building declined to do a job.
I am thanking the General Assembly for never creating the job.

You cannot accuse a referee of bad calls in a league that never hired one.

So I file. Every year. On time, complete, beautifully formatted, and read by no human being with the authority to disagree with a word of it.

Community benefit is whatever I write in the box.

Thank you for paying me to forgive.

Now we come to the reason I keep a photograph of this state in my office.

In August 2024, every eligible hospital in North Carolina, all ninety-nine of them, signed on to a medical debt relief program. By October 2025, more than $6.5 billion in medical debt had been erased for more than two and a half million North Carolinians.

$6.5 billion.
Two and a half million people.
First program of its kind in America.

Beautiful. Genuinely beautiful. I have the press clipping framed and hung behind my desk where visitors can see it. Sentiment had nothing to do with that decision. I frame load-bearing documents.

Now let me walk you through the paperwork. Slowly.

Start with the eligibility condition, in the state’s own language. Participating hospitals were required to relieve medical debt deemed uncollectable.

Uncollectable.

They wrote it down. In the program documents. In public. And two and a half million people read a headline about $6.5 billion in forgiveness without ever seeing the adjective that made the whole thing affordable.

Let me show you an uncollectable account.
Almost nobody outside my industry has seen one.

It is a name. Attached to an address three moves stale. Attached to a phone number that belongs to a stranger now. My staff has worked it, then worked by a vendor, then worked by a second vendor at a lower contingency, then sold in a bundle for pennies to somebody who bought it the way you buy scrap.

You know the hardest part of collecting a ten-year-old account?
Finding the patient.

You know the easiest part?
Forgiving it.

I have watched men build entire careers in revenue cycle chasing this paper. Good men. Disciplined men. Men who could recite the recovery curve from memory and knew exactly where on that curve a file stops being an asset and starts being a filing cabinet.

Year one, you collect. Year two, you collect less. Year three, the curve goes flat and stays flat and never comes back, and everyone in the room knows it, and the paper stays on the books anyway, because writing it off is an admission and holding it is merely optimism.

That is what $6.5 billion of forgiveness looked like on my side of the desk.
Optimism. Ten years of it. In a box. Now the other half of the trade.

Hospitals that adopted the debt policies became eligible for enhanced payments under the Healthcare Access and Stabilization Program. A state-directed payment, approved by Washington, that lifts Medicaid reimbursement for inpatient and outpatient hospital services toward the average commercial rate.

The average commercial rate! Medicaid, paid like a commercial plan. Enhanced payments estimated at $4 billion in the first year and projected higher in the second.

My chief financial officer cried in the conference room. The patients had nothing to do with it. He had spent nineteen years watching bad debt die on a spreadsheet.

Then he watched it convert.
Understand the trade. It is the finest of my career.
I released paper the state itself called uncollectable.
I received a rate.

Two and a half million people opened an envelope that told them their hospital had forgiven them.

Not one of those envelopes said who paid for it.

The former state treasurer, a Republican who spent eight years publishing reports that ruined perfectly good weeks of mine, called it a multibillion-dollar bailout for hospitals.

He said it on the record. He said it clearly. He said it while it was happening, which is the only time saying it would have mattered.

He was right, and it passed anyway, and that is the most North Carolina sentence I know.

Somewhere in this state there is a woman who cried at her kitchen table over that letter. I want to be honest with you, because this is a vacation and I am relaxed. I am glad she got it. Her life is better, and mine is not worse, and that is a rarer arrangement than you think.

I want you to notice which one of us was paid to be in that moment.

Thank you for the committee.

People outside this state assume Certificate of Need survives here because somebody voted for it.

Nobody votes for it.
That is the entire beauty of the arrangement.

In April 2025, the Senate passed Senate Bill 370, a full repeal of the Certificate of Need law. 31 - 17 on the recorded vote. A clean margin. Sponsors who meant it.

It cleared the Senate Health Care committee on a Wednesday and came out of Senate Rules with a favorable report on Thursday morning. Two committees. Two days.

In one of them, a senator who had spent years on a hospital board called the repeal long overdue. In his experience, he said, the process runs a minimum of two years and five hundred thousand dollars in legal fees. His own county took six years to get through it. Eight, counting the work-up before the clock started. Harnett County could not treat cancer until it finished.

On the twenty-eighth of April, the bill crossed to the House, passed first reading, and was referred to the Committee on Rules, Calendar, and Operations.

That is the last thing that has happened to it.
Four hundred sixty-six days ago.

No hearing.
No floor vote.
No obituary.
No villain.

A bill in a room.

The budget did give ground. This state went more than a thousand days without a full budget. When one finally arrived in July, it repealed Certificate of Need review for inpatient rehabilitation services and beds, effective the first of October.

Rehab. One service line. A thousand days of negotiation and the competitive barrier moved by exactly one category, delivered inside a $34 billion dollar spending bill where nobody has to defend it as policy or celebrate it as reform.

I sent appreciation for that one. A concession you choose is the cheapest thing you will ever buy.

Amateurs try to defeat legislation.
I have never defeated anything.
I have a calendar.

Thank you for the physician in New Bern.

There is an eye surgeon down east who has spent years trying to do cataract surgery in his own facility, at his own price, and who argues that the Certificate of Need law violates the state constitution.

One physician. One operating room. In 2024, the state Supreme Court observed that his allegations could render the Certificate of Need law unconstitutional in all of its applications, which is the strongest sentence any court has written on the subject, and the case is still climbing. It sits with the Court of Appeals now. It will climb further. It may well outlast the statute it is challenging.

That is the part outsiders never understand. The highest court in the state said the law might be entirely unconstitutional, and the law kept operating the whole time, and I kept building.

I want to be gracious about this man.
Gratitude is my whole religion.

He is correct about the economics.
His room costs less than my room.
Patients would pay less in his building.

I have never argued otherwise in private, and I have never conceded it in public. I just did both in the same sentence.

He has patients scheduled Monday. Payroll on the fifteenth. A lease. One career, and he is spending it in a courtroom.

I have lawyers on salary. A government affairs department. A foundation. A communications team. A hospital authority. A hundred sixty-two thousand employees.

And time.
He files motions. I wait.
Time is the asset.
Everything else is decoration.
He is welcome to keep trying.

Thank you for the word access.

Watch the tape from any year, any session, any bill.

The moment competition gets close, the word arrives. Access. Rural access. Access for the underserved. Access to emergency care in a county that cannot support a surgeon on volume alone.

The argument is that if a surgeon builds a center that does the profitable cases well, the hospital loses the margin it uses to fund the unprofitable ones, and the community loses the service.

It is a real argument. It is genuinely true in some rural counties, and the people making it there believe every word.

Which is exactly why I use it in Charlotte.

The most powerful thing you can say in a policy fight is a true sentence deployed in the wrong county.

Thank you for the universities.

I drive through Durham and Chapel Hill and Winston-Salem on this trip every year, and I want to explain what I am admiring, because it has nothing to do with medicine.

Every profession teaches its students where value comes from.

Surgeons learn anatomy.
Accountants learn depreciation.
Lawyers learn where the ambiguity lives in a sentence.
Hospital executives eventually learn something more useful than any of it.

Buildings bill differently than physicians.

Nobody teaches that. There is no course, no case study, no certification. It arrives around year four, usually in a contracting meeting, and once a person has seen it, they cannot unsee it, and every decision they make for the next thirty years is downstream of the moment they did.

These institutions do not produce that lesson. They produce the people who will receive it. And when reporters asked one of those academic systems what its chief executive earned, the figure did not arrive by the deadline.

Not a refusal.
Not a fight.
A deadline that passed.

There is a whole discipline in that.
I would endow a chair, except they already have one.

Thank you for the comparison.

The other executives in this state made $2.8 million, $2.3 million, $2 million, $1.9 million, and $1.7 million apiece.

Every one of those numbers ran next to mine, and every article framed it the same way. Look how much more he makes than the others. That framing was the best gift I received all year, and I want to explain why with some care.

It makes the argument about a man.

Once the conversation is about one executive’s pay, it is no longer about a hospital authority holding a metropolitan market. It is not about a repeal bill in a committee.

It is not about the $1.8 billion a year in exemptions and no agency assigned to check the work. It is not about ten years of dead receivables released in exchange for the average commercial rate.

It is about a line on a Form 990.
Be angry at the line.
The line is a person.
The person can retire.

The structure never retires.

The state line.

I stopped at the border on the way out, the way I always do. Got out of the car. Took off my hat, which I am aware is theatrical, and looked back at it.

Nonprofit systems worth billions.
Universities with public support and private appetites.

Competition that requires permission from an agency, then permission from a committee that never meets, then permission from an appellate court on a schedule measured in careers.

Executives paid like partners at a fund. Charity care nobody audits. Debt forgiveness the state paid for with paper it had already called uncollectable.

And everyone, on every side of it, still talking about affordability. Other states make me work for this. North Carolina hands it over on a schedule, in daylight, with a ribbon cutting and a photographer.

Some people leave souvenirs.
I leave market share.

Thank you.
I love North Carolina.

See you next quarter.

-Rojas out.

Rojas Actual.

The knee you did Tuesday is already in the file.

So is the one from March. So is every joint replacement your hospital has done since January 2024.

Medicare is using those cases to build the target price your hospital will be judged against starting in 2028. Every case you do between now and December still feeds that calculation.

CMS finalized the model yesterday.

Nobody called to tell you CMS started building your benchmark two and a half years ago.

IN TODAY’S ARTICLE:

• What Medicare is about to start measuring, explained with one patient.

• Whether this applies to your hospital.

• When your hospital can owe money, and the most your hospital can lose.

• What CMS said about physician ownership, and why that part outlives the payment model.

Glossary at the bottom of today’s article.

WHAT MEDICARE DOES WITH THE NUMBER

Here is what Medicare will do with the number it is building.

A 71-year-old woman comes to your hospital for a total knee. You do the case. She goes home on day two.

Today, Medicare mostly treats the surgery and the care afterward as separate bills. Your hospital gets paid for the admission. The rehab facility bills separately. The home health agency bills separately. Her follow-up visits bill separately.

Starting January 1, 2028, Medicare puts the surgery and the next 90 days into one financial episode.

Everything spent on that patient during those 90 days goes into one number. The rehab stay. The home health nurse. Physical therapy. Follow-up imaging. If she falls in week six and shows up in an emergency room, that visit counts. If she gets readmitted, the whole readmission counts.

One surgery.
One number.
Ninety days of consequences you mostly do not control.

HOW YOUR HOSPITAL WINS OR LOSES

The mechanism is simpler than it sounds.

Before the year starts, CMS sets a target price for a joint replacement episode.

Your hospital does its cases. Medicare adds up what actually got spent on each one across the full 90 days. After the year ends, CMS compares the two.

Come in below the target while meeting the quality requirements, and your hospital can receive money. Come in above it, and your hospital can owe Medicare. That comparison has a name. Reconciliation. Everything else in this model exists to move that one number.

Now understand when the risk starts.

Numerous commenters asked CMS to make the first performance year upside-only, so hospitals could learn the model before owing anything. CMS declined. The rule states that an upside-only first year is not necessary or appropriate for CJR-X.

CMS did not remove downside risk. It delayed the start of the model, moving it from October 1, 2027 to January 1, 2028. Those are different decisions.

Your hospital carries downside risk from the first performance year. What CMS granted was preparation time. Now sit with what that means clinically.

Most surgeons reading this have never managed a skilled nursing facility relationship. The rehab facility that keeps your patients an extra nine days has never cost your hospital a dollar.

In 2028, it costs you directly, and you likely have no contract with them, no leverage over them, and no current visibility into which facilities your patients go to after discharge.

The model has a name. Comprehensive Care for Joint Replacement Expanded, which CMS shortens to CJR-X. It covers hips and knees only.

DOES THIS APPLY TO YOUR HOSPITAL?

If your hospital performs Medicare hip or knee replacements, assume this applies until your team confirms otherwise.

CMS wrote the participation rule as one sentence. Any acute care hospital in the country that performs lower extremity joint replacements and holds eligibility for payment under both the inpatient and outpatient Medicare payment systems participates.

Then CMS wrote the exceptions. There are two.

Hospitals already participating in a different Medicare surgical payment model called TEAM. Hospitals located in Maryland.

That is the complete list.

Read it again and look for physician ownership.
Look for bed count.
Look for whether you operate an emergency department.
Look for specialty focus.

None of it is there.
That matters more than it sounds.

For sixteen years, physician ownership has been the thing that determined your hospital’s legal treatment. Section 6001 of the Affordable Care Act froze physician-owned hospitals at whatever beds, operating rooms, and procedure rooms they were licensed for on March 23, 2010. Ownership was the entire question.

One clarification, because it will come up with your billing team. Some hospitals hold eligibility under the outpatient payment system without billing much outpatient volume. CMS addressed that during finalization and said eligibility governs, not actual billing.

In this participation rule, ownership is not a question at all.

Participant definition at 42 CFR 512.605. Exceptions at 42 CFR 512.610(b).

This one is outside the wall because the clock is short.
The next one will not be.

100,000 readers per month: physicians, healthcare executives, and lawmakers. The ones who pay keep it independent.

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THE NUMBER 31

Here is the one figure you can pull today.

CMS wrote a volume floor into the rule. For a performance year, if CMS finds fewer than 31 joint replacement episodes in the applicable baseline period, it establishes no target price and runs no reconciliation for that hospital.

Be careful with what that does and does not mean.

Falling under 31 does not remove your hospital from the model. Your hospital still participates. What changes is that no target price exists and no settlement happens, so no money moves in either direction for that year.

Participation and financial settlement are two different things. Do not let anyone in your organization conflate them.

The baseline period for the first performance year runs January 1, 2024 through December 31, 2026.

Two of those three years already sit in your billing system. Someone on your team can count them this afternoon.

If you are well above 31, your hospital carries financial exposure, and you have eighteen months to build post-acute relationships you probably do not have today.

If you are near 31, that number is the most consequential figure in your hospital right now, and volume decisions you make this quarter move it.

If you are well below 31, count it, document it, and check it again each year. The floor applies per performance year, not once.

Nobody is going to run this number for you.

Low-volume exception at 42 CFR 512.545(a)(4).
Baseline period at 42 CFR 512.545(b)(2).

THE OTHER MODEL, AND THE CHOICE COMING

CMS already runs a second surgical payment model called TEAM. It works through the same basic mechanism, with two differences that matter.

TEAM covers five categories of surgery instead of one. Joint replacement, spinal fusion, coronary artery bypass, major bowel procedures, and surgical hip and femur fracture treatment.

And TEAM follows the patient for 30 days after discharge. CJR-X follows the patient for 90 days. Today, TEAM is mandatory only for hospitals in geographic areas CMS selected. Some physician-owned hospitals landed inside those areas.

In April, CMS asked whether physician-owned hospitals outside those areas could volunteer to join. Comments closed in June. Yesterday CMS answered. The agency said it intends to propose a voluntary participation policy in future rulemaking.

Read that carefully. Intends to propose. No opt-in policy exists yet. CMS must publish a proposed rule, take comments, and finalize terms before any hospital can act on it.

That proposal would not unfreeze a single bed, operating room, or procedure room. CMS said it holds no authority to amend, modify, or repeal the statute. Section 6001 stands.

What it would create is a choice between two models.

Same hip. Same knee.
Sixty days of difference in how long Medicare keeps counting.

Most people will assume a 30-day window removes two-thirds of the risk. Maybe.
Episode spending tends to cluster early, in the days right after discharge. Your own claims already hold the answer for your hospital.

TEAM measures 30 days. CJR-X measures 90.
The shorter window does not remove two-thirds of the risk.

WHAT YOUR HOSPITAL CAN ACTUALLY LOSE

To understand what your hospital can actually lose, you need two numbers: 20 percent and 5 percent. One applies to most hospitals. The other applies only if your hospital falls into one of four protected categories.

CMS capped repayment. For a CJR-X participant, the amount owed back for a performance year cannot exceed 20 percent of the aggregated target price for that year. That is the ceiling. Not 20 percent of revenue, not 20 percent of margin. Twenty percent of what CMS said your episodes were supposed to cost.

Then CMS wrote a second, lower cap at 5 percent for four categories of hospitals.

Medicare-dependent small rural hospitals. Rural hospitals, meaning an inpatient hospital located in a rural area or a rural census tract. Sole community hospitals. And safety net hospitals, which CMS defines here as hospitals in the top quarter of their region for the share of joint replacement episodes furnished to dual-eligible beneficiaries during the baseline period.

Check that last one carefully. It is not a designation your hospital applies for. CMS measures it from your own claims. A physician-owned hospital serving a heavily dual-eligible population may already qualify and not know it, which cuts its maximum exposure by three-quarters.

Gains carry the same 20 percent ceiling in the other direction.

Now combine the caps with the window, because that is where the real answer sits.

A 30-day model and a 90-day model both settle against a target price, and both cap at the same percentage of that target price. What the longer window changes is how often your hospital pushes against the cap, not how far it can fall in a single year. The window drives frequency of loss. The cap drives magnitude.

A hospital with strong post-acute discipline may never approach either ceiling under 90 days. A hospital that discharges to whichever facility has a bed may hit the cap repeatedly, and the shorter TEAM window would help it substantially.

That is the actual test. Not which window is shorter. Whether your hospital’s spending clusters in the first 30 days or spreads across all 90.

You can answer that today from your own claims. Here is the analysis.

Pull every Medicare joint replacement episode your hospital initiated between January 1, 2024 and today.

For each one, take total Medicare spending across all settings for 90 days after discharge, not just what your hospital billed. Bucket that spending by day.

Then plot the cumulative curve.

Read the shape.

If the curve reaches most of its total by day 30 and flattens, the extra sixty days of CJR-X exposure costs you very little, and a TEAM opt-in buys you almost nothing.

If the curve keeps climbing through day 60, those sixty days are where your money goes. A TEAM opt-in becomes the most valuable item on your regulatory calendar, and your post-acute network is the thing to fix first.

If the curve is flat but your outlier cases have long tails, your problem is not the network. It is a handful of patients, and you can name them.

Most hospitals have never run this. The data has been sitting in their claims for two and a half years. Now you know whether thirty days is worth anything to you.

Stop-loss and stop-gain limits at 42 CFR 512.545©(6). Protected category definitions at 42 CFR 512.605.

Eighteen months to fix a post-acute network.
Or one reconciliation to find out what it cost.
Nobody funds this work except the readers.

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WHAT CMS PUT ON THE RECORD

There is one more thing in yesterday’s rule worth your attention, and it has nothing to do with payment.

For sixteen years, the argument against physician-owned hospitals has been the same. You take the young, healthy, well-insured patients. You skip the hard ones. You avoid emergency obligations. You drain the community hospital down the road.

Somebody filed that entire argument in the comments. All of it. The readmission penalty statistics, the rural margin claims, the emergency service comparison.

CMS wrote its answer in the Federal Register.

The agency said it takes those concerns seriously. Then it said it does not agree they require rejecting participation. It does not agree that voluntary participation by itself permits cherry-picking or steering. It does not agree that a focus on profitable service lines justifies excluding otherwise eligible physician-owned hospitals.

Look at what CMS proposes to do instead of excluding.

Monitor case mix. Monitor referral patterns. Monitor admission sources, transfer patterns, readmissions, and outlier spending. Act if the data shows a problem. Remove a participant if it comes to that.

Yesterday, the agency confronted the stated risks of physician ownership and reached for monitoring, data, and remedial action rather than categorical exclusion.

Every one of those regulates what a hospital does.
Section 6001 regulates who owns it.

The rule changes nothing about your beds.
It changes something about the record.

Next Saturday: the second number, and what a post-acute network costs to build from nothing.

Run the curve first. Some of you will find it flattens by day 30, and you can stop reading about this model. Some of you will find it climbing at day 60, and you will be looking at a network you do not have, a contract you have never negotiated, and eighteen months.

That second group has a bigger problem than a newsletter solves.

Find out which group you are in this week.

-Rojas out.

AUTHOR DISCLOSURE:

Dutch Rojas is the founder of The Rojas Report, the owner and operator of multiple healthcare companies, and a member of the Board of Directors of Physician Hospitals of America (PHA). He does not hold a direct ownership interest in any hospital.

GLOSSARY

Episode: Everything Medicare spends on one patient from surgery through a set number of days after discharge, added into a single number.

Target price: The number CMS sets before the year starts as the benchmark for an episode.

Reconciliation: The settlement after the year ends. CMS compares actual spending against the target price and money moves in one direction or the other.

Stop-loss: The cap on how much a hospital can owe Medicare after reconciliation in a single performance year.

CJR-X: Comprehensive Care for Joint Replacement Expanded. Nationwide, mandatory, hips and knees only, 90-day episodes, starting January 1, 2028.

TEAM: Transforming Episode Accountability Model. Five surgical categories, 30-day episodes, currently mandatory only in geographic areas CMS selected. Runs through December 31, 2030.

Section 6001: The 2010 Affordable Care Act provision that froze physician-owned hospitals at their March 23, 2010 licensed beds, operating rooms, and procedure rooms, and closed the door on new ones.

Baseline period: The historical window CMS uses to count your episodes and build your target price. For the first CJR-X performance year, January 1, 2024 through December 31, 2026.

Dual-eligible beneficiary: A patient covered by both Medicare and Medicaid.

SOURCES

The rule itself

Centers for Medicare & Medicaid Services. Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2027 Rates. CMS-1849-F. Displayed for public inspection July 31, 2026. Federal Register publication August 4, 2026.

Read it here: https://www.federalregister.gov/d/2026-15833

That permalink appears on page one of the document itself and goes live on publication. Until then the display copy sits on the Federal Register public inspection desk.

The provisions cited in this article

• CJR-X participant definition and protected hospital categories: 42 CFR 512.605

• CJR-X exclusions: 42 CFR 512.610(b)

• Low-volume exception and baseline period: 42 CFR 512.545(a)(4) and (b)(2)

• Stop-loss and stop-gain limits: 42 CFR 512.545(c)(6)

• Monitoring and remedial authority: 42 CFR 512.592 and 512.596

These sections are new. CJR-X sits in a new subpart F of part 512 and takes effect October 1, 2026, so none of it appears in the Code of Federal Regulations yet. Until it does, the rule text linked above is the only place to read it.

TEAM, which is already in force

TEAM took effect January 1, 2026, so its regulations are live and readable now.

Subpart E in full: https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-H/part-512/subpart-E

TEAM definitions at 42 CFR 512.505: https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-H/part-512/subpart-E/subject-group-ECFR3752b6db9419a65/section-512.505

Where the physician ownership questions started

CMS opened the Request for Information in the FY2027 proposed rule, published April 14, 2026. The eight questions CMS asked are worth reading against the answers it gave.

https://www.federalregister.gov/documents/2026/04/14/2026-07203/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-ipps-and

The count of physician-owned hospitals

CMS put the number above 240 and cited it, at footnote 572, to Physician-Led Healthcare for America.

https://physiciansled.com/physician-led-hospitals-2/

Worth noting who counted. The federal government relies on the sector’s own tally because no other tally exists.

CMS rule pages

Acute Inpatient PPS: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps

The FY2027 final rule home page, which will carry the tables and impact files, has not posted yet. The proposed rule home page is here: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2027-ipps-proposed-rule-home-page

Thousands of healthcare bills never lost a vote.

Most never got one.
Here is one that lost while winning.

In March 2018, the Right to Try Act came to the House floor and won, 259 to 140. A 119-vote majority.

It failed.

Leadership had brought it up under suspension of the rules, a procedure requiring two-thirds of members to vote. The bill needed 266 votes. It received 259.

Seven votes short of a threshold most voters have never heard of, on a bill supported by a large majority of the House.

That is the visible graveyard: bills that won majorities and died on thresholds.

Cloture at sixty.
Suspension at two-thirds.
Discharge at 218 signatures.

But walk through the graveyard looking for the bills your practice actually needed, site-neutral payment, PBM transparency, or reforms to the economics of medicine, and you will find something stranger than defeat.

They are not buried there.
There are no headstones.
The economic healthcare agenda rarely gets a vote to lose.

This is the final installment, and it explains all the others.

IN TODAY’S ARTICLE:

• Congress runs on thresholds: 60 votes for Senate cloture, two-thirds for the House suspension calendar, and 218 signatures to discharge a bill from committee.

• The record from 2015 through July 2026 shows bill after bill winning majorities and dying anyway: 259 votes, 53 votes, 57 votes, 213 signatures. Majorities lose constantly.

• But the verified record reveals no clean threshold kill for major site-neutral payment or PBM legislation. The economic bills die earlier and more quietly.

• Part Five of How a Bill Really Dies: bills do not mostly die because they lose votes. They die because leadership decides which bills ever face one.

Glossary at the bottom of today’s article.

THE ARITHMETIC OF LOSING WHILE WINNING

American civics teaches one number: the majority.

Congress runs on three others.

Sixty, for Senate cloture under Rule XXII. A bill with 59 supporters and 41 opponents may still never reach a final vote.

Two-thirds, for the House suspension calendar, the fast-track leadership uses to schedule bills without amendments or a special rule. A bill can win by a hundred votes and still fail.

Two hundred eighteen, the signatures required on a discharge petition to force a bill out of committee against leadership’s wishes.

Five installments ago, you read the news like everyone else.

Now you read the calendar, the continuing resolution, the manifest, the reconciliation instructions, and the vote math.

The people across the table have read them for decades.

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July 24, 2025: UnitedHealth discloses in a securities filing that it is complying with formal criminal and civil requests from the Department of Justice.

July 2026: the stock has risen nearly 80 percent from its trough, and no resolution has been disclosed.

The forgiveness has a date.
The verdict does not.

IN TODAY’S ARTICLE:

• July 24, 2025: the company confirms formal criminal and civil requests from the Department of Justice concerning its Medicare program participation. Five days later, it cuts its earnings guidance nearly in half.

• Through 2026, the repair: roughly 1.1 million members off the rolls, benefits repriced, the physician roster sorted, margins restored. The last article itemized that bill.

• By July 2026, the stock trades nearly 80 percent above its trough, at roughly the multiple it commanded before the collapse. The 10-K discloses no resolution.

• Between the trough and the rally, no resolution of the inquiry was publicly disclosed. The price moved anyway. That gap is today’s article.

Glossary at the bottom of today’s article.

One statement before the record.
An inquiry is a question, not a finding.

Nothing in the public record establishes wrongdoing, and this article draws no conclusion about how the matter resolves.

The subject here is the market, which drew its conclusion anyway.

THE COLLAPSE

The dates carry the argument.
Read them in order.

April 17, 2025: UnitedHealth reports its first earnings miss since 2008, and cuts adjusted EPS guidance from a range of $29.50 to $30.00 down to $26.00 to $26.50.

May 13, 2025: CEO Andrew Witty resigns. Stephen Hemsley returns to the top job. Guidance is withdrawn entirely.

Two beats in, the story is an operating failure. Bids mispriced, costs underestimated, leadership replaced. Painful, ordinary, the kind of year public companies survive.

The third beat is the one this article exists for.

THE CONFIRMATION

July 24, 2025: UnitedHealth discloses in a securities filing that it is complying with formal criminal and civil requests from the Department of Justice concerning its Medicare program participation. The company says it reached out to the Department proactively and expresses full confidence in its practices.

Mark what the statement establishes, and only that. Formal requests exist. They are both criminal and civil in nature. They concern the Medicare business, which is to say the business this series has spent four articles walking through: the members, the delegated risk, the physicians, the facilities, the bids.

Requests are investigative steps. They are not charges, and they are not findings. What they are is unresolved.

July 29, 2025: five days after the confirmation, the reset.
Adjusted EPS guidance of at least $16, nearly half the original number.

August 1, 2025: the stock closes at $237.77, down 62 percent from its November peak.

In a single summer week, the company confirmed an open criminal and civil inquiry and halved its earnings floor. By the time the stock found its bottom, both were on the record.

THE REPAIR

The next two beats ran through 2026, and the last article itemized them.

Roughly 1.1 million Medicare Advantage members off the rolls, 600,000 of them in discontinued plans. Counties exited, benefits adjusted, and premiums and cost-sharing increased for the members who stayed.

The physician roster sorted into the company’s own categories: employed, contractually dedicated, or removed, with the rebuild running toward 2028.

July 16, 2026: second-quarter results beat expectations. The medical-care ratio improves to 86.7 percent. Full-year guidance rises to a range of $19.50 to $20.00.

The margins recovered. The bill went to the members and the physicians. What follows is what the market did with the beat this article opened on, the one the repair could not touch.

Everyone watched the stock recover.
Almost no one checked what it recovered without.
The checking is below.

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COBRA stands for Consolidated Omnibus Budget Reconciliation Act.

You have spent a career citing a budget maneuver.

EMTALA, the law that governs every emergency department in America, rode inside it. Passed in 1985, as a provision of a deficit bill, under a procedure built for arithmetic.

The ACA’s final form. The individual mandate’s repeal. The $35 Medicare insulin cap. Drug price negotiation. Last year’s Medicaid overhaul.

All of it moved under the same rulebook, and the rulebook has one governing feature: the filibuster does not apply.

Americans learned a Senate where big laws need sixty votes. Again and again, major healthcare changes that could not clear sixty moved with a simple majority.

The rules changed before the debate started.
That’s the part they never teach.

IN TODAY’S ARTICLE:

• Budget reconciliation, created by the Congressional Budget Act of 1974, moves tax and spending legislation under strict debate limits. No filibuster. Simple majority.

• Congress has used it to build healthcare law again and again since 1980: COBRA, EMTALA, the reconciliation law that completed the ACA’s final legislative form, the mandate repeal, ARPA subsidies, the Inflation Reduction Act, and last year’s Medicaid law.

• The price of the fast lane is the Byrd rule, enforced by the Senate parliamentarian, whose pre-floor review quietly rewrites healthcare policy before any senator votes.

• Part Four of How a Bill Really Dies: the blueprint for the next reconciliation bill cleared committee July 16, $95 billion wide. This is the rulebook it will run under.

Glossary at the bottom of today’s article.

THE FAST LANE

The Congressional Budget Act of 1974 created a special procedure for legislation that changes spending, revenue, or the debt limit. It is called reconciliation, and it comes with two features that rewrite the Senate.

Debate on the measure is capped by statute at twenty hours. When the clock expires, voting can continue, but extended debate cannot. A capped debate cannot be filibustered, and a bill that cannot be filibustered needs no sixty-vote cloture.

A simple majority.
That’s the whole game.

The catch is jurisdiction. Reconciliation exists for budget arithmetic, and healthcare is where the federal budget lives. Medicare, Medicaid, subsidies, and drug pricing all contain federal spending or revenue levers, which makes them natural candidates for reconciliation.

But the subject alone does not qualify the provision. The language still has to produce the required budget effect and survive the Byrd rule. Healthcare starts with an advantage because so much of it runs directly through federal spending and revenue. The advantage is a head start, never automatic admission.

And there is a personal stake buried in that history. Congress enacted the RBRVS-based Medicare fee schedule through reconciliation in 1989, and CMS began paying under it in 1992. The payment architecture of American medicine was a budget provision. It has been amended as a budget provision ever since. When physicians say Congress ignores them, the more precise statement is that Congress governs them through a procedure they have never watched.

Which is why the fast lane’s history reads like a healthcare syllabus.

The next reconciliation instructions are already public, $95 billion wide.
The people who know how to read them started in July.
The rest find out what qualified when the scoring tables drop.

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A turnaround has winners.

Ask the 600,000 seniors whose plans were discontinued.

The recovery Wall Street is applauding arrived as a bill, not as a mailing to shareholders.

IN TODAY’S ARTICLE:

• UnitedHealth is reducing Medicare Advantage membership by roughly 1.1 million in 2026, about one member in eight. Inside that number: more than 100 discontinued plans holding 600,000 members, 109 exited counties, and the benefit adjustments and competitive losses that account for the rest.

• The members who remain pay the second line of the bill: thinner benefits, higher premiums, higher cost-sharing.

• The physicians pay the third, in the company’s own categories: employed, contractually dedicated, or removed from the network, with value-based membership shrinking about 10 percent in 2026.

• Wall Street rewarded the result with the company’s old valuation multiple, roughly 21.6 times earnings, on earnings roughly 29 percent below 2024. The old premium came back before the old earnings did.

Glossary at the bottom of today’s article.

THE FIRST LINE OF THE BILL: THE DROPPED

Start where the recovery started: with the rolls it reduced.

UnitedHealth is reducing its Medicare Advantage membership by roughly 1.1 million people in 2026. The company ended 2025 with 8.4 million Medicare Advantage members, which makes the reduction about one member in eight. The reduction has an anatomy, and the company disclosed it.

More than 100 plan options were discontinued for 2026, affecting about 600,000 members, concentrated in the PPO products the company calls less-managed. Within that, 109 counties were exited outright, covering roughly 180,000 people.

The rest of the contraction follows from what UnitedHealthcare’s chief executive described to investors in October 2025: significant benefit adjustments, targeted plan exits, and network reductions, plus the competitive losses that follow them.

On an earnings call, a plan exit is a slide. At a kitchen table, it is a letter. For the 600,000, the non-renewal notices went out in October 2025. The coverage ended December 31, and the senior holding one spent the annual enrollment window re-shopping networks, formularies, and physicians in the middle of retirement. Some found their doctor in the next plan.

Some found out in January that they did not.

The company describes this as a portfolio repositioning and an exit from underperforming markets. Both descriptions are accurate. Neither mentions that the underperformance belonged to the bids, and the exit belonged to the member.

THE SECOND LINE: THE REPRICED

The seniors who kept their plans paid the second line.

The 2026 repair repriced the book, and the receipt is the company’s own language. On the October 2025 earnings call, UnitedHealthcare’s chief executive told investors that the company had made significant adjustments to benefits and executed targeted plan exits and network reductions to offset elevated medical trend rates and government funding decreases.

In plan design, benefit adjustments in a margin year mean thinner supplemental benefits and higher cost sharing for the products that survive. The logic is standard underwriting.

The 2024 and 2025 bids assumed less care than members actually used, Washington tightened the payment formula, and the 2026 bids priced in the difference while trimming what the premium buys.

Hold the sequence still and look at it. The bids missed the medical trend, and the government tightened funding, according to the company’s own accounting. The correction was priced into the monthly budget of a retiree on fixed income.

The last article traced one Medicare dollar through four floors of the structure. The repair travels the same floors in reverse and settles at the bottom because the member stands on the ground floor and there is no floor below it.

THE THIRD LINE: THE TIGHTENED

The physicians paid the third line.

This series opened by counting them: the tens of thousands of affiliated physicians a national platform presents as its own. The recovery is the sequel to that count, and this time the mechanism is on the record.

Optum’s leadership told investors in October 2025 that the network had grown oversized and overreliant on less-aligned affiliated physicians, and described the repair in the company’s own categories: moving toward employed or contractually dedicated physicians, and removing the less-aligned from networks that will shrink further in 2026.

Value-based membership was projected to fall about 10 percent in 2026 as the platform exits markets and PPO contracts covering roughly 200,000 lives. In January 2026, Optum’s chief executive repeated the plan in plainer terms, leaving markets and ending contracts with physicians not aligned with the strategy, and announcing a $2.8 billion fourth-quarter charge that covered the restructuring, among other items.

The recruiting pitch was stability. The repair sorted the roster: employed, contractually dedicated, or removed. The physician who affiliated to escape standalone risk spent 2025 learning that the platform’s mispriced bids were his problem too, and 2026 learning which category he fit. The adjustment ran in one direction, and the physicians were the adjustable part.

The first three lines of the bill are itemized above. Supporters receive the payee, the arithmetic, and the multiple that turned it all into applause.

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Rojas Actual.

Most legislation dies of nothing.

No dramatic vote.
No veto.
No headline.
It waits in line, and the line closes.

This page is the permanent home of How a Bill Really Dies, a five-part series on how that machine actually works, and how the winners of the healthcare economy work it.

Every installment teaches one governing mechanism and hands you one public document to watch. Together they replace the civics diagram you learned as a child with the operating manual the lobby has used for decades.

Start anywhere.
Read them in order for the full effect.
Each one answers the question the last one creates.

PART ONE: THE CALENDAR

The House Goes Home on October 1.
The Fee Schedule Comment Deadline Is September 14. Do the Math.

Why most bills never move. Congress published its schedule the previous November, twenty scheduled session days remained before the election, and one side of the healthcare economy planned its entire year around a document the other side never downloaded.

The document: the congressional calendar.

PART TWO: THE CONTINUING RESOLUTION

Congress Has One Must-Pass Bill Before the Election.
Your Priorities Ride It or Die.

Which vehicle actually moves. When the calendar kills standalone paths, the one bill that must move becomes the most valuable real estate in American law, and healthcare policy travels on it as freight. How to read a stopgap the way a lobbyist does: the exceptions, the extensions, and above all, the date.

The document: the continuing resolution.

PART THREE: THE LAME DUCK

The Most Consequential Session of Congress Begins After Voters Have Spoken.

When the real deals get finished, every election-year Congress since 2010 has enacted healthcare legislation after Election Day. On four major year-end packages, the maximum window between the official text anchor and the House vote ran from 4 hours 4 minutes to 30 hours 38 minutes. The people who drafted the freight didn’t need the afternoon. They’d had since summer.

The document: the year-end package.

PART FOUR: RECONCILIATION

The Senate Rulebook That Wrote COBRA, EMTALA, and the ACA’s Final Form.

How major healthcare policy moves with a simple Senate majority. COBRA stands for Consolidated Omnibus Budget Reconciliation Act; you have spent a career citing a budget maneuver. The fast lane, the Byrd rule, and the closed procedural review that reshapes healthcare law before any senator votes.

The document: the reconciliation instructions.

Release date: July 29, 2026.
Link: Click here.

PART FIVE: THRESHOLDS

Thousands of Healthcare Bills Died Without Ever Losing a Vote.

Why floor votes are the visible theater. Bills win 259 to 140 and die. Majorities fail cloture on schedule, twice in one December day. And the economic healthcare agenda, site-neutral, PBM reform, the bills about who collects what, seldom gets a vote to lose, because leadership decides what ever faces one.

The document: the vote math, and the hand on the dial.

Release Date: July 31, 2026
Link: Click here.

THE STANDING WATCH LIST

Keyed to this year, all public, all free:

The revised 2026 House calendar, posted since November. The continuing resolution and its December 4 proposed expiration, moving by September 30. The lame-duck manifest, sealed in November, voted in December. The FY2027 reconciliation instructions, $95 billion wide, live now.

And every threshold vote between now and January, read with one question: was this bill brought to the floor to pass, or to fail on camera?

The asymmetry was never information.
It was attention, and attention is a choice.

Now you know where healthcare law actually comes from.

-Rojas out.

Wall Street treated the architecture as a hedge.

When the insurer suffers, the care platform profits.
The pieces offset each other.

2025 ran the experiment.
The insurer’s earnings collapsed.
The care platform fell into a loss.

The promise was never tested until it failed.

IN TODAY’S ARTICLE:

• The thesis: Wall Street priced in owning the insurer, the physicians, the facilities, and the claims infrastructure, and rising care costs shift earnings across the stack instead of leaving the company.

• Both sides of the care hedge deteriorated together. UnitedHealthcare’s operating earnings fell 40 percent in 2025. Optum Health swung from $7.77 billion in earnings to a $278 million loss.

• The reason: CMS premiums supplied 44 percent of consolidated revenue, and every floor of the structure eats the same dollar. Four businesses, one government-priced payment.

• The recovery plan confirms the diagnosis. It reduced exposure across the same stack: fewer Medicare Advantage members, tighter physician relationships, and higher pricing on the business that remained.

Glossary at the bottom of today’s article.

THE PITCH

The architecture took two decades to assemble and one sentence to sell.

Own the insurance company that collects the premium. Own the physicians who direct the care. Own the surgery centers and home-health agencies where the care happens. Own the claims rails the money moves across. Then tell Wall Street the pieces hedge each other: in a year when medical costs spike, the insurance segment suffers, but every dollar of that extra care flows into facilities and physician groups the same company owns. Heads, the insurer wins. Tails, the care platform catches the coin.

The market priced the architecture as a diversified earnings machine.

Diversification works only when risks do not move together under stress. Nobody ran that test on UnitedHealth’s stack, because through 2024, every segment went up. A hedge that has never been stressed is indistinguishable from a pile.

Then 2025 stressed it.

THE EXPERIMENT

The collapse arrived on a schedule.

April 17, 2025: UnitedHealth reports its first earnings miss since 2008, and cuts adjusted EPS guidance from a range of $29.50 to $30.00 down to $26.00 to $26.50. Medicare Advantage utilization is running hotter than the bids assumed.

May 13, 2025: CEO Andrew Witty resigns. Stephen Hemsley returns to the top job. Guidance is withdrawn entirely.

July 29, 2025: the reset. Adjusted EPS of at least $16, nearly half the original number. The company discloses that expected company-wide medical expense for 2025 sits $6.5 billion above its original assumption.

Read the table the way an underwriter reads a loss run.

The insurer kept its profit and lost 40 percent of it. The care-delivery platform, the segment built to profit when the insurer bleeds, did not catch the coin. It swung from $7.77 billion in earnings to a loss. The claims-infrastructure segment fell 15 percent. Consolidated operating earnings dropped 41 percent in a year when revenue grew 12 percent. The company sold more of everything and kept less of all of it.

One segment grew. Optum Rx, the pharmacy business, rose 23 percent. It carried a broader external customer base and different earnings drivers than the insurer and the delegated-risk physician platform. The exception defines the rule: the only major segment that grew was also the one least dependent on the insurer-care loop this article examines.

The hedge Wall Street bought, an insurer against care platform, deteriorated on both sides in the same twelve months. That is not what a hedge does under stress. That is what a mirror does.

THE CORRELATION

Here is the correlation the diversification story concealed.

At year-end 2025, CMS premiums generated 44 percent of UnitedHealth’s consolidated revenue. UnitedHealthcare carried 8.4 million Medicare Advantage members and priced the benefit. Optum Health accepted delegated risk on the medical costs of many of those same members.

Optum-owned physicians and facilities delivered care to that population in the geographies where the insurer concentrated its operations, as the first article documented. Optum Insight processed part of the transaction flow. And roughly a quarter of consolidated revenue is intercompany, eliminated in the financial statements. The insurer pays Optum. Optum bills the insurer.

Stack the floors.

The premium floor collects the government-priced Medicare Advantage dollar. The physician floor takes delegated risk on that same dollar. The facilities floor treats the members that dollar covers. The claims floor processes the transactions that dollar generates. Four floors, one dollar, one landlord in Washington.

Then the assumptions failed from two directions at once. CMS changed how payments were calculated, completing the phase-in of its revised risk-adjustment model, which the industry calls V28. And utilization ran past the assumptions built into the bids and the risk contracts. One pressure was payment methodology. The other was medical-cost experience. Both traveled through businesses tied to the same members and the same dollar, because every floor had priced the same set of revenue and cost assumptions.

The four businesses did different jobs. Too many of them depended on the same federal payment, the same members, and the same utilization forecast. They were never four exposures. They were one exposure wearing four uniforms.

The internal customer looked like a hedge on an investor slide. Under stress, it behaved like a mirror: whatever happened to the insurer happened to its reflection, at the same time, for the same reason.

Wall Street found the correlation after the earnings collapsed.
Supporters receive the recovery plan that confirms it.

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A non-denominational church on the south side of a metro you have driven through. Five thousand members. A main campus with a 1,200-seat sanctuary, a children’s wing, a coffee shop, a parking deck. Two satellite campuses. A worship band that streams to YouTube every Sunday morning at nine and eleven.

The church spends four million dollars a year on insurance. Property on three campuses. General liability. Workers compensation. Health benefits for the staff. Auto on the vans. Cyber. And even SAM coverage.

Four million dollars.
Every year.
Out of the offering plate.

The pastor preaches a sermon series on stewardship in the fall. He calls his congregation to tithe. He calls them to give faithfully, sacrificially, joyfully. He means every word of it. He does not mean for the offering to flow from the pew to the pulpit to the insurance broker. That is exactly where a great deal of it is going.

Forty minutes down the road, another non-denominational church is doing the same thing. Five thousand members of its own. Same suburban demographic. Same insurance broker network. Same coverage stack. Same multi-million dollar line item. Two separate accounts. Two separate invoices. Two separate Sunday morning prayers asking God to provide.

The two pastors know each other. They have shared pulpits. Their wives are friends. Their children attend the same youth retreats. They have never once sat down and asked whether one shared benefits broker, one pooled property tower, one consolidated cyber policy might free up a million dollars between them. A million dollars that could fund the youth ministers, the missionaries, the food pantry, the addiction recovery program that both churches keep meaning to launch.

It would not require a merger.
It would not require theological agreement on every fine point.
It would not require sacrificing a single minute of either pastor’s calling.
It would require a phone call.

The phone call does not get made.

Independence and living on an island are two different things.

That sentence is the entire thesis.
Read it twice if it did not land.

Independence is a virtue. It is the soul of the American experiment, the soul of the Reformation, the soul of the small business, the soul of the family farm.

Living on an island is not a virtue. It is a vulnerability dressed up in the costume of a virtue. It is what happens when an institution forgets that the calling that made it independent in the first place was always meant to be lived alongside its neighbors.

I have spent the better part of the last year sitting across the table from rural hospital CEOs. Sixty of them. Maybe a few more. They tell me the same story in different accents.

The hospital is bleeding cash. The case mix is shifting toward older, sicker Medicare patients whose care costs more and pays less. The commercial mix has collapsed because the only large employer in town moved its headquarters to a metro. The supplemental payments from the state are a year behind. The malpractice premium just renewed at a number the board could not believe. The cyber insurance carrier is demanding new attestations the IT director does not know how to answer. The local nurse pool has been bought up by a national staffing agency that now charges twice what the hospital paid two years ago.

And then they tell me what they are going to do about it.
They are going to call their senator.

That is the plan. The entire plan. They believe that the senator from their state is, to borrow from a movie they probably have not watched in thirty years, their only hope. They believe it the way the orphan believed it. They have made it their theology.

Forty miles away there is another rural hospital. Same Medicare mix. Same staffing crisis. Same property insurance carrier. Same payroll vendor. Same EHR. Same cyber attestation paperwork sitting on the same kind of desk in front of the same kind of CFO, paid the same kind of salary to do the same kind of work twice.

The two CEOs know each other. They sit on the same state hospital association board. They have spoken at the same conferences. They have shaken hands at the same political fundraisers where the senator who is their only hope thanked them both for their support.

They have never once picked up the phone and asked whether they could share a single back-office function. Not one. Not insurance. Not benefits. Not purchasing. Not legal. Not compliance. Not even the contract review that both of their CFOs are doing this week on the same vendor agreement.

The cooperation that would lower their cost structure dramatically does not require a merger. It does not require legislative permission. It does not require a 501 (c) (3) reformation. It does not require a consultant. It requires a phone call.

The phone call does not get made.

This is not a hospital problem.
This is the American small enterprise problem in microcosm.

Manufacturing. I have sat with the second- and third-generation owners of foundries, machine shops, plastic injection operations, and food processors. Each one is running a back office that looks like it was assembled by a different person in a different decade with a different theory of ERP. Each one has a benefits broker who has been with the family since the founder’s funeral. Each one is buying the same steel, the same resin, the same packaging from the same regional suppliers, alone, at a price the supplier sets because no single buyer is large enough to push back.

Commercial real estate. Operators with eight buildings, twelve, twenty. Each one carries property insurance separately. Each one buys cleaning, landscaping, security, energy separately. Each one negotiates with the same regional contractors who have figured out exactly what each operator will tolerate paying. The operators know each other. They sit on the same chamber boards. They will not pool a single line item.

State chartered banks. Community banks with a hundred million in assets, two hundred million, five hundred million, each one running its own compliance shop, its own fraud detection, its own core processing renewal, its own regulatory examination prep. Each one losing market share to a credit union down the street that is, almost by definition, a cooperative. The credit union figured out a hundred years ago what the community bank refuses to consider this morning.

Restaurants. I sat with more than sixty independent restaurant owners at an association meeting last month. Most of them in the same metro. Paying retail to the same food distributors. Same uniform service. Same payroll processor. Same point-of-sale vendor. Same insurance broker. Not a single one of them had ever considered pooling their property insurance with the others in the room.

These are not unintelligent people.

They run businesses on margins that a hospital CFO would call impossible.
They negotiate every line item daily.
They survive seasons that would crush most enterprises in a quarter.
They are not dumb. They have never been asked the question in a way that demanded an answer, so the answer never came.

The chains they compete with do not pay retail for any of it. The chains buy at scale and crush them on cost of goods. The independent restaurateurs blame the delivery apps, blame inflation, blame the rent, blame the customer who will not tip. They do not call each other.

Independent medical practices. Same story. Six-person orthopedic group with its own HR. Three-person ophthalmology practice with its own benefits broker. Five-person internal medicine group with its own malpractice carrier. The hospital across the street that just bought their largest competitor pools all of it. That is part of why the hospital was able to write the check.

Physician-owned hospitals are the strangest case of all. The owners are co-investors with each other across multiple facilities. They already share an investment thesis. They already share a tax ID structure on dozens of joint ventures. They are in the same conference rooms three times a year. They sit on the same boards. They sign the same operating agreements. They distribute the same K-1s. And then they go home and renew their property insurance, their malpractice, their commercial contracts, their benefits stack, separately: each facility, alone. Most of them have never even heard of the cooperative ownership structures American farmers and credit union members have used for a hundred years to do exactly this together.

I have interviewed nearly a thousand business owners over the last sixty months.
The pattern does not change.

When I ask them why they do not cooperate, the answer is almost always the same.
It is not philosophical.
It is not ideological.
It is not even strategic.

It is, “this is the way we do it.”

That is the diagnosis. They do not refuse to cooperate. They have never thought about it. The question has never been put to them in a way that demanded an answer. The inheritance was independence in isolation, and they confused the inheritance with the calling.

Here is what makes the diagnosis painful: America used to know.

The farmer who got electricity in 1937 did not get it from a utility. He got it from a cooperative he and his neighbors capitalized themselves because no investor would run a line out to a farm that was twelve miles from the nearest town. The rural electric cooperative is one of the most successful private institutions in American history, and almost nobody under fifty knows what it is or how it was built.

The credit union exists because workers, often immigrant workers, often Catholic workers, often workers a commercial bank would not serve, pooled their savings and lent to each other. The credit union is a cooperative. It is older than many of the banks it now competes with. It is winning.

Mutual insurance companies exist because policyholders, not shareholders, own the risk pool. State Farm. Nationwide. Northwestern Mutual. Liberty Mutual in its origins. They were built on the same logic. The people who carry the risk should own the rails. They built some of the largest insurance companies in the country by refusing to surrender ownership to outside capital.

And it happened in modern memory.

In 1975, the commercial carriers walked out of medical malpractice in Alabama. The state’s largest carrier exited. Physicians searched the country for a replacement, then searched Europe. Nothing. So roughly 2,500 Alabama physicians each put up a thousand dollars, capitalized Mutual Assurance, and wrote their first policy in 1977. Northern California physicians did the same thing the same year and built NORCAL. The Doctors Company followed in 1976 out of Napa. The physicians did not need permission. They did not need a bailout. They needed a phone call to be made and, under the pressure of a crisis, they finally made it.

Agricultural cooperatives fed this country and still do. Land O’Lakes. Ocean Spray. Sunkist. Cabot Creamery. Each one is a federation of independent farmers who figured out that they could compete on the field and cooperate on everything else, and that this combination, not isolation, was the actual content of their independence. Their families still own their farms. They still make their own decisions. They are still independent. They are not on an island.

This is not a foreign concept to American business. It is the foundation of American business. We just stopped teaching it.

Somewhere in the last fifty years, the mythology shifted. The lone founder became the only acceptable archetype. The cooperative was reframed as a relic, or worse, as something vaguely socialist, which is a slander against an institutional form that was almost always built by deeply religious, deeply self-reliant, deeply independent people who happened to be smart enough to know that they could not buy electricity, lend money, or insure a barn alone.

The institutions that figured out cooperation built the country we inherited. The institutions that forgot are the ones now begging the senator for help, or asking the congregation to give a little more so the carrier can be paid.

What did cooperation produce for the institutions that figured it out?

It produced ownership that did not get sold. The farmer who joined the rural electric cooperative in 1937 did not just get electricity. He got equity in the rails his grandchildren still depend on. The worker who joined a credit union in 1925 did not just get a loan. He got a share in an institution that now has assets larger than the bank that refused him service. The members of Land O’Lakes did not just sell butter together. They built a brand the grocery chains have to negotiate with on the farmers’ terms, not their own.

It produced capital that stayed in the calling. Money that stopped leaving for the carrier and the broker and the vendor stayed in the building. The youth minister got hired. The labor and delivery unit stayed open. The food pantry opened. The credit got extended to the small business that no national lender would touch.

It produced decision rights that stayed local. The farmer still made his own decisions on his own land. The worker still chose his own loan officer. The pastor still preached his own sermon. The physician still set foot in his own operating room. Cooperation on the unglamorous things preserved authority on the sacred ones.

The independents who never figured it out got something else.
They got billed.

Independence is a calling. The calling is real.

The pastor is called to preach.
The CEO is called to keep the labor and delivery unit open.
The physician is called to operate.
The restaurateur is called to feed her neighbors.
The banker is called to extend credit to the small business in his town that no national lender will touch. The manufacturer is called to make the part.

These callings are sacred, in their way.
None of them are diminished by cooperation.
All of them are preserved by it.

Isolation is what happens when you forget the calling requires neighbors.

There is a grain elevator still standing in a small town in the upper Midwest. It has been standing for almost a hundred years. The farmers who built it are long dead. Their grandchildren still own it. The elevator is not the largest grain handling operation in the county. It is not the most modern. It does not move the most volume. It is still standing because the farmers who built it understood something that the institutions begging the senator for help today have forgotten.

Institutions do not disappear all at once.
They disappear one unnecessary invoice at a time.

One premium. One vendor.
One renewal. One phone call nobody made.

America became prosperous because independent people learned what could be shared without giving away what mattered.

That lesson built the country.
It can rebuild it.

-Rojas out.

In 2010, Congress decided physician ownership was a conflict of interest.

Seven years later, UnitedHealth paid $2.3 billion for Surgical Care Affiliates.

The payer that decides what surgery costs now owns where surgery happens.

Nobody in Washington called that a conflict.

IN TODAY’S ARTICLE:

• Section 6001 closed the whole-hospital exception in 2010. No new physician-owned hospitals could enter Medicare. The existing ones froze in place.

• Seven years later, Optum bought Surgical Care Affiliates, one of the largest surgery-center chains in the country, for $2.3 billion.

• In 2024 alone, UnitedHealth took full or partial stakes in more than 100 surgery centers. Almost none of it was announced.

• Health Affairs put the words “pricing power” on it in February. The physician ban never moved.

Glossary at the bottom of today’s article.

THE CONFLICT CONGRESS COULD SEE

March 2010. Section 6001 of the Affordable Care Act closes the whole-hospital exception to the Stark law. After December 31 of that year, no new physician-owned hospital can enroll in Medicare. The hospitals that already exist freeze in place: no new beds, no new operating rooms, no new ownership beyond hard caps.

The stated rationale: conflict of interest. A physician who profits from a facility might refer patients to that facility. Congress accepted the argument that this incentive was too dangerous to permit.

The argument had an author. The Federation of American Hospitals, the investor-owned hospital lobby, negotiated Section 6001 into the ACA, thereby closing the physician-ownership pathway while leaving every corporate route open. The Rojas Report archive covers its defense letters in detail.

The principle, as enacted: ownership plus referral power is a conflict too dangerous to permit. Washington permitted everything that follows.

THE SEVEN-YEAR TURNAROUND

January 2017.
Optum announces it will acquire Surgical Care Affiliates for approximately $2.3 billion. SCA operated one of the largest surgery-center chains in the country, spanning more than 30 states. Health Affairs Scholar researchers later documented that this single deal drove the growth of UnitedHealth’s ASC ownership.

The buying never stopped.
It just stopped being announced.

STAT reviewed UnitedHealth’s financial filings and found more than 35 surgery centers and physician practices acquired in 2023, nearly all without announcement. In 2024, the pace accelerated: full or partial stakes in more than 100 surgery centers, inside a year in which UnitedHealth acquired or created more than 250 subsidiaries. The targets concentrated in the most profitable procedural lines: cardiac cath labs, orthopedics, ophthalmology, gastroenterology. More than a dozen came through a joint venture with Texas Health Resources, a nonprofit hospital system in the Dallas-Fort Worth area.

The Private Equity Stakeholder Project traced the pattern further in October 2025: Optum absorbing entire private-equity-assembled platforms, including PE GI Solutions, OrthoAlliance, and U.S. Digestive Health, and surfacing as a reported bidder for Surgery Partners, the third-largest ASC operator in the country.

A physician who wanted to open a surgical hospital in 2017 was barred by federal statute. The largest health insurer in the country faced no such statute, and it bought at scale, quietly, for eight consecutive years.

THE FOUR HATS

Count the roles UnitedHealth holds in a single outpatient surgery.

It sets the reimbursement rate as the payer. It decides whether the claim gets paid. It owns the facility that collects the payment. And through Optum, it counts the operating physician as part of its platform, employed or affiliated, as covered here Tuesday.

Its insurance arm ended 2025 with 8.4 million Medicare Advantage members whose networks it designs. STAT’s 2024 review found the surgery centers concentrated in geographies where UnitedHealth is already the largest Medicare Advantage player. The map of what it bought follows the map of who it insures.

A physician with an ownership stake and a referral pen was a conflict. A conglomerate holding the rate, the claim, the facility, and the physician network is a business model.

Physicians got a statute.
UnitedHealth got a shopping list.
Supporters receive the mechanism that keeps the list off the regulators’ desks.

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$7.77 billion in earnings from operations in 2024.

A $278 million loss from operations in 2025.

An $8 billion swing in twelve months.

Optum’s answer: employ them, bind them tighter, or remove them.

IN TODAY’S ARTICLE:

• The 90,000-physician number Wall Street repeats never appears in UnitedHealth’s own investor book. The company provides no employment breakdown for it.

• The sworn count, from Andrew Witty’s written answers to the Senate Finance Committee: roughly 9,000 employed. The other 80,000-plus are independent physicians in risk contracts.

• Optum Health missed 2025 expectations by $6.6 billion. Its CEO blamed the affiliated physicians on the record.

• “Employed or contractually dedicated wherever possible” is the 2026 plan. The 80,000 affiliated physicians are the adjustable line.

Glossary at the bottom of today’s article.

THE NUMBER EVERYONE REPEATS

The claim runs in every headline. UnitedHealth employs 90,000 physicians. About one in ten American doctors, by the Senate’s own count. The largest physician employer in the country.

Becker’s ran it. Medscape ran it. Health Affairs cited it. Consultants built slide decks on it.

The number entered the world on November 29, 2023, at UnitedHealth Group’s investor conference. Amar Desai, then CEO of Optum Health, told Wall Street the platform had nearly 90,000 employed or affiliated physicians.

Employed or affiliated. Four words. The first one made the headlines. The middle two did the work.

Now open the official investor book UnitedHealth published for the same conference. Search it. The 90,000 figure appears nowhere. The book combines physicians and advanced practice clinicians into a single total of approximately 130,000. No split. No employment count. No definitions.

America’s most repeated physician count lives in a stage presentation.

THE SWORN COUNT

May 2024. Andrew Witty sits before the Senate Finance Committee to answer for the Change Healthcare cyberattack. Senators use the occasion to ask about the 90,000.

His written answer, submitted to the committee and repeated twice in identical language:

“Optum employs roughly 9,000 physicians. Optum does not employ any contracted or affiliated physicians. These affiliated physicians contract with Optum’s risk-bearing, independent practice association entities, who in turn contract with health plans under a value-based risk contract. These affiliated physicians are independent of Optum.”

Roughly 9,000.
One tenth of the number in the headlines.

The distinction is not cosmetic. An employee sits inside the enterprise. An affiliated physician sits inside a contract. The company can count both when describing scale. Only one has an employment relationship when the economics collapse.

The other 80,000-plus are independent physicians whose practices hold network participation agreements with Optum’s risk-bearing IPA entities. Those entities contract with health plans. The physicians carry the risk terms downstream. UnitedHealth also told the Senate that the network agreements contain no non-competes. No employment. No ownership. No non-compete. Either side could leave. Only one side controlled the network.

UnitedHealth told the Senate it holds no ownership or investment interest in those independent practices. Fewer than 3 percent receive management support from an Optum MSO.

The committee described the discrepancy directly: “You clarified in your testimony that UHG only directly employs roughly 10,000 out of those 90,000 doctors; you have never disclosed how exactly the other 80,000 doctors are classified.”

That fragment sits in the congressional record, dated June 2024. UnitedHealth has published no newer physician employment split since. The fiscal 2025 10-K, filed February 2026, reports nearly 165,000 clinical professionals among more than 390,000 employees and never isolates a physician employment total.

They counted 90,000 for Wall Street. They counted 9,000 for Congress. Both numbers came from the same company describing the same doctors.

Congress regulates ownership, employment, referral relationships, and market concentration. Optum’s model sits between those categories. It can aggregate tens of thousands of physicians for investors while describing those same physicians as independent when Congress asks who it owns.

THE DEFINITION DOES THE WORK

February 2025. UnitedHealth publishes a brief arguing Optum primary care outperforms hospital-based practices. The methodology fine print defines an “Optum Health practice” as one where the physicians are employees of “an Optum-affiliated physician-owned practice or an Optum-owned entity, exclusively managed and supported by Optum.”

That definition includes physicians legally employed by physician-owned professional entities while an Optum-owned MSO manages the infrastructure beneath them.

In states such as Massachusetts, corporate-practice restrictions help produce this structure: a physician-owned professional entity paired with a corporate-owned MSO. Optum owns the MSOs that supply the full scope of administrative, management, and support services to Atrius Health and Reliant Medical Group.

The physician’s name remains on the clinical entity. Optum owns and manages the machinery around it.

One more receipt from that same brief, buried in their own chart: physician-owned practices beat hospital-based practices on cost by 2.1 percent. UnitedHealth’s chart gives hospital-based practices a 1.6 percent quality edge and still shows them costing more. UnitedHealth’s own study, run on UnitedHealth’s own claims, confirms what independent physicians have said for decades.

Wall Street counted 90,000.
Congress got 9,000.

Supporters get what happened when the economics turned against the other 80,000.

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Remember that December 4 date from Part Two?

The one written into the House’s own stopgap proposal, back in July.

It wasn’t a funding deadline.
It was an appointment.

Leadership scheduled December’s negotiation in the summer, the way you’d book a conference room. The election happens November 3. The House returns November 9. The proposed stopgap expires December 4.

The major items Part Two put on the tracks arrive in the same six weeks, competing for space in the same year-end negotiation, in front of a Congress that includes members who will never face voters again.

There is a name for that session.

And once you see what it produces, you’ll understand why sophisticated government affairs offices across healthcare treat it as the real legislative year.

IN TODAY’S ARTICLE:

• The lame duck is the session between the election and the new Congress. Reelected members vote. Defeated members vote. Retiring members vote. Only some of them ever face voters again.

• Every election-year Congress since 2010, eight in a row, has enacted healthcare legislation after Election Day. The No Surprises Act, the 21st Century Cures Act, the doc fix, and the 2024 extender stack all passed after voters had spoken.

• On four major year-end packages, the maximum window between the official text anchor and the first House vote ran from 4 hours 4 minutes to 30 hours 38 minutes.

• Part Three of How a Bill Really Dies: the bills that survive the calendar and catch the vehicle get finished here, in the session conducted after the electoral verdict, partly by members who will never face voters again.

Glossary at the bottom of today’s article.

THE SESSION AFTER THE VERDICT

A lame-duck session is the period after the November election and before the new Congress convenes on January 3.

Everyone still votes.
The members who won reelection vote.
The members who lost vote.
The members who retired vote.

The chamber looks identical to the one voters just judged, except the judgment hasn’t taken effect, and for some of the people on the floor, it never will.

This year, the House returns November 9.

The new Congress arrives January 3, 2027. Between those dates sits the most consequential working period of the cycle, conducted entirely after the electoral verdict has been delivered.

The arithmetic alone makes the point. A member who lost in November casts December votes with no election ever ahead of them. A member who won casts December votes two years from the next judgment, when no voter will remember a package vote buried in a holiday week. For defeated and retiring members, the electoral feedback loop is gone. For reelected members, the next judgment is two years away.

Leadership knows this. Which is why leadership, given the choice in July of when the money runs out, chose December 4.

EIGHT FOR EIGHT

Here is the post-election healthcare ledger since 2010.
Every entry became law after voters had spoken.

Every election-year Congress since 2010 has enacted healthcare legislation after Election Day. In several cycles, the post-election package carried some of the decade’s most consequential healthcare policy.

2010: the Medicare and Medicaid extenders package carrying the physician payment update, the Zadroga Act establishing the World Trade Center Health Program, and the FDA food safety overhaul that granted recall authority. Three major health laws, one post-election December.

2012: the American Taxpayer Relief Act, carrying a one-year doc fix, a stack of Medicare and Medicaid extenders, and the repeal of an entire ACA program. The Senate passed it January 1. The House concurred January 1. The President signed it January 2, one day before the new Congress arrived.

2014: the cromnibus, 219 to 206, carrying Ebola response funding and ACA modifications.

2016: the 21st Century Cures Act, 392 to 26, with $4.8 billion for NIH, $1 billion in opioid grants, FDA reform, and a restructured federal mental health apparatus.

2018: the farm bill’s nutrition and rural health provisions, plus a dozen standalone health laws, maternal mortality, sickle cell, rural health offices, cleared by voice vote in three December weeks.

2020: the Consolidated Appropriations Act, 327 to 85, carrying the No Surprises Act, one of the most consequential healthcare laws of the decade, plus mental health telehealth expansion and the full extender stack.

2022: the year-end omnibus, 225 to 201, making 12-month postpartum coverage permanent, rewriting Medicaid eligibility rules for children, and extending CHIP.

2024: the American Relief Act, 366 to 34 with one voting present, under suspension, carrying community health center funding, the National Health Service Corps, telehealth, hospital-at-home, DSH relief, the entire life-support apparatus Part Two cataloged.

Eight lame ducks.
Eight harvests.

This is the operating rhythm of American healthcare law, and the people who write the December packages plan for it the way farmers plan for October.

When December’s package posts, history says you may have hours before the vote. Readers of this series will have had months.

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One bill.

Of everything pending in Washington, one bill carries a consequence neither party can ignore: the bill that prevents a funding lapse on September 30.

Twelve spending bills fund the government for FY2027. Three passed the House. Nine wait in line. The Senate Appropriations Committee had not begun.

The math does not close.
Everyone in the building knows the math does not close.

So one vehicle will dominate everything Congress tries to finish before the election: a continuing resolution, the stopgap that keeps the lights on. Leadership can argue over its length, its contents, and its votes. It cannot make September 30 disappear.

Congress has missed this deadline before, and paid for it with a 43-day shutdown last fall. Both parties remember.

And in a town where nothing else must move, the one bill that must move becomes the most valuable real estate in American law.

The vehicle eventually has to move.
The fight is over what gets bolted to it.

IN TODAY’S ARTICLE:

• Twelve spending bills fund the government. Three passed the House. The Senate had not begun. One stopgap will substitute for all of it.

• The continuing resolution is the only vehicle with a deadline strong enough to force action before November, which makes it the most valuable real estate in American legislation.

• Healthcare policy travels as freight. The No Surprises Act was included in a spending package in December 2020. The pattern repeats every year.

• Part Two of How a Bill Really Dies: most bills miss the train. Learn to read the one that leaves the station.

Glossary at the bottom of today’s article.

THE ONLY DEADLINE CONGRESS RESPECTS

FY2027 begins October 1. Current appropriations expire on September 30, and without new funding authority, the Antideficiency Act requires affected agencies to begin shutdown procedures. That is not a norm or a tradition. It is statute.

Most deadlines in Washington bend. Authorizations lapse, and programs limp along. Reports come in late. Hearings get postponed. The funding deadline carries the consequence leadership fears most: an immediate, visible government shutdown, five weeks before an election.

House appropriators have already introduced a stopgap, months before the deadline, and said so in their own press release. Whether it moves in July or September, the destination is the same, because three of twelve bills is not a budget.

The highway and transit authority expires on the same day. So do a stack of farm programs. The stopgap is the natural tow for those extensions, though nothing boards until leadership says so. The House-introduced proposal, notably, runs through December 4. Apply that date to everything below.

One locomotive.
Many cars.

MUST-PASS MEANS MUST-CARRY

The mechanism is simple.

A must-pass bill is a bill leadership cannot afford to fail. Members know it. Lobbyists know it. So provisions with no path of their own, the ones that would die in committee or lose a floor vote or never get a hearing, apply for a seat on the train.

If your provision passes the boards, it becomes law without a separate final floor vote. Some freight arrives with years of committee hearings behind it; the No Surprises Act did, and some arrives with none, but the last vote either kind faces is the package’s. Members do vote against these bills, and the government has shut down over them. The freight gets the package’s verdict instead of one of its own.

Healthcare rides this train constantly.

Congress passed the No Surprises Act as part of a year-end spending package in December 2020. One of the most consequential healthcare laws of the decade, and it traveled as freight.

The Consolidated Appropriations Act of 2026 carried Section 6702, “Full rebate pass through to plan,” requiring PBMs to remit “100 percent of rebates, fees, alternative discounts, and other remuneration” to ERISA health plans, effective for calendar-year plans January 1, 2029.

A provision with consequences this publication will spend a series unpacking. The pattern is decades old, and it means the question that matters is never the one the press asks. The press asks whether a bill has the votes. The lobby asks whether it has a seat.

Come September, one document decides which healthcare provisions become law this year.

You can learn to read it in ten minutes, or you can find out what it carried in a press release written by the people who loaded it.

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Twenty days.

The House convenes July 20 through July 23.
Then it leaves.

It returns August 31 through September 3. September 14 through 17. September 22 through 25. September 28 through October 1.

Then it goes home to campaign.
No scheduled session until November 9.

Count it.
Twenty scheduled session days between now and the election.

Twelve annual spending bills remain unfinished through both chambers. Nine have never passed the House floor. The Senate Appropriations Committee has not begun formal consideration of bills.

Current discretionary funding expires on September 30.

And on September 14, the same day the House gavels back in, public comments close on the proposed rule that sets Medicare’s payment policies for physician services next year.

The rule closes for comments the same day the House opens its second September work period, deep in the final sprint before the election. Both clocks run at once, and only one side is watching both.

Twenty days.
That number decides everything else you read about Washington this year.

IN TODAY’S ARTICLE:

• Congress announced its 2026 work schedule in November 2025. It is a confession, and almost nobody treats it like one.

• The House has 20 scheduled session days left before Election Day. Twelve spending bills, a defense authorization, and every healthcare priority you care about compete for those days.

• The large-system lobby shops I watched built their 2026 strategy around this calendar when it was posted. Physicians meet the fee schedule at the comment deadline, between patients.

• This is Part One of How a Bill Really Dies. The first cause of death is the simplest: the bill runs out of days.

Glossary at the bottom of today’s article.

THE MOST HONEST DOCUMENT IN WASHINGTON

The House Majority Leader announced the 2026 calendar on November 18, 2025, revised since, most recently in March. The Senate posted its schedule the same week. Anyone can download them. They are public, free, and ignored.

They are also confessions.

The calendar tells you, months in advance, which promises the floor time cannot keep. A five-year highway bill needs a bicameral agreement that takes longer than the days available. The calendar knew in November. A full farm bill needs an introduced Senate bill, and none exists. The calendar knew. Twelve appropriations bills through both chambers before September 30, with a five-week August recess in the middle. The calendar answered that question in November.

Schoolhouse Rock taught you that a bill becomes a law through committees, floor votes, and a signature. The cartoon left out the part where the bill sits in a queue behind thousands of other bills, and the queue only moves 20 more days this year.

Most legislation dies of nothing.
No dramatic vote.
No veto.
No headline.
It waits in line, and the line closes.

WHAT THE QUEUE LOOKS LIKE RIGHT NOW

Twenty days is not twenty opportunities. Leadership already knows which bills control the floor. The lobby shops already know which deadlines create vehicles. Everyone else is still writing stand-alone legislation for a calendar that has no room for it.

Bills do not merely compete for votes. They compete for vehicles, deadlines, and leadership time. The interests that read the calendar first enter that competition months ahead.

Here is what is lined up for those 20 House days.

All twelve FY2027 appropriations bills cleared the House Appropriations Committee. Three have passed the House floor. The Senate Appropriations Committee has not begun. Absent new appropriations or a stopgap, agencies without other funding authority begin shutdown procedures on October 1.

The FY2027 defense authorization failed a Senate procedural vote, 50-46, on July 14. A setback, and a preview of Part Five of this series.

Highway and transit authority expires September 30. The replacement bill cleared committee in May and has never seen the House floor.

The farm bill passed the House in April. The Senate has a discussion draft and no bill.

A budget blueprint cleared the House Budget Committee on July 16, permitting four committees to write legislation adding up to $95 billion to deficits. It has not passed either chamber.

Each of these collects leadership floor time ahead of any stand-alone Medicare bill.

So when the funding cliff arrives, the likeliest outcome is the one the calendar predicted in November: a stopgap, with the expiring transportation and farm programs among the natural candidates for a tow, and the real decisions pushed past the election. The House-introduced proposal already runs through December 4.

Which brings us to the part of the calendar nobody talks about.

Congress posted its 2026 calendar last November.
One side of the healthcare economy planned its year around it.
Read what the other side reads.

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