Surgeon’s clash with UnitedHealthcare shows insurer’s hardball tactics

Dr. Catherine Mazzola, a pediatric neurosurgeon, runs a practice in Latest Jersey that treats low-income children on Medicaid. Since 2008, she has cared for girls and boys with cerebral palsy, spina bifida and other neurological disorders. 

But now, her practice is in serious jeopardy, she says, due to recent moves by the insurance and health care giant UnitedHealth Group.

The story begins in February 2024, when a unit of UnitedHealth experienced a large hack. The unit, Change Healthcare, shuttered its systems and halted all reimbursements owed to hospitals and doctors like Mazzola. 

To assist providers stay afloat, Optum, one other UnitedHealth subsidiary that features a bank, began offering “temporary,” no-interest loans. Mazzola’s practice was amongst those tapping into this system — it received $535,000, documents show.

The practice began repaying the loans, but in January Optum demanded that it repay the cash in full and inside five business days.

“Our practice is doing the BEST we will,” Mazzola wrote in an email to Optum on Jan. 20. “Please ask the loan collection people to STOP. We’re already in repayment at the utmost possible amount monthly.”

The situation soon got worse. In mid-February, she stopped receiving reimbursements from UnitedHealthcare. By April, her practice was out $78,000, her accountant’s records show, and was struggling to make payroll. 

Mazzola dug into the UnitedHealthcare claims and was shocked to seek out the insurer had drawn up reimbursement checks payable to her practice after which deposited those checks into its own checking account, records shared with NBC News show.

“They try to bankrupt our practice,” Mazzola said. “Now, we’ll do brain surgery and as an alternative of paying us, they are going to take the cash themselves.” 

Bryan Fisher, a spokesman for UnitedHealth Group, the conglomerate that owns the insurer, declined to comment on its actions related to Mazzola’s practice, Latest Jersey Pediatric Neuroscience Institute.  

Her case sheds light on something few patients learn about: the behind-the-scenes battles doctors say they need to wage with insurers over reimbursements and the increasingly aggressive tactics taken by huge payers like UnitedHealthcare. 

Her experience also gives credence, antitrust experts say, to concerns that UnitedHealth Group’s acquisitions of an array of health care operations in recent times have given it an excessive amount of power over patients and the doctors treating them.

“You have got physicians searching for lots of and 1000’s of families, and you have this big corporate entity exerting as much financial power as it may possibly, simply because it may possibly,” said Josh Bengal, staff counsel on the Medical Society of Latest Jersey. “It’s upsetting.”

The hack in February 2024 affected 190 million patients, making it the biggest ever involving medical data. UnitedHealth Group ultimately paid a $22 million ransom to the cybercriminals.

But Mazzola and other doctors said they were assured by the congressional testimony of Andrew Witty, UnitedHealth Group’s former chief executive, who said in May 2024 that the corporate would seek repayment only when borrowers’ businesses were back to normal.

Although Change Healthcare said it restarted claims processing a few month after the breach, doctors who spoke with NBC News said their operations continued to struggle long after, with some saying they’re out tens of millions consequently. Others were forced to shut after being crippled by the lack of income. 

When Optum began demanding repayment of loans in January, it gave borrowers five business days, in accordance with letters reviewed by NBC News. Those that didn’t meet the demands could have their UnitedHealthcare reimbursements withheld as repayment, the letters say.

Mazzola’s practice had promised to submit $10,000 a month until her $535,000 loan was repaid. It was all she could afford, she told Optum in emails reviewed by NBC News. 

Mazzola said an Optum executive told her by phone that her repayments weren’t enough. And in mid-February, UnitedHealthcare began intercepting reimbursements owed to Mazzola’s practice “to repay amounts owed under your agreement with Change Healthcare Operations LLC,” documents show.  

Upon further investigation, Mazzola learned the puzzling way UnitedHealthcare diverted the cash — drawing up checks payable to Mazzola’s practice after which depositing them right into a UnitedHealthcare checking account, the documents show.

“How can United Healthcare claw back money that we’re due for surgeries and office visits?” Mazzola wrote to an Optum executive she had been coping with. 

She received no response, but in April the corporate stopped seizing reimbursements from her practice after she complained to the American Medical Association.

It waded into the fight on April 11, when Dr. James Madara, the AMA’s chief executive, wrote to Roger Connor, the chief executive of Optum Insight, asking that the corporate stop its payment demands. 

“Physician practices are still suffering severe financial distress consequently of the cyberattack nearly 14 months after the breach was first discovered,” Madara wrote. “We wish Optum to honor its commitment to attend to get well repayment for any loans until the physician determines that it’s the appropriate time, since the physicians have relied on Optum’s statements.” 

In an announcement, Optum said it’s working with providers “to discover flexible repayment plans based on the person circumstances of providers and their practices.”

“We have now also worked with UnitedHealthcare to make sure the claims it receives are reviewed in light of the challenges providers experienced, including waiving timely filing requirements for the plans under its control,” it added.

Multiple lawyers interviewed by NBC News reviewed the loan agreement Mazzola’s practice signed and characterised it as a contract of adhesion — wherein one party calls the shots and the opposite has little selection but to agree. The bankruptcy Mazzola and other doctors faced due to hack, an event attributable to inadequate security at Change Healthcare, made the loans much more one-sided, some lawyers said. Because of this, doctors can have legal recourse after the aggressive actions UnitedHealth Group took to extract loan repayments. 

The central query surrounding UnitedHealth Group’s reimbursement actions is “whether or not they abused their use of this treatment by insisting on repayment before it was appropriate for them to accomplish that given the damages that they caused,” Daniel Schwarcz, a professor on the University of Minnesota law school, said in an email. 

Amid its clashes with doctors, UnitedHealth Group announced earnings of $9 billion from operations in the primary quarter of 2025, a 15% jump from the identical period last yr. Revenue for the three months was $110 billion.

Even after Change Healthcare restarted claims processing, doctors who spoke with NBC News said they were never reimbursed for a lot of claims since the disruption meant they couldn’t submit them inside insurers’ required time periods. The doctors also said their costs increased after the hack because they’d to pay staff members to chase reimbursements.

Mazzola, who estimates that her practice lost $1 million due to hack, has asked Optum to reimburse her for costs her practice incurred consequently of the breach. However the terms Optum offered would have barred her from having the ability to sue it due to hack. So she declined to simply accept it.

“I actually believed that Optum, who was orchestrating these loans, would give physicians and physician groups an affordable period of time to repay the loans with the understanding that this financial crisis almost bankrupted us,” Mazzola said. “I mean literally, you are talking about $0 in your checking account, and you’ve 70 employees to pay.” 

Federal antitrust lawyers concerned about possible monopolistic activities have sued health care corporations in recent times. In 2022, two years before the Change Healthcare hack, the Justice Department and the states of Latest York and Minnesota sued to stop UnitedHealth Group’s acquisition of the claims processor, saying it would cut back competition in health care insurance markets. 

Because Change Healthcare dominates the claims clearinghouse business, the federal government argued, its purchase by UnitedHealth Group would give the conglomerate details about how rivals’ insurance policy work, a competitive advantage. 

UnitedHealth disagreed, saying it had strong “firewalls” between units that may prevent sensitive data from being shared throughout the corporate. Optum, the subsidiary that now houses Change Healthcare, would protect external customers’ data from being shared with UnitedHealthcare or its affiliates if the deal went through, the corporate said.

That argument looked as if it would persuade the federal judge hearing the case in Washington, D.C., a Trump appointee. In his October 2022 decision greenlighting the $13 billion Change acquisition, U.S. District Judge Carl J. Nichols cited the corporate’s data-sharing firewalls as weighing “strongly against the federal government’s position.” 

Now, doctors say UnitedHealthcare’s diverting reimbursements to repay Optum loans shows the form of data-sharing the federal government was concerned about.

Hayden Rooke-Ley is senior fellow for health care on the American Economic Liberties Project, a nonprofit, nonpartisan organization that works to curb monopolies. He said UnitedHealth Group’s seizure of doctors’ reimbursements is an example of what happens when an organization coordinates amongst its different subsidiaries for its own purposes.

“These are the styles of conflicts of interest we worry about when an insurance company also owns the payment pipes and a bank,” Rooke-Ley said in an interview.

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

When it added Change Healthcare to its operations in late 2022, Optum said the combined corporations would “profit your entire health system, leading to lower costs and a greater experience for all stakeholders.” 

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

“It was an entire disaster, and to this present day it isn’t corrected,” she said of the hack. “But there hasn’t been any accountability to this goliath Optum.”