An urgent care chain in Ohio may be forced to stop paying rent and other bills to cover wages. In Florida, a cancer center is struggling to find money for chemotherapy drugs to avoid delaying critical treatments for its patients. And in Pennsylvania, a primary care physician is cutting expenses and pooling all its cash — including its personal bank reserve — in hopes of staying afloat for the next two months.
These are just a few examples of the severe cash squeeze facing health care providers — from large hospital networks to smaller clinics — in the wake of a cyberattack two weeks ago that paralyzed the nation’s largest U.S. billing and payment system. The attack forced the shutdown of parts of the electronic system operated by Change Healthcare, a large unit of UnitedHealth Group, leaving hundreds, if not thousands, of providers without the ability to get insurance approval for services ranging from prescription drugs to mastectomies — or get paid for these services.
In recent days, the chaotic nature of this major collapse of everyday, often invisible transactions has led top lawmakers, hospital industry powerhouses and patient groups to press the US government for relief. On Tuesday, the Department of Health and Human Services announced that it will take steps to ease financial pressures on some of those affected: Hospitals and doctors who receive Medicare reimbursements will mainly benefit from the new measures.
US health officials have said they will allow providers to apply to Medicare for accelerated payments, similar to advanced funding made available during the pandemic, to end them. They also called on health insurers to drop or relax much-criticized pre-authorization rules that have become barriers to getting care. And they recommended that insurers offering private Medicare plans also provide advanced financing.
HHS said it was trying to coordinate efforts to avoid disruptions, but it remained unclear whether those initial government efforts would bridge the gaps left by the still-offline majors of Change Healthcare, which acts as a digital clearinghouse that connects doctors, hospitals and pharmacies. to insurers. It manages up to one in three patient records in the country.
The hospital industry has been critical of the response, calling the measures inadequate.
On top of news of the damage caused by another healthcare cyberattack, the shutdown of parts of Change Healthcare has renewed attention on the consolidation of medical companies, physician groups and other entities under UnitedHealth Group. United’s takeover of Change in a $13 billion deal in 2022 was initially challenged by federal prosecutors, but was completed after the government lost its case.
So far, United has not provided any timeline for reconnecting this critical network. “Patient care is our top priority, and we have multiple ways of responding to make sure people have access to the medicines and care they need,” United said in an update on its website.
But on March 1, a bitcoin address linked to the alleged hackers, a group known as AlphV or BlackCat, received a $22 million transaction that some security firms say was likely a ransom payment from United to the group, according to a news article in Wired. United declined to comment, as did the security company that originally detected the payment.
However, the lingering effects of the attack have once again exposed the vast interconnected webs of electronic health information and the vulnerability of patient data. The exchange handles about 15 billion transactions annually.
The shutdown of some of Change’s operations has disrupted its digital role of connecting providers with insurers to submit bills and receive payments. This has delayed tens of millions of dollars in insurance payments to providers. Pharmacies were initially unable to cover many patients’ medications because they could not verify their insurance, and providers have racked up large amounts of unpaid claims in the two weeks since the cyberattack occurred.
“It absolutely highlights the fragility of our healthcare system,” said Ryan S. Higgins, an attorney at McDermott Will & Emery who advises healthcare organizations on cybersecurity. The same entity said to be responsible for the 2021 cyberattack on the Colonial Pipeline, a pipeline from Texas to New York that carried 45 percent of the East Coast’s fuel supplies, is believed to be behind the Change attack. “They have historically targeted critical infrastructure,” he said.
In the first days after the Feb. 21 attack, pharmacies were the first to struggle to fill prescriptions when they couldn’t verify a person’s insurance coverage. In some cases, patients could not get drugs or vaccines unless they paid in cash. But apparently they’ve worked around those hurdles by turning to other companies or developing solutions.
“Almost two weeks in now, the business crisis is over and almost over,” said Patrick Berryman, senior vice president of the National Association of Community Pharmacists.
But as the shutdown grows, doctors, hospitals and other providers are struggling to pay costs because steady revenue streams from private insurance companies, Medicare and Medicaid just aren’t flowing.
Arlington Urgent Care, a chain of five urgent care centers around Columbus, Ohio, has about $650,000 in unpaid insurance claims. Worried about cash, the chain’s owners are weighing how to pay the bills — including rent and other expenses. They took out lines of credit from banks and used their personal savings to set aside enough money to pay employees for about two months, said Molly Fulton, the chief operating officer.
“This is worse than when Covid hit because even though we didn’t get paid for a while even then, at least we knew there was going to be a solution,” Ms Fulton said. “Here, there’s just no end. I have no idea when Change is coming back.”
The hospital industry has called Change’s intrusion “the most significant cyberattack on the US healthcare system in American history” and urged the federal government and United to provide emergency funding. The American Hospital Association, a trade group, has been sharply critical of United’s efforts so far and its latest initiative to offer a loan program.
“We are a long way from closing the funding gaps,” Richard J. Pollack, president of the trade group, said Monday in a letter to Dirk McMahon, United’s chairman.
“We need real solutions – not programs that sound good when announced but are fundamentally inadequate when you read the fine print,” Mr Pollack said.
The loan program was not well received in the country.
Diana Holmes, a therapist in Attleboro, Mass., received an offer from Optum to loan her $20 a week when she says she hasn’t been able to submit about $4,000 in claims for her work since Feb. 21. “It’s not like we have reserves,” he said.
She says there has been virtually no communication from Change or the primary insurer for her patients, Blue Cross of Massachusetts. “He’s just crazy,” she said. He had to find a new payment clearinghouse with an upfront payment and a one-year contract. “It had to be turned around quickly without information,” he said.
Blue Cross said it is working with providers to find different solutions.
Florida Cancer Specialists and Research Institute in Gainesville has resorted to new contracts with two competing clearinghouses because it spends $300 million a month on chemotherapy and other drugs for patients whose treatments cannot be delayed.
“We don’t have that kind of money in a bank,” said Dr. Lucio Gordan, president of the institute. “We’re not sure how we’re going to recoup or collect the duplicate costs we’re going to have by having multiple clearinghouses.”
Dr. Christine Meyer, who owns and operates a 20-clinician primary care practice in Exton, Pa., west of Philadelphia, has piled “hundreds and hundreds” of Medicare claims pages into a FedEx box and sent them to the agency. Dr. Meyer said she thought about how to save cash by cutting expenses, such as possibly reducing the clinic’s supply of vaccines. She said if she pooled all her cash and her line of credit, her practice could survive for about two and a half months.
Through Optum’s interim funding program, Dr. Meyer said he received a $4,000 loan, compared to the roughly half a million dollars he typically submits through Change. “That’s less than 1 percent of my monthly claims, and to add insult to injury, the notice came with this big red font that said, you have to pay this all back when it’s resolved,” Dr. Meyer said. “It’s all a joke.”
The hospital industry is pushing Medicare officials and lawmakers to address the situation by freeing up cash for hospitals. Sen. Chuck Schumer, Democrat of New York and House Majority Leader, wrote a letter Friday urging federal health officials to make fast payments available. “The longer this disruption persists, the more difficult it will be for hospitals to continue to provide comprehensive healthcare services to patients,” he said.
In a statement, Senator Schumer said he was pleased with HHS’s announcement because it “will ensure cash flow to providers as our health care system continues to reel from this cyberattack.” He added, “The work cannot stop until all affected providers have sufficient financial stability to weather this storm and continue to serve their patients.”
