An urgent care chain in Ohio could be forced to stop paying rent and other bills to cover salaries. In Florida, a cancer center is competing for money for chemotherapy drugs to avoid delaying critical treatments for its patients. And in Pennsylvania, a primary care doctor is cutting expenses and putting all of her money together (including her personal money in the bank) in hopes of staying afloat for the next two months.
These are just a few examples of the severe cash crunch facing healthcare providers – from large hospital networks to smaller clinics – following a cyberattack two weeks ago that crippled America’s largest billing and payment system in the country. The attack forced the shutdown of parts of the electronic system operated by Change Healthcare, a major unit of UnitedHealth Group, leaving hundreds, if not thousands, of providers without the ability to obtain insurance approval for services ranging from prescribing medications to a mastectomy. or be paid for those services.
In recent days, the chaotic nature of this widespread breakdown of often invisible daily transactions has led top lawmakers, powerful hospital industry executives and patient groups to pressure the U.S. government for help. On Tuesday, the Department of Health and Human Services announced it would take steps to try to ease financial pressures on some of those affected: Hospitals and doctors who receive reimbursements from Medicare would primarily benefit from the new measures.
U.S. health officials said they would allow providers to ask Medicare for accelerated payments, similar to advanced funds available during the pandemic, to get by. They also urged health insurers to waive or relax much-criticized rules requiring prior authorization that have become impediments to receiving 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 was unclear whether these initial government efforts would close gaps left by the still-offline mega-operations of Change Healthcare, which acts as a digital information clearinghouse linking to doctors, hospitals and pharmacies. to insurers. It manages up to one in three patient records in the country.
The hospital industry criticized the response, calling the measures inadequate.
Beyond news of the damage caused by another cyberattack on the healthcare sector, the shutdown of parts of Change Healthcare brought renewed attention to the consolidation of medical companies, physician groups and other entities under UnitedHealth Group. United’s acquisition of Change in a $13 billion deal in 2022 was initially challenged by federal prosecutors but went ahead after the government lost the case.
So far, United has not provided any timeline for reconnecting this critical network. “Patient care is our top priority and we have multiple solutions to ensure people have access to the medications and care they need,” United said in an update on its website.
But on March 1, a bitcoin address connected 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 made by United to the group, according to a news article in cabling. United declined to comment, as did the security company that initially detected the payment.
Still, the lingering effects of the attack have once again exposed the vast interconnected networks of electronic health information and the vulnerability of patient data. Change handles about 15 billion transactions a year.
The closure of some of Change’s operations has cut its digital function in connecting providers with insurers in sending invoices and receiving payments. That has delayed tens of millions of dollars in insurance payments to providers. Pharmacies were initially unable to fill many patients’ medications because they could not verify their insurance, and providers have racked up large sums of unpaid claims in the two weeks since the cyberattack occurred.
“This absolutely highlights the fragility of our health care system,” said Ryan S. Higgins, an attorney at McDermott Will & Emery who advises health care organizations on cybersecurity. The same entity said to be responsible for the cyberattack on the Colonial Pipeline, a Texas-to-New York oil pipeline that carried 45 percent of the East Coast’s fuel supplies, in 2021 is believed to be behind the Change attack. “Historically they have targeted critical infrastructure,” he said.
In the early days after the Feb. 21 attack, pharmacies were the first to have difficulty filling prescriptions when they couldn’t verify a person’s insurance coverage. In some cases, patients could not get medications or vaccines unless they paid cash. But they have apparently solved these problems by turning to other companies or developing alternative solutions.
“In almost two weeks, the operational crisis is over and virtually over,” said Patrick Berryman, senior vice president of the National Community Pharmacists Association.
But as the shutdown drags on, doctors, hospitals and other providers are struggling to pay expenses because steady streams of revenue from private insurers, Medicare and Medicaid simply aren’t coming.
Arlington Urgent Care, a chain of five urgent care centers in Columbus, Ohio, has about $650,000 in unpaid insurance refunds. Worried about cash, the chain’s owners are weighing how to pay bills, including rent and other expenses. They took out lines of credit from banks and used their personal savings to save enough money to pay employees for about two months, said Molly Fulton, director of operations.
“This is worse than when Covid hit because even though we didn’t get paid for a while, at least we knew there was going to be a solution,” Ms. Fulton said. “There is simply no end in sight here. I have no idea when the Shift will arise again.”
The hospital industry has called Change’s infiltration “the largest cyberattack on the U.S. healthcare system in American history” and urged the federal government and United to provide emergency funding. The American Hospital Association, a trade group, has sharply criticized United’s efforts so far and the latest initiative that offered a loan program.
“It’s a far cry from plugging the gaping holes in funding,” Richard J. Pollack, president of the trade group, said Monday in a letter to Dirk McMahon, the president of United.
“We need real solutions, not programs that sound good when advertised but are fundamentally inadequate when you read the fine print,” Pollack said.
The loan program has not been well received in the country.
Diana Holmes, a therapist in Attleboro, Massachusetts, received an offer from Optum to lend her $20 a week when she says she hasn’t been able to file about $4,000 in claims for her job since February 21. “It’s not that we have reservations,” she said.
She says there has been virtually no communication from Change or her patients’ primary insurer, Blue Cross of Massachusetts. “It’s been maddening,” she said. She has been forced to look for a new payment clearinghouse with an upfront fee and a one-year contract. “We had to pivot quickly without information,” she said.
Blue Cross said it was working with providers to find different solutions.
Florida Cancer Specialists and Research Institute in Gainesville has tapped 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 recover or collect the double expenses that we’re going to have by having multiple clearinghouses.”
Dr. Christine Meyer, owner and operator of a 20-doctor primary care practice in Exton, Pennsylvania, west of Philadelphia, has stacked “hundreds and hundreds” of pages of Medicare claims into a FedEx box and shipped them to the agency. Dr. Meyer said she was weighing how to conserve cash by cutting expenses, such as possibly reducing the supply of vaccines the clinic has on hand. She said that 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 temporary financial assistance program, Dr. Meyer said she received a $4,000 loan, compared to about half a million dollars she normally 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 this is resolved,” Dr. Meyer said. “It’s all a joke.”
The hospital industry has been lobbying Medicare officials and lawmakers to address the situation by freeing up cash for hospitals. Senator Chuck Schumer, Democrat of New York and the House majority leader, wrote a letter on Friday, urging federal health officials to make expedited payments available. “The longer this disruption lasts, the more difficult it will be for hospitals to continue providing comprehensive healthcare services to patients,” he said.
In a statement, Senator Schumer said he was pleased with the HHS announcement because it “will keep cash flowing to providers as our health care system continues to reel from this cyberattack.” He added, “Work cannot stop until all affected providers have sufficient financial stability to weather this storm and continue serving their patients.”
Audio produced by Jack D’Isidoro.
