On Feb. 21, Change Healthcare, owned by insurance giant UnitedHealth Group, said it suffered a cyberattack. The company is an important part of the U.S. health care system, processing billions of transactions annually and matching up bills with insurance coverage.
The attack has paralyzed health care payments, impacting hospitals and patients in Florida and the U.S. The American Hospital Association called it the most significant cyberattack against the country’s health care system in history.
“If this was against the country's electrical grid, we would immediately understand it," said Mary Mayhew, president and CEO of the Florida Hospital Association. "If we were talking about aviation control towers, we would immediately understand the magnitude, the implications. That is what this is, the country's largest cyberattack on our health care delivery system.”
Mayhew, who spoke about the cyberattack Friday on "The Florida Roundup," said the association has over 100 hospitals that directly contract with Change Healthcare.
“The fact of the matter is hospitals are unable to bill for care that's been provided. And when they don't have cash flow, that affects their payroll, their ability to pay their doctors, their nurses, their staff throughout their operations,” Mayhew said.
She noted association members will have to start delaying payments to vendors due to the lack of cash.
“We're talking hundreds of millions of dollars not being paid by insurance companies, United being the biggest, but many other insurance companies that also depend on Change Healthcare to process their payments to hospitals, unable to make payments,” she said.
Mayhew noted how, one month following the cyberattack, that dollar amount could exceed $1 billion.
She continued: “There are certainly hospitals that will lean into their reserves, if necessary, if it gets to that point. But the smaller you are as a hospital, you have a razor-thin margin, your cash flow is already constrained. This is going to be fuel on the fire.”
Change Healthcare also shares a relationship with state government and Medicaid programs.
“They're doing a lot of processes for state government around eligibility determinations, long-term care assessments, and that's not getting a lot of attention or visibility as well. So the ripple effect, the domino effect, is significant,” Mayhew said.
That domino effect is felt directly by patients, with people unable to get life-saving medications or paying out-of-pocket for them.
Mayhew also said there’s no doubt patient data has been breached from the cyberattack. But she noted patients shouldn’t be alarmed or concerned when it comes to accessing care.
“If you've got scheduled procedures, if you need to go to your doctor, if you need to come to the emergency department, not one thing should stand in the way of patients doing that and having confidence in getting the services that they need,” she said.
On Thursday, UnitedHealth Group released a timeline to restore Change Healthcare’s systems and services. As of now, electronic prescribing with claim submission and payment transmission is back online. The group said it’s working to get patients their prescriptions in the meantime.
The company’s electronic payments platform will be available starting Friday, according to the timeline. It expects to start testing and reestablishing connectivity to its medical claims network March 18. Service will be restored through that week.
Mayhew said indications show the cash crunch will go on for several more weeks, and even when the system starts working again, it’s not guaranteed it will go smoothly.
“At some point, it may come to the fact that hospitals have to deal with rescheduling those procedures, just as we did at the beginning of the (COVID-19) pandemic, electives that can safely be postponed," Mayhew said. "We are not there yet. And hospitals are so reluctant to go there. But at the end of the day, if we can't get financial relief from the federal government, from advance payments, from Medicare, from additional financial relief from Congress, that is going to be part of the equation.”
Regarding advance payments, a March 5 press release from the U.S. Department of Health and Human Services said, “facilities may submit accelerated payment requests to their respective servicing (Medicare Administrative Contractors) for individual consideration.”
Optum, part of UnitedHealth Group, also launched a loan program called the Temporary Funding Assistance Program. The group said it offers cash flow for providers who received payments from payers processed by Change Healthcare. But Mayhew said, according to one hospital, the program covers just 2% of the typical net payments from United.
Others, including the Medical Group Management Association, are pushing for the government to offer accelerated payments to physician practices. Mayhew said these practices and other health care providers are particularly impacted by the cyberattack.
“And they're smaller, they've got less flexibility to go without payments. Hospitals get paid every single day through these claims-processing clearinghouses, they build their budgets around those daily payments," Mayhew said. "They've got a little more cushion to weather the storm. But the smaller ones, as I said, likely not.”
The cyberattack also speaks to the vulnerability of the U.S. health care system. Mayhew called it an attack on the country’s infrastructure.
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