The Show on KJZZ

Listen live weekdays at 9 a.m.

Health-care systems scrambling for cash after cyberattack on medical technology companies

Published: Thursday, March 21, 2024 - 10:51am
Updated: Friday, March 22, 2024 - 10:01am
Audio icon Download mp3 (10.74 MB)

The effects of a month-old cyberattack that hit one of the country’s largest medical technology companies is still unresolved, leaving Arizona, and other states’ health-care systems, scrambling for cash.

Arizona Medical Association CEO Libby De Bie says Change Healthcare has restored only some services.

“The areas where there are still significant challenges have to do with claims processing, which ultimately is around making sure that provider offices, medical offices, get paid for the services they provide," De Bie said.

Her group says local physician practices have reported weeks without payment from the Centers for Medicare & Medicaid Services and private insurance companies. Some clinics are resorting to personal funds to make payroll.

Her group has put pressure on local insurance providers, regulatory agencies and government officials to find immediate solutions.

Becker's Health IT estimates the incident has impacted more than 90% of U.S. hospitals and resulted in more than $6 billion in delayed payments.

The Show talked about this with Jim Hammond, publisher and CEO of the Hertel Report, a newsletter and website about the health-care industry.

Interview highlights

How significant of an attack would you say this is?

JIM HAMMOND: Oh, it's huge. It's absolutely huge. It's very rare to find a health-care provider that doesn't have some sort of relationship with Change Healthcare.

And let's just sort of define our terms because Change Healthcare, I think is a company that maybe a lot of folks haven't heard of. They're owned by United Healthcare, but what exactly do they do?

HAMMOND: Well, they are owned by United Healthcare. United Health Group is actually the big, the big corporation that, that is on the stock exchange, UHG. UHG owns United Healthcare, which is a large insurance company. Everybody knows who they are. And then they also own Optum Healthcare, which is a a technology and administrative company that works in the health-care industry and supports both providers and insurance companies, not just United Healthcare, but other insurance companies. And then they recently bought Change Healthcare, which is what we call a, a clearing house and an eligibility organization. And they also impact claims payment.

So what exactly did the hackers do, and what did they get?

HAMMOND: Well, I don't really know a lot about that. That has not been a lot of, what has been covered here is what did they take. But they, what they were looking for is the same stuff that they look for from all health-care breaches. And that is patient information, Social Security numbers, addresses, other identifiers that they can use in, in other types of, of criminal activity. So they, they were looking for information, but what it does is it means in order to fix that and, and get through that hack, the organization has to shut down. And so the shutting down is really, what's the problem here. Is that Change Healthcare has had to shut down for over a month now. And so it's really starting to impact the providers of health care and the insurers. Really all of us.

If they shut it down, a lot of things can't happen. One of them, it seems is that there are some number of providers just not, not getting reimbursed for the care they're providing.

HAMMOND: Sure, claims payment is a big part of this. Claims require a number of things to happen before the a claim is paid first. You need to know is the patient on that plan is, you know, what's the eligibility, and Change Healthcare is one of the major eligibility and enrollment vendors that, that providers use.

[For example,] Mrs. Jones shows up. She has an ID card. The ID cards don't have dates on them and so you still have to go and check and that. When you say let's go and check and see if Mrs. Jones has eligibility, they go to Change Healthcare to do that. And if Change Healthcare doesn't have that information, then we, the, the provider really doesn't know if that person is covered or not. And then you get into things like authorizations. Do they have that kind of plan that covers that type of benefit? And then even after that, it's, OK, well, now we've provided the benefit. Well, where does the claim go? Because these huge insurance companies have more than one claim center. And even though it's electronic, you still have to decide which place to send that claim. And there are many different payer IDs that are identified in Change Healthcare that say, "OK, that claim goes to United's claims processing in Texas, and that claim goes to that different claim goes to a processing center in New York." So where these claims are supposed to go is also being impacted.

So are patients in some cases not able to get the kind of care they need because their providers can't prove that they have insurance and the kind of insurance that will cover a particular procedure?

HAMMOND: Absolutely, yes. So some providers have said, "Hey, we're look, we're gonna wait until we know." So they've delayed treatments. And you know, sometimes these things are fixed in a matter of a couple of days and sometimes the, in this case, it's been over a month. So there's a lot of care that's been delayed. And it probably will happen, but there are, you know, there's impacts to people delaying care. So it's, it's definitely impacting the providers and the patients, and delayed care is probably the biggest, the biggest issue.

Is there a concern that some providers might have to close up shop if they're continuing to treat patients and not getting reimbursed for that?

HAMMOND: Sure. That's, that's kind of the doomsday scenario, is that this lack of cash flow impacts the provider to such a degree that they have to shut down. But there's been a lot of progress made in the last couple of weeks to make sure that that doesn't happen. The hospital associations and the government, CMS and Health and Human Services, have both come out and asked the health plans to go ahead and pay providers even though they don't really have claims. And I've talked to a number of providers that have had some success approaching the plans and saying, "Hey, look, you normally pay us about $50,000 a month. We know that we're taking care of these patients, but we can't bill you. So would you just pay us $50,000 and we'll figure it out later?" And, and some of the plans are, are doing that.

More stories from KJZZ

Listen to Jim Hammond's interview with host Mark Brodie on The Show