Small private practice healthcare providers are feeling the financial strain as vital reimbursement systems stay offline for nine days after Change Healthcare was attacked.
Change Healthcare provides payment and revenue cycle management tools, aiding transactions between healthcare providers and major insurance firms. UnitedHealth Group, its parent company, found a cyberattack on February 21. Upon detection, impacted systems were isolated and disconnected immediately.
Disruption in The U.S. Healthcare System
The outage has prevented doctors from checking patient eligibility and filling prescriptions electronically, adding to the administrative burden on already busy workers. Healthcare providers have also been unable to receive insurance payments, causing revenue cycles to stall.
Smaller and mid-sized practices, dependent on reimbursement cash flow, are grappling with difficult survival choices. If the outage persists, experts warn that some practices may be forced to shut down permanently.
Dr. Purvi Parikh, an allergist, and immunologist in New York City, told CNBC that the breach had been a "mess" and highly stressful in her practice, which is unable to receive reimbursements from insurers for patient visits, making it challenging to cover operational costs such as payroll and medical supplies.
Parikh mentioned that transitioning to a new platform could take weeks, offering no immediate solution.
Change Healthcare has yet to provide updates on system restoration as of Thursday, when Parikh expressed frustration at the lack of answers or solutions, feeling stuck in the situation.
BlackCat Ransomware
Change Healthcare announced on Thursday that the ransomware attack was perpetrated by the group Blackcat, which is also known as Noberus and ALPHV that steals sensitive data from organizations and demands a ransom to prevent its publication, as per a December report from the U.S. Department of Justice.
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Change Healthcare's Law Enforcement and Cybersecurity Collaboration
The company collaborates with law enforcement and third-party consultants, including Mandiant, a subsidiary of Google, and cybersecurity software provider Palo Alto Networks, to evaluate the breach, stating to CNBC that patient care remains their top focus, and multiple solutions have been implemented to ensure continued access to medications and necessary care.
Doctors' Challenges Amid Cyber Attack
Dr. Kiranjit Khalsa, an allergist and immunologist with an independent practice in Scottsdale, Arizona, mentioned that the breach has caused her staff to put in extra hours to handle the increased workload of manually processing prescriptions.
According to her, the most challenging aspect is the reimbursement, contemplating whether to reduce staff hours or close the clinic temporarily to address the situation.
Even when Change Healthcare's systems are restored, Dr. Dan Inder Sraow, an interventional cardiologist with a private practice in Phoenix, Arizona, noted uncertainties about the next steps. It is unclear if Change Healthcare will handle all claim processing or if he must recruit more staff to assist.
Dr. Jesse Ehrenfeld, president of the American Medical Association, has been busy fielding calls from worried colleagues. One oncologist he spoke with has only two weeks' cash reserves. If the outage persists, the practice might be unable to afford the chemotherapy needed for patient treatment. With many providers operating on slim margins, there is a risk that some may close down.
Change Healthcare's Merger
In 2022, Change Healthcare joined forces with Optum, a provider serving over 100 million patients in the U.S., owned by UnitedHealth, the largest healthcare company in the country by market value.
The American Medical Association strongly opposed the merger, stating in a letter to the DOJ that it could limit competition, grant UnitedHealth access to extensive data, and potentially disrupt patient care.
The merger pushed through, but the DOJ is now investigating UnitedHealth for antitrust issues, per a Wall Street Journal report on Tuesday.
