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On February 21, UnitedHealth Group (UHG) disclosed to the Securities and Exchange Commission that it had suffered a “material cybersecurity incident.” That incident was a cyberattack on Change Healthcare, which is a clearinghouse owned by Optum, which is in turn owned by UHG. As a result of the attack, Change was immediately taken offline and remains offline for medical claims processing. UHG recently announced that it expects to “begin testing and reestablish connectivity” for medical claims on March 18, with service being restored throughout that week.
This situation has left medical providers who relied on Change for their claims processing and reimbursement in immediate financial crisis. On March 5, the Department of Health and Human Services (HHS) issued a statement regarding the ongoing situation, which announced actions that the Centers for Medicare and Medicaid Services (CMS) is taking to help providers through this crisis. Those actions included the creation of flexibilities so that providers can switch clearinghouses more easily. CMS will also issue guidance for Medicare Advantage organizations and Part D plans to encourage them to temporarily pause or limit utilization management requirements and timely filing requirements. CMS also contacted every Medicare Administrative Contractor (MAC) to ensure that they are prepared to accept paper claims submissions.
Although these and other actions listed in the March 5 announcement are helpful, the most urgent danger to practices is the lack of liquidity. UHG has set up a Temporary Funding Assistance Program to provide emergency loans via its subsidiary Optum Financial Services. After the initial rollout of the program, many providers took to social media to highlight that the provided loan amounts were inadequate to maintain their operations.
Additionally, the American Hospital Association called out the one-sided, unfavorable terms that providers had to accept to be able to participate in the Optum program. UnitedHealthcare has since rolled out updates to the program, noting that, “For those who receive funding support, there are no fees, interest or other associated costs with the assistance. For repayment, providers will receive an invoice once standard payment operations resume and will have 30 days to return the funds. These terms now apply to both the original and expanded funding programs.” Although this sounds like an improvement, providers are encouraged to scrutinize the details of any agreement they enter into to obtain emergency liquidity, whether via Optum or other funding sources.
CSRO will continue to monitor this situation and provide status updates as appropriate.
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