Frozen payments due to ransomware affect healthcare providers

Healthcare providers in the US are facing significant challenges in receiving payment following a week-long ransomware outage at a crucial technology unit of UnitedHealth Group. Smaller providers are particularly feeling the strain, with some reporting dwindling cash reserves. Additionally, major hospital chains are unable to process payments, leading to upfront financial burdens as they cannot collect payments from patients.

The American Hospital Association (AHA), which represents a vast network of hospitals and healthcare providers, acknowledges the widespread impact of the ransomware attack. Although the full extent of the problem is difficult to determine, reports from six small businesses, including therapists and a laboratory, indicate substantial losses due to the inability to process claims and receive overdue payments.

The disruption stemmed from hackers infiltrating UnitedHealth’s Change Healthcare unit, a critical component of the intricate U.S. insurance claims system. The attack also disrupted electronic pharmacy refills and insurance transactions, forcing some providers to resort to manual paper transactions.

Phil Seubring, legal director at Forensic Fluids in Kalamazoo, Michigan, expressed the severity of the situation, stating they are completely unable to bill at present. Similarly, Jenna Wolfson, a clinical social worker, highlighted the potentially catastrophic impact on small mental health practitioners like herself, with thousands of dollars in pending claims.

While the immediate fallout may affect smaller practices more acutely, larger healthcare institutions will also experience strain if the outage persists. John Riggi, cybersecurity adviser to the AHA, emphasized that although well-resourced hospitals may initially weather the disruption, sustained outages could pose significant challenges to providers of all sizes.

Recovery from high-impact ransomware attacks can be prolonged, with core services taking up to 30 days to restore and additional weeks for less critical functions. The ability of other clearing houses to absorb increased claims traffic remains uncertain, leaving hospitals anxiously awaiting solutions from Change Healthcare.

Last year’s ransomware attacks on companies like Clorox and MGM Resorts International underscore the widespread disruption caused by such incidents, with repercussions felt by customers and suppliers alike. Recovery efforts are contingent upon the extent of the damage and the resources allocated to the recovery process.

UnitedHealth acknowledged the disruption’s impact on payments but did not provide immediate insights into how hospitals are affected by the week-long issue. Dana Hughes, whose family operates a physical therapy practice in Corvallis, Oregon, lamented the lack of available workarounds and highlighted the financial and time costs associated with alternative clearing houses.