Payment Disruptions: Check Your Bank Deposits Now (the Change Healthcare Cyberattack)

The recent Change Healthcare hack is about more than just getting your claims to the payors or having prescriptions work. It's also about the payments making it to your bank account.  Paul Vanchiere and I are going to discuss this, and quite a bit more, on our webinar this week.

The Change Healthcare Cyberattack

Unless you've been on a great vacation, you are aware that on Feb 21, 2024, one of the key players in our healthcare infrastructure, Change Healthcare, was the victim of a massive cyberattack, forcing them to pull down their systems.  The media took notice of this quickly and has largely focused on the issue that affects patients: the inability to fill prescriptions at pharmacies who use Change as their payment management vendor (like...Vermont Medicaid).  For most of America, the Change breach meant that some people couldn't fill prescriptions the last few weeks.  That's a big deal, to be sure.

But on the physician side of things, there is a lot more to it.  And as we peel back the onion, I'm starting to worry that this cash flow, and therefore practice viability, will be worse than COVID for some practices if they aren't careful.  Let's explore why.

Aside: I'm ignoring some giant issues for the moment.  Like the anti-trust discussion (how can a giant insurance company be allowed to grow like an infected octopus so that a single ransomware attack could harm so many people?).  Or the fact that clearly millions of patient clinical records are now in the hands of Russian hackers?  For another day.

Impact on claim processing

Back to our plotline.   For physicians, the bigger impact of the Change breach has been claim routing.  That is, the process that we all use to get your daily claims from your office to your payors.  Change Healthcare is used, sometimes exclusively, as a clearinghouse all over the country.  Depending on your EHR vendor, your clearinghouse choices, and your payor mix, you may have had no apparent trouble getting your claims to the payors.  Or you may have noticed that your claims stopped being acknowledged.  If you used Change directly as your clearinghouse, your claims weren't even going out.  For the record, the impact on eligibility, labs, etc., has also been significant.  People have been harmed by this breach.  If you want a sense of how deep and infected the Change tentacles are, check their "Solution Status" page and note how many places they show up in our industry.  And how many are still down.

Back to the money.  PCC pays specific attention to all of this because we operate as the clearinghouse for our clients' claims.  We process >$1b of claims a year and we are tiny tiny compared to our competitors.  We could see that millions of dollars of claims were not getting to the payors properly.  The heroes of PCC's claim team have been able to reroute many of the claims already to avoid Change, but it's not entirely possible to do because some payors require Change for claims to be submitted. [Weird things happen when insurance companies also own the clearinghouses, eh?]

In theory, and according to UHG, the claims delivery issue is largely fixed - 85% as of this point, iirc - and they expect to clean the rest up next week.  So maybe cash slows a little and then there's a big burp and the indigestion is cleared.  Right?

Impact on payment processing

Here's the curveball and why I was up late last night.  I was naive and didn't think things through.  I didn't realize that Change managed more than just the delivery of claims.  They also manage the delivery of ERAs and the money to your bank account.  We started to put it together when we heard from a client that their Managed Medicaid plan had received the practice's claims just fine...but because they use Change to "manage the payments" they haven't been able to get checks out since Feb 21.

I'm about to enter HEARSAY AND SPECULATION MODE right now.  I want to make very clear that I don't have all the information, I don't know what's going on.  But some of the buttons on my console are flashing red and I want to keep an eye on this.  I, like you, very much still have PTSD from March -> August 2020 and I don't want to deal with this again.  But here we go:

  • I've received multiple reports of practices receiving ERAs/EOBs for claims, but without the money being deposited in their accounts.
  • I've received reports from practices suggesting that some deposits slowed down before Feb 21 (this has not been verified yet, that's why I was up late)
  • We have direct correspondence from payors and Change that payment systems are disrupted, though they expect to have those fixed shortly.

Here's my concern.  When COVID hit, everyone had cash flow plummet - 70% on average for a week or two, but then a recovery that lasted about 8-10 weeks.  During that time, however, volume was also down.   Many of you were able to send staff home to some extent, or talk to your landlords, and there was federal help remarkably quickly.  Most importantly, your vaccine volume dropped tremendously.

But you've been at full steam this entire time.  And you are about to get vaccine bills just as the claims you submitted 2-3 weeks ago may not get paid because they didn't go through or, if they did, you won't get a check for them.  

In other words, I think some practices will face a massive cash flow crunch in the next 2-4 weeks depending on their payor mix, payroll/vaccine expenses, clearinghouse choices, and Change's ability to get things on track.   You all learned the giant lesson from COVID, right?  To have enough cash to cover your bills?  

What should you do right now?

  • Check your bank deposits daily until this goes away.
  • Confirm that you have money deposited before you post payments in your billing system.
  • Call the bank and make sure your LoC will cover any potential divots for a few weeks.  Don't have a LoC?  Start the paperwork.
  • Consider holding those owner distributions until you know what your cash looks like.
  • Check with your major payors to see if how they are affected for both claim and payment delivery.  You may already know the former, but do you know the latter?
  • Consider applying for the Temporary Funding Assistance program from UHG, though this advice comes with some huge caveats, as it's a program from United itself.  Our anecdotal evidence so far says that it's too little, too hard, and may make things worse...I'll update as I learn more.  Update: READ THIS FIRST before you apply!
  • Know that the AAP is on this.  I heard directly from Mark Del Monte that the AAP was part of the meeting with HHS and UHG yesterday and CMS is already working with Medicaid programs on advance payments, etc.  I can't overstate how powerful it is to know that the AAP is working on this daily.
  • Sign up for the monthly webinar from Paul and me that happens tomorrow night!
  • Communicate - here, on SOAPM, on your EHR vendor community, etc., about what you are hearing and seeing.

If all goes well, I'm Chicken Little.  I don't mind.  I remember what I felt on March 13, 2020.  It's 4 years later, to the day.