February cyberattack causes chronic pain for health care industry

When malicious hackers stole data from Change Healthcare and demanded a ransom, providers lost an estimated $100 million per day early on.

The monthslong fallout from a cyber attack continues to roil the health care industry. Back in February, malicious hackers stole data from Change Healthcare and demanded a ransom.

Part of the insurance giant UnitedHealth, Change Healthcare processes insurance claims for hundreds of thousands of medical practices across the country. Providers had no way to submit claims or collect payment and lost an estimated $100 million per day in the early weeks of the outage, according to First Health Advisory.

​Just last week, Jesse Ehrenfeld talked with some of his own doctors about the fallout from the cyber attack.

“I’ve had five medical appointments, including a colonoscopy. None of my physicians have been paid. Nobody,” he said.

Ehrenfeld isn’t just a patient; he’s president of the American Medical Association. Change Healthcare processes between a third and a half of all medical insurance claims in the U.S., he said. The company is still working to get its services running smoothly.

As for health care providers? “They’re having to take extraordinary measures to make payroll and keep their practices afloat, including things like cashing in their retirement accounts.”

Some are even asking their own patients for donations. Farzad Mostashari is CEO of Alidade, a network of 2,000 small, independent primary care providers. Many are still struggling to collect for months of services, he said.

“There’s a liquidity gap where a lot of practices delivered the care, they weren’t able to submit the claims, and now working their way through that backlog is super painful,” he said.

Larger practices aren’t immune either. Molly Fulton is COO at Arlington Health, which operates five urgent care centers around Columbus, Ohio. In the days after the attack, she noticed her company’s claims data wasn’t uploading to the Change Healthcare system like usual.

“It was a full stop,” she said. “Nothing was coming in, nothing was going out.”

Fulton did switch to a different claims processor, but the move was costly. And her company still can’t get paid by some insurers — insurers who themselves use Change Healthcare to pay clinics and hospitals.

“It is taking a huge sector of the health care system and just throwing it into complete disarray,” Fulton said, adding that she’ll no longer let her doctors rely on just one company to get paid.