change healthcare

Change Healthcare Incident: The Biggest Cyberattack on American Hospitals

A cyberattack on a little-known healthcare company last month has caused major trouble and serious financial consequences for hospitals, doctors, and patients around the country.

The American Hospital Association has described the hack as quote, the most serious cyberattack in history on the healthcare system. It began about two weeks ago when hackers shut down a payment processing system run by a company called Change, owned by United Healthcare. Change essentially functions as a middleman between insurers, providers, hospitals, and pharmacies. Hospitals and other medical practices have not been able to process bills and get the payments they need to operate. Doctors and patients have been unable to get insurance approvals for some procedures. And until a few days ago, pharmacies were also impacted. Here’s what one doctor in Texas posted on TikTok. >>

“This morning, I spent probably several hours calling several pharmacies because my patients haven’t received their prescriptions that I prescribed last week. So, it’s not usual that I have to call the pharmacies. Like, usually I only couple pharmacies if there are shortages of controlled substances or something else is going on.”

She suspects the delays were because of the healthcare hack. This week, the Department of Health and Human Services announced steps to help, including providing some advanced payments for providers. But problems remain.

Dan Diamond has been covering this for the Washington Post and says:

“Change healthcare was the middleman for tens of millions of health claims every day. That means virtually everyone in health care is being touched by this directly because they are waiting to get aid or they work with performers and players that are waiting. Right now there are real pains for physicians. Physicians don’t necessarily have the cash flow for now two weeks of not getting paid”.

We have talked here at the Washington Post to doctors who have had to take out emergency loans, and who have gone on heroic measures to keep their practices open. Hospitals have also been able to scramble and try and figure out how to keep their operations paid for. Pharmacists as you mentioned earlier, I talked to a therapist who has not been paid. It is touching every corner of health care. There are efforts to make sure patients are being protected. Procedures are still taking place. It is a backend issue, but they are so severe that inevitably if this continues there will be problems facing the front end. There will be doctors who cannot keep their lights on. Staff might have to be furloughed pretty soon it will be a crisis point and — that is what health officials are trying to stave off by starting to advance emergency loans to keep these providers moving.

 

You might find this article interesting too!: Chinese hackers are preparing to bring devastation to the United States.

 

“We are now already at least two weeks since the hack was reported and there have been reports that United Healthcare may have paid a $22 million ransom to the cyber gang purportedly behind the attack. Why isn’t the system back up and running if that is the case?”

“First, I think hackers are not necessarily the most reliable partners here. Even though there may have been a payment from United Health, they have not confirmed that he will not necessarily resolve the issue when you are dealing with one of these groups. There are still systems that need to be checked. There is data that may not be in the hands of United. It is very risky when dealing with ransomware to begin with and the scope of the hack was so extensive it is hard to flip the switch back on even if the hackers have returned what was taken.”

What made change healthcare vulnerable to this, and more broadly, what does it expose about weaknesses in our healthcare system?

“Change was vulnerable in part because they are a big target. Even before United bought them, and United is one of the largest companies in the U.S. Change was already this major processor of claims. They take data from hospitals and doctors and check that data, pass it on to the insurance company. They are in the middle of all of these transactions. They have sensitive nickel data that is very alert to hackers. So I am not exactly sure. I am not sure we know the ways the hackers found their way into change but health care companies are under attack in this way all the time. This just happens to be a particularly large hack. It also has pointed to how much we rely on just a handful of health care companies as consolidation increases across the country.”

Change is a major middleman owned by United Health which has its fingers all over health care right now. That is something that government officials I have talked with this week have been thinking about as well. There is an antitrust probe into United. But there is a real question about what are the risks if so much of health care is concentrated in just a few hands.

We talked a little about the Department of Health and Human Services response. How do physicians and hospitals feel about how the government has reacted?

“They are not feeling great. No one is happy with the response so far. Hospitals have got more help, they have a pocket so they are able to weather the pain better than some other organizations. But even hospitals say they need more than the loans that are being offered potentially by the federal government. Physicians are not eligible for those loans right now.”

UnitedHealth has made available emergency loans for doctors, but they have told us they are being offered pennies on the dollar. They might be down millions of dollars at this point in claims that have not been paid and they are being offered thousands of dollars, maybe $10,000 to patch that hole, which they cannot do. So there is bipartisan outrage in Congress. I was at the white house today talking with officials who say they are looking to the private sector right now to try and solve this before the federal government steps in more.

 

If you were worried about the Change Healthcare cyberattack, and you want to avoid this to happen in your company, contact us!

 

 

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