Community health centers still bogged down by red tape after UnitedHealth hack

[June 05, 2024]  By Amina Niasse

NEW YORK (Reuters) - More than three months after a cyberattack on UnitedHealth Group's technology unit, some community health centers, which serve 30 million low-income and uninsured patients, are still wading through red tape to receive back payments and struggling with operations issues.

Change Healthcare, a unit of the largest U.S. health insurer, processes about 50% of all medical claims in the U.S., for around 900,000 doctors, 33,000 pharmacies, 5,500 hospitals and 600 labs. It also runs other support services like call centers.

All were shut temporarily after the Feb. 21 ransomware attack and some, like the medical claims system, took one or two months to restart.

Reuters spoke with five community health centers or systems who said they were still reconciling older unpaid medical claims and tracking down missing payments. Three said they lost customers due to various hack-related disruptions.

"The negative longer term consequences of this huge reimbursement disruption are worse for providers whose profit margin was slim to begin with," said Assistant Professor of Division of Health Policy & Management Hannah Neprash at the University of Minnesota Twin Cities.

"That is rural hospitals, safety net hospitals, and community health centers, any place that treats large shares of publicly insured patients," Neprash said.

A UnitedHealth spokesperson declined to comment on continued reimbursement or call service issues raised by providers. The company's website says restoration of claims services is underway or partly complete.

In May testimony to a U.S. Senate committee on the cyberattack, UnitedHealth CEO Andrew Witty described the hack as causing "incredible disruption" across the healthcare system.

The company had distributed $6.5 billion in loans to providers as of last month. About 34% went to safety net hospitals and community health centers, Witty wrote in his testimony to the committee.

OVERTIME

Employees at Nevada Health Centers' 26 locations have consistently logged over 100 hours of overtime per week filing additional paperwork to correct patient eligibility or wrongly denied claims, according to Executive Vice President of Revenue Cycle and Population Health J.C. Flowers.

The health centers need more labor hours than ever, but may need to cut jobs as they wrestle with delayed cash flow and seek overdue payments from insurers, he said.

The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California, U.S., April 13, 2020. REUTERS/Mike Blake/File Photo

“It’s a real fear when you're used to averaging a million dollars a month in revenue, and all of a sudden, for the next eight months, you're going to do $600,000,” said Flowers, who said Nevada Health Centers employs about 150 health professionals.

With insurance claims backlogged for months, paperwork justifying each payment makes up the bulk of the cyberattack's continued burden for providers, according to Terrence Cunningham, a policy director at the American Hospital Association.

In an April physician survey published by the American Medical Association, 91% of respondents said they needed to commit staff to recouping revenue lost to the hack.

“Organizations have to shift money around to deal with the aftermath, and it's going to affect them for the entire fiscal year, at the very least,” said Julia Skapik, chief medical information officer at the National Association of Community Health Centers. Community Health Centers receive $4.4 billion in annual government funding.

IMPATIENT PATIENTS

Some providers said their relationships with patients suffered as a result of disrupted services.

Delaware Valley Community Health, based in Philadelphia, cut ties with a call center that used Change Healthcare technology.

“We've had to use our own employees now to try and answer the phones, and we’ve gotten patients upset with us," said Dr. A. Scott McNeal, Delaware Valley's CEO, adding that longer waits led some to hang up without scheduling appointments.

At LCH Health and Community Services, a Kennett Square, Pennsylvania-based provider, some patients who couldn't easily fill prescriptions blamed the practice and went elsewhere, Chief Executive Ronan Gannon said.

That has exacerbated LCH's revenue crunch, as higher paying privately insured patients left and people without insurance paying lower fees became a bigger percentage, he said.

(Reporting by Amina Niasse; Editing by Caroline Humer and Bill Berkrot)

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