UnitedHealth hack takes toll on healthcare providers to the nation's poor

[March 20, 2024]  By Julie Steenhuysen

CHICAGO (Reuters) - The ransomware attack on UnitedHealth that has disrupted payments to U.S. doctors and healthcare facilities nationwide for a month, has taken an especially harsh toll on the community health centers that serve more than 30 million poor and uninsured patients.

Many large healthcare centers have been able to resume receiving payments and making claims after the hack by using alternative technology, UnitedHealth says.

But technology roadblocks have prevented many community health centers from reconnecting, according to interviews with national and state-based organizations representing them, two national groups representing Medicaid directors and plans and five of the affected centers

One Texas-based association said if the situation continues through the end of this month, some members will not be able to make payroll.

UnitedHealth's Change Healthcare technology is used to verify insurance coverage, file claims and get paid. With thousands of customers needing to move to a new connection, UnitedHealth has provided loans and urged practices to use workarounds while it tests and resumes a new system in phases starting this week.

For Tulip Tree Family Health Care, which operates two locations in southern Indiana and serves 4,000 rural patients from Indiana and Illinois, the impact has been "drastic," said Executive Director Kristine Georges.

Tulip Tree has been unable to shift to a different clearinghouse or access other workarounds recommended by UnitedHealth, Georges said. Since Feb. 20, claims have been piling up, amounting to a $300,000 backlog.

Tulip Tree is one of 1,400 community health centers that receive grants from federal Health Resources and Services Administration to cover uninsured patients. Most rely on payments from the U.S. Medicaid program for low income individuals and families.

Members of its 32-person staff are submitting claims on paper or individual insurers' websites, a time-consuming process that has racked up $12,000 in overtime costs in the past two weeks.

Even the extra postage is a drain, she said. "There's no fat to cut."

UnitedHealth has acknowledged that some providers may need more restoration work before they can submit claims and that not all have been able to implement workaround solutions

The company is working with several thousand providers to help with cash flow issues, including large and small regional health systems and small, rural independent physician practices, a spokesman said.

He did not say when claims processing to community health centers would be restored.

'THE MOST VULNERABLE'

Dr. Julia Skapik of the National Association of Community Health Centers said centers receive half their revenue from Medicaid, about 10% from the Medicare program for people aged 65 and older and the disabled, and the rest from private insurers and grants to help uninsured people.

UnitedHealth Group's headquarters building is seen in Minnetonka, Minnesota, U.S. in this handout picture taken in 2019. UnitedHealth Group/Handout via REUTERS /File Photo

After several weeks, affected centers are exhausting their reserves, she said.

Some groups, unable to access the new system, are waiting for a legacy system to be restored. Others have systems that are incompatible with proposed fixes, and several are worried about denials and whether they will soon, or ever, get paid for these claims, she said.

The U.S. Department of Health and Human Services (HHS) has instructed Medicaid programs to advance payments to affected providers.

"We have made clear to UnitedHealth Group our expectation that no provider be left behind," an HHS spokesperson said.

John Baackes, chief executive of L.A. Care Health Plan, which serves low-income communities in Los Angeles County, said they are making cash advances to small community-based providers, who "do not have the sophistication or staffing to turn their claims submission operation quickly."

Isaiah Nathaniel, chief information officer at Delaware Valley Community Health, which has nine locations in the greater Philadelphia area serving 50,000 patients per year, said his organization took a double hit.

While they have taken advantage of some financial assistance from UnitedHealth, there is still a major shortfall because they are unable to get reimbursed from some of their largest payers, one of which asked them to submit paper claims.

They also are unable to connect to UnitedHealth's new system because they do not yet have guarantees that the system is secure. Connecting without that assurance could put their cybersecurity insurance at risk.

On top of that, Delaware Valley uses Change's call centers to handle appointments and prescription refills at four centers. Those are still down with no timeline for restoration.

Lori Hooks of the Texas Association of Community Health Centers said some centers are seeing just 30% to 50% of their claims processed, and for a handful, none are going through.

Her association surveyed members last week who said if the situation persists through the end of March, it may be tough to pay bills or employees.

"These are clinics that don't have a lot of days cash on hand and so they're the most vulnerable for not being able to make their regular monthly bills and payroll," she said.

(Reporting by Julie Steenhuysen in Chicago and Deena Beasley in Los Angeles; Editing by Caroline Humer and Bill Berkrot)

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