Physicians report widespread financial turmoil due to Change Healthcare cyberattack

As of April 3, UnitedHealth Group (UHG) had advanced nearly $4.7 billion to providers grappling with the aftermath of the Change Healthcare cyberattack. Even so, physician practices across the country have faced persistent financial turmoil in the weeks since the cyberattack began.

More than 77 percent of American Medical Association (AMA) survey respondents reported experiencing service disruptions since February 21 and are still dealing with the effects of the attack. About 1,400 individuals responded to the AMA’s survey, which was conducted between March 26 and April 3. Most responses came from practices with fewer than 10 physicians, highlighting the impact of the cyberattack on small practices.

More than three-quarters of respondents reported losing revenue from unpaid claims, and 85 percent of respondents have had to devote additional staff and resources to completing revenue cycle tasks.

What’s more, 55 percent of respondents have had to use personal funds to cover their practice’s expenses, and 31 percent were unable to make payroll.

On March 27, UHG stated that medical claims were once again flowing through Change Healthcare’s network, though not yet at pre-incident levels. But for many small practices, these disruptions have caused irreparable damage.

Anecdotes collected from survey respondents told stories of physician practices facing penalties due to their inability to complete payroll and pay vendors. More than 40 percent of respondents were unable to purchase supplies.

Nearly half of respondents turned to alternative clearinghouses to conduct electronic transactions, but the time and cost of switching clearinghouses have created additional cash flow problems.

A quarter of respondents reported receiving financial assistance from UHG, and 12 percent have received assistance from CMS. Still, these disruptions are continuing to devastate physician practices, with more than half of survey respondents losing revenue due to their inability to charge patient co-pays. Nearly 80 percent of respondents have lost revenue from claims that they have been unable to submit.

Beyond financial impacts, the cyberattack has taken a toll on patient care as well. Respondents reported instances of delayed procedures and issues with verifying patient insurance, resulting in some patients being unable to get their medications.

“The disruption caused by this cyber-attack is causing tremendous financial strain,” said AMA President Jesse M. Ehrenfeld, MD, MPH.

“These survey data show, in stark terms, that practices will close because of this incident, and patients will lose access to their physicians. The one-two punch of compounding Medicare cuts and inability to process claims as a result of this attack is devastating to physician practices that are already struggling to keep their doors open.”

Although physician practices have been hit especially hard in the aftermath of the cyberattack, few healthcare organizations have been left untouched. As of late March, the Change Healthcare cyberattack was costing Massachusetts hospitals at least $24 million per day, according to the Massachusetts Health & Hospital Association (MHA).

About three-quarters of MHA survey respondents said the cyberattack has caused disruptions related to claims processing, pharmacy, and the ability to obtain patient data.

As the sector works to recover from what the American Hospital Association (AHA) is calling the “most significant and consequential cyberattack on the US healthcare system in American history,” further financial and patient care impacts are likely to be reported.