MA hospitals losing $24M per day following Change Healthcare cyberattack

The Change Healthcare cyberattack is costing Massachusetts hospitals at least $24 million per day, according to the Massachusetts Health & Hospital Association (MHA).

After Change Healthcare’s network was interrupted by ALPHV/BlackCat on February 21, the platform went offline and facilities across the country were disconnected from it. Subsequently, MHA sent out a survey to its members to assess the problem.

Among 12 hospitals and health systems in Massachusetts, the disruption is causing around $24,154,000 in reimbursement losses each day. The exact daily figure varies across organizations depending on how much they rely on Change Healthcare.

These losses mean many physician practices and hospitals cannot meet payroll without loans or bridge payments. Hospitals are already facing financial challenges, with 71 percent of Massachusetts hospitals and health systems experiencing negative operation margins, exacerbating the disruption’s impact on cash flow.

“We’ve heard from members that it’s truly shocking how quickly this problem cascaded, and that it hits especially hard on top of the ongoing capacity, workforce, and financial challenges hospitals already are facing,” Karen Granoff, senior director of managed care at MHA, said in the press release.

Around three-quarters of respondents in MHA’s survey said the cyberattack has caused disruptions related to claims processing, pharmacy, and the ability to obtain patient data. These financial and administrative issues are affecting Medicare, Medicaid, and commercial insurance.

As the situation evolves, UnitedHealth Group has established workarounds for providers, including the iEDI claim submission system, and is offering a temporary funding assistance program. However, the American Hospital Association (AHA) called the program “shockingly onerous” and said it is only available to a small number of hospitals and health systems.

As of March 13, all major pharmacy and payment systems were up and more than 99 percent of pre-incident claim volume is flowing, according to UnitedHealth Group. But teams are still working to address certain pharmacies still offline, disruption for infusion pharmacies, and issues for Medicaid fee-for-service customers.

The organization started bringing up the claims system this week, following a three-step process consisting of connection, testing, and resumption. UnitedHealth Group also expected Change Healthcare’s electronic payment functionality to be restored beginning March 15.

At the state level, Massachusetts-based health insurers have been working with individual providers and launching website pages to offer information and alternatives to keep processes going.

On March 5, MHA sent a letter to Massachusetts payers asking them to waive claims filing limits, ease prior authorization, and extend appeals filing times. Massachusetts Association of Health Plan (MAHP) members said they would not issue blanket waivers, but plans were willing to work with individual providers and hospitals to address specific issues.

Each payer is handling the situation differently; therefore, providers are encouraged to contact each plan to discuss specifics. For example, Blue Cross Blue Shield of Massachusetts is waiving its 90-day claim filing limit and one-year appeals filing limit for its commercial, Medicare Advantage, and Federal Employee Program plans.

Providers may also want to consider using an alternative clearinghouse vendor as it’s unknown how long the disruptions stemming from the cyberattack will linger.