UnitedHealth Group's Change Healthcare has restored some of its system a month after a catastrophic cyberattack crippled it and much of the nation's healthcare infrastructure, but the recovery process is only just beginning.
Other companies offering revenue cycle management are gaining traction amid the Change outage, filling in service gaps left by a dominant player that likely won't be operating normally for weeks. It remains uncertain, however, whether the incident will change the market dynamics long-term.
Related: Insurer responses to Change outage fail to impress providers
UnitedHealth said Monday it would start releasing medical claims preparation software to thousands of customers this week, following the Feb. 21 cyberattack that forced it to disconnect its systems.
The company restored Change’s electronic payments platform Friday and brought nearly all pharmacy network services back online March 7.
Despite UnitedHealth's progress, thousands of hospitals, nursing homes, pharmacies and other providers are still waiting for reimbursements from payers. Change, acquired by UnitedHealth's Optum unit in 2022, processes about 50% of the nation's medical claims and handles one in three patient records.
The outage raises questions about the company's dominant position and whether its customers need to consider other avenues for revenue cycle management. Meanwhile, Change's competitors are stepping up to help payers and providers scrambling for workaround solutions and hoping it will lead to long-term customers.
“This is a classic example of a concentration of risk that blew up, and we’re going to have to pick up the pieces,” said Kenneth Raske, president of the Greater New York Hospital Association, which represents more than 250 nonprofit hospitals and care facilities. “As we begin trying to figure out when is [normalcy] going to be achieved, nobody really knows the answer to that.”
Waystar, Availity step in to provide services
Waystar, one of Change’s biggest competitors managing claims submissions, payer remittances and prior authorizations, is offering a temporary program for affected providers that expedites their access to its software following the outage. Within 48 hours of implementation, one health system with more than $6 billion in annual revenue processed nearly 120,000 claims transactions with more than 130 payers, a Waystar spokesperson said in an email.
Availity, another competitor that manages claims and remittances, has helped 300,000 providers and 50 health plans move about $9 billion in stalled claims at no cost through a program launched within days of the cyberattack. The company said it is seeing an average 40% increase in daily claims volume.
Availity works with more than 2,000 health plans and 3 million providers and processed almost $3 trillion in claims last year.
CEO Russ Thomas said it typically takes months to switch clearinghouse vendors, which act as the middlemen between payers and providers in claims processing. But Availity has brought some customers back online within two days, he said. Offering the services for free could lead some of Change's clients to permanently switch vendors, he said.
“I think you get moments in time when you can do well by doing good,” Thomas said. “Our perspective with clients is … get connectivity in place today and then when Change comes back up, great, you’ve got a path there as well. I don’t think waiting or hoping is a very good strategy.”
Other forms of assistance have emerged as well.
Aledade, which supports more than 1,900 primary care practices and health centers in implementing value-based care, is offering up to $100 million in advance payments to help providers in its network stay afloat during the outage, said co-founder and CEO Dr. Farzad Mostashari.
Aledade is also working to educate providers on how to switch clearinghouse vendors and advocating for more temporary assistance from payers.
“Definitely there have been some practices for whom it’s been a lifeline,” Mostashari said. “For practices who feel like they didn’t rely entirely on Change and they’re in a better financial position, [the response] was just gratitude that somebody cares.”
UnitedHealth rolled out a temporary loan program March 1 to help those affected, although many providers and industry groups have criticized the program as inadequate. The Centers for Medicare and Medicaid Services announced its own efforts, assisting providers with alternative means for processing transactions and asking insurers to relax prior authorization requirements.
Change plays a dominant role in healthcare
Consolidation in the clearinghouse market led to Change’s massive footprint, and its outsized role may make it hard for some customers to switch allegiances.
In 2014, revenue cycle management company Emdeon acquired Change Healthcare before rebranding the following year to take the latter’s name. At the time, the company already offered eligibility, payment and pharmacy services.
In 2022, UnitedHealth acquired Change Healthcare for $13 billion, despite opposition from stakeholders and regulators including the Justice Department, which sued to block the deal. A federal judge allowed the acquisition to go forward under certain conditions.
Industry trade groups, including the American Hospital Association and National Community Pharmacists Association, criticized the transaction at the time, concerned it would limit competition among similar vendors and give UnitedHealth access to competitors’ data.
“Ultimately, it was another merger that was waved through, and I think that we're seeing some of the repercussions,” said Douglas Hoey, CEO of the pharmacists association.
Experts said the incident may prompt healthcare organizations to reconsider vendor contracts going forward and possibly work with multiple vendors to create redundancy in their revenue cycle processes.
Claims processing is easier to transfer to a new vendor, as most vendors already have standard connections with the same payers. But pharmacy services are harder to disentangle from a vendor, said Kate Festle, partner in mergers and acquisitions at consultancy West Monroe.
Pharmaceutical manufacturers, for example, offer some copayment coupon cards exclusively managed by Change to help patients afford medications. During the outage, pharmacies have had to decide whether to assume a coupon will work once systems are fully restored or require patients to pay out of pocket.
Change’s heft also means providers may not get to choose whether they work with the vendor.
“A lot of people are like, ‘Oh well, now that this happened, people are going to just stop using Change,’ and it's just far from that easy,” said Terrence Cunningham, director of administrative simplification policy at the AHA. “If you want to not work with Change anymore, but your health plan uses Change to digest transactions and send stuff out, you're still working with Change.”
