Federal officials announced emergency funding is coming for hospitals and other health care providers after a cyberattack shut down the nation’s largest processor of medical claims, causing havoc and financial strain.
The Centers for Medicare and Medicaid Services announced it will expand its response to the Feb. 21 cybersecurity breach on Change Healthcare, owned by UnitedHealth Group, to include advance payments to Medicare Part B providers. Part B coverage includes some doctors’ visits, preventive services, medical supplies, and outpatient treatment and services.
CMS announced a similar program to make emergency payments to hospitals affected by the hack. The emergency funds represent upfront payments made to health care providers and suppliers based on claims made between August and October 2023, according to the American Hospital Association.
U.S. Senate Majority Leader Charles E. Schumer (D-N.Y.) commended CMS after the sending the agency a letter earlier asking for urgent action to make sure health care providers get paid.
“The opening up of Medicare Part B will directly help our doctors on the frontlines of this crisis who for weeks have been seeing unpaid bills pile up, threatening their ability to stay open and continue providing care to patients, and the new actions taken today will help give them desperately needed financial relief,” Schumer said in a statement Saturday.
The American Hospital Association also applauded the action by CMS.
“We appreciate that CMS continues to work with stakeholders to find solutions to the Change Healthcare disruption and ameliorate its impact on hospitals, health systems, physicians and other providers,” the AHA said in a statement on its website.
According to the American Hospital Association, billions in payments to providers have been halted, threatening the financial viability of hospitals, health systems, physician offices and other providers.
The association and its members have pleaded with the federal government for help, with some saying they were nearing the bottom of their cash reserves and could soon be unable to maintain staffing and services.
Georgia hospitals and pharmacies reported last week that they are finding workarounds to bypass the nationwide outage of Change Healthcare’s services. Many hospital systems including Emory Healthcare and Northside Hospital report they have set up alternative pathways to file claims and verify insurance with insurance companies.
Change Healthcare also set up a new electronic prescription service for drugstores, hospitals and nursing homes, pharmacies, and other providers impacted by the ransomware attack.
While United Health on Thursday announced a timeline to bring its network back online, saying they expected its payment platforms to be restored by March 15, many health care leaders were bracing for a longer period of disruption.
“I think it’s fair to say none of us believe it will go back the way it was two weeks ago any time soon. And from our standpoint, we’re already planning on markedly different workarounds, some of which will be permanent,” said Emory Healthcare CEO Dr. Joon Lee.
Anna Adams, a spokeswoman for the Georgia Hospital Association said the impact of the hack varies significantly among providers. Larger hospital systems with significant cash reserves are better positioned to weather the problems than smaller or rural hospitals, which operate with slimmer margins.
Adams said the hack has already resulted in $10 million in lost cash flow at a major hospital system in Georgia that she didn’t name.
Lee called the situation a crisis for the U.S health care system and acknowledged the hack is having a “profound” impact on work to verify insurance and process claims.
In an interview with The Atlanta Journal-Constitution, Lee said “it’s fair to say organizations of our size will easily have millions of dollars of cash flow that are delayed or interrupted.” While Emory Healthcare has not shared the dollar value in lost cash flow from the hacking, Lee said Emory is expected to have a net revenue of $6.2 billion for the 2024 fiscal year based on activity during the first six months of the fiscal year that started in September of last year.
Hospital systems not reliant on Change Healthcare appear unscathed by the massive ransomware attack on the giant technology company.
Phoebe Putney Hospital System in Albany had switched vendors in order to to file claims several years ago. A spokesman said only about 2% to 3% of claims have been affected and administrators have figured out a workaround to bill those claims.
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