Insurers Concerned Amid Push for Payments After CyberattackHealth Insurance and US Govt to Address Cyberattack Fallout. Credit: techxplore.com

Next week, health insurance companies and U.S. government officials will come together to resolve their differences on how to aid struggling medical practices after a recent cyberattack has delayed billions of dollars in payments.

The Biden administration has been increasing pressure on insurance companies to expedite payments to doctors and clinics affected by the February hack of UnitedHealth Group Inc.'s subsidiary, Change Healthcare. However, insurance companies are worried that this push for payments does not consider the steps they have taken to resume normal business operations.

According to sources familiar with the matter, insurers are concerned that sending out payments before claims have been processed could result in issues during reconciliation. It could also create additional challenges in managing paperwork and tax reporting for a large number of transactions.

Representatives from insurance companies are scheduled to meet with U.S. health officials on Monday, following a previous meeting this week attended by UnitedHealth's CEO Andrew Witty, other health industry leaders, and top government officials. Ahead of the meeting, the Department of Health and Human Services (HHS) has urged insurers to release payments and provide details on any remaining bottlenecks and efforts to address them.

While UnitedHealth has announced assistance programs and Medicare is offering advance payments, the rest of the health insurance industry has remained silent on whether they will provide funds to affected medical providers during this outage.

Insurers have implemented workarounds, such as switching to alternative computer networks and relying on paper-based processes, but some physician groups claim that the processing of claims and payments has been significantly delayed and has yet to be fully restored.

To ease the backlog, U.S. officials have asked insurance companies to temporarily suspend rules that require prior authorization before providing certain types of care. However, insurers are concerned that this could lead to fraudulent or abusive billing practices.

The Biden administration has also requested UnitedHealth and other insurers to advance funding to medical providers. At the recent meeting, the administration pressed insurers to do more to support these providers.

UnitedHealth has announced two advance funding programs and has stated that it will act as a last resort for funding. The company has also encouraged its competitors to do the same and is ready to provide assistance to those in need.

HHS has stated that medical providers are seeking more support and has called on the entire health insurance industry to expand their relief efforts. "This was a massive cyberattack that requires a comprehensive response from all parties involved, including UnitedHealth Group and other insurance companies," stated the agency in an email on Friday. "Reviewing cases on an individual basis is not enough."

According to a letter sent to HHS on Friday, the Blue Cross Blue Shield Association stated that the disruption caused by the cyberattack has not been uniform, with some providers being unaffected while others have been severely impacted. Blue-branded insurance companies are offering customized solutions, including technical support and advance payments on a case-by-case basis.

Some insurance companies have reported a rebound in their claims volume. Elevance Health Inc., for instance, saw a 15-20% drop in incoming claims after the hack, but as of last week, claims were returning to normal levels. However, cumulative claims have decreased by 10% since the breach.

Smaller medical providers, on the other hand, continue to struggle. Oregon Oncology Specialists, a 20-physician cancer practice, had to resort to bank loans when payments from insurers were significantly reduced after the hack. Although they applied for UnitedHealth's financial assistance program, it took two weeks to gain access, and they were only offered $7,600, which is less than 10% of their daily payroll. The practice is still waiting for a response after requesting more assistance.

UnitedHealth has stated that they are investigating the situation. Even larger companies are facing ongoing disruptions in their cash flow. Option Care Health Inc., a home infusion company with $4.3 billion in revenue last year, reported that more than half of their claims since the hack cannot be processed. As a result, their shares fell by 2.9% on Friday.

Hospitals are also feeling the impact of delayed payments, incurring additional costs to switch to alternative systems and struggling to maintain their finances. "It's incredibly frustrating for them to face all these extra expenses while the insurers are sitting on the premiums they've collected and making a profit," stated Molly Smith, Vice President of Public Policy at the American Hospital Association, in an interview this week.

During a Senate Finance Committee hearing, HHS Secretary Xavier Becerra emphasized the need for insurers to release funds to doctors and other providers. "We're telling them, it's time to start making payments," he said.

David Lamy
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David Lamy owns the Bachelor in Atmospheric Science Degree. He is associated with Industry News USA from last 2 years. With proficiency in his work, David obtained a strong position at Industry News USA and heads the Science section. “Weather forecasting” is the field of his interest. He bags total 5 years of experience in this field. Apart from his routine work, David loves to explore his cooking skills. He has participated in various cookery shows.