The American Medical Association (AMA) has sounded the alarm about the ongoing damage from the February Change Healthcare hack, which the group said continues to rattle providers through lost revenue, leaving many small practices struggling to make payroll.
In a statement submitted to the Senate Finance Committee, the AMA said it is “particularly concerned about the impact of the outage on small and independent physician practices that live financially on the margins and do not have the resources to weather a storm such as this.”
“Although the hackers are ultimately to blame for this breach, the AMA has been disappointed by the response of many of the most resourced players in the healthcare system to meet the moment thus far, especially in their failure to support physician practices serving small, rural or underserved communities,” the AMA added.
The statement was submitted May 1, the same day as a Senate hearing on the data breach where UnitedHealth Group CEO Andrew Witty admitted the absence of multifactor authentication ultimately led to cyberthieves gaining access to Change Healthcare’s servers.
The company is still not sure how many patients had their data leaked for sale on the dark web, but UnitedHealth confirmed the claim of hackers that it is “a substantial proportion of people in America”. During the hearing, Witty stated Change Healthcare has fortified its systems in response to the breach.
AMA paints a dire picture of healthcare economics
Results from a survey conducted by the AMA in April 19 stand in contrast to UnitedHealth’s assertion that claims sent through Change Healthcare are being reimbursed at normal, pre-hack levels. Those surveyed—most of whom represent small, independent physician practices—said they are not receiving the payments they need and that communication has been lacking from Change Healthcare on the status of claims.
Of the 590 physicians surveyed, 90% said they are continuing to lose revenue as a result of the hack, and 80% said they are having trouble submitting new claims. Further, 63% of respondents said the slow response to claims makes it difficult to bill patients for the remaining balances and co-pays.
As of April 24, nearly 25% of respondents said their revenue is still down by over 70% as a result of outages from the hack. Many physicians—62% of respondents—said they have had to dip into their personal funds to pay expenses for their practice, with 29% turning to loans. Worse yet, 34% of those surveyed said they have been unable to make payroll.
In a published letter, AMA President Jesse M. Ehrenfeld, MD, said the Change Healthcare breach and resulting economic turmoil is a “cautionary tale of the dangers of unchecked consolidation” in healthcare. He added that the breach reveals a need for more competition, as Change Healthcare is the one company responsible for resolving most medical claims for practices and healthcare organizations all over the country.
Fortuitously, the AMA notified the Department of Justice in 2021 of several antitrust concerns regarding the proposed merger of Change Healthcare and Optum. Both companies are now subsidiaries of UnitedHealth.
