UnitedHealth garnishing claims to recoup ‘loans’ from Change Healthcare hack
UnitedHealthcare is demanding to be paid back for loans it issued to healthcare providers who suffered financial damage from the February 2024 hack on Change Healthcare, its subsidiary responsible for processing medical claims.
The Wall Street Journal was the first to report the news, citing conversations with multiple providers. UnitedHealth distributed advances to healthcare organizations, as they were unable to receive reimbursement when Change Healthcare’s network was shut down by ransomware. To date, it said $3.2 billion dollars have been repaid, but it's not clear if borrowers did so willingly.
The providers said they have received threatening letters from UnitedHealth’s Optum wing, demanding payment on outstanding balances. According to the report, the insurer threatened to stop reimbursement payments until the advances are paid in full.
Catherine Mazzola, CEO of the New Jersey Pediatric Neuroscience Institute confirmed her practice had been docked on Medicaid bills, done to recover funds distributed as loans.
In a statement, Change Healthcare said it would “work with providers” on repayment options in an effort to recoup its “interest-free funding." An agreement for the loans stipulated that failure to return the funds could result in garnishment of future reimbursement, the providers confirmed to reporters.
The total amount distributed by UnitedHealth and Change Healthcare is unknown; however, the claims processor is responsible for most medical reimbursement in the U.S., and providers all across the country reported financial struggles during the shutdown of payments.
At the center of this debate is the controversy surrounding the scope and nature of the breach. In October, it was confirmed over 100 million Americans were impacted by the breach, which was blamed on a single legacy server that lacked multifactor authentication.
Change Healthcare and United are facing a slew of lawsuits as a result of the incident, with plaintiffs that include provider groups as well as state governments. In March, the companies filed to have many of the consolidated lawsuits pending in a Minnesota federal court dismissed.
A judge overseeing those cases asked plaintiffs to further consolidate and streamline the lawsuits as much as possible, given the large volume. The next hearing is scheduled for June 12.
HealthExec reached out to Change Healthcare for specifics on how providers can repay, and received the following statement:
"Our priority in establishing this program in March 2024 has been to help bridge the gap in short-term cash flow needs for those providers impacted by the disruption of Change Healthcare’s services. Now, more than one year post the event and with services restored, we have begun the process of recouping the interest-free funding we provided to providers—as the Department of Health and Human Services itself did when it began recouping payments it provided under its own cyber-attack lending program in July 2024. We continue to work with providers on repayment and other options, and continue to reach out to those providers that have not been responsive to previous calls or email requests for more information."
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.