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The Next Big Bombs to Drop in the Change Healthcare Fiasco

Attack on Optum's IT Services Unit Could Be the Worst One to Hit Healthcare Sector
The Next Big Bombs to Drop in the Change Healthcare Fiasco
Optum's Change Healthcare IT services unit is still struggling to recover from a cyberattack that is disrupting much of the U.S. healthcare ecosystem. (Image: UnitedHealth Group)

It's a fair estimate that leaders at thousands of organizations in the U.S. healthcare ecosystem are dreading the fallout from the ongoing saga involving the apparent BlackCat ransomware attack on IT services provider Change Healthcare.

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What is the next big bomb that might drop? There are so many possibilities to choose from, considering the incident is shaping up to be the worst cyberattack to ever hit the U.S. healthcare sector (see: BlackCat Ransomware Group 'Seizure' Appears to be Exit Scam).

The healthcare sector has been hit with many disruptive attacks but in most cases, the impact was regional or limited in terms of what and who was affected.

Even the infamous Anthem cyberattack in late 2014, which still holds the record as being the largest reported health data breach - nearly 79 million individuals affected - did not involve disruption of the entire healthcare ecosystem.

Until now, Change Healthcare has done the mostly invisible but lucrative work of processing medical claims. One estimate is that before its 2022 acquisition by the Optum subsidiary of UnitedHealth Group for $7.8 billion, it controlled roughly three quarters of the billing market.

Change Healthcare is a ligament connecting physicians with payers - and its disruption is the equivalent of a busted knee, stopping the healthcare industry from standing up. As many as one-quarter of physician practices are in severe financial distress, Farzad Mostashari, CEO of Aledade, the nation's largest network of independent physician practices, told The Washington Post on Tuesday. Mostashari was the U.S. Department of Health and Human Services' national coordinator for health IT under former President Barack Obama.

For many affected organizations, Change Healthcare's cyber incident means severe financial hardships caused by cash flow issues that they'll be digging out of for a very long time - and that potentially may push some them over the edge of remaining viable.

The American Hospital Association in a letter this week told Congress that the Change Healthcare incident was an "unprecedented attack against one of America’s largest healthcare companies" causing patients to struggle in obtaining prescriptions and scheduling care.

"The staggering loss of revenue means that some hospitals and health systems may be unable to pay salaries for clinicians and other members of the care team, acquire necessary medicines and supplies, and pay for mission-critical contract work in areas such as physical security, dietary and environmental services," the AHA told lawmakers.

For others, the incident means dealing with a prolonged and difficult transition from makeshift manual processes back to automated processes as Change Healthcare's 100-plus affected IT products - ranging from revenue cycle, claims processing, patient authorization, clinical information exchange and many more - eventually come back online (see: Change Healthcare Outage Hits Military Pharmacies Worldwide).

For possibly every Change Healthcare customer, the next big bomb dangling over their heads is learning once and for all how many of their patients will need to be notified that their protected health information was compromised in the Change Healthcare ransomware attack. Thousands? Hundreds of thousands? Millions? Who knows? But with BlackCat attackers claiming to have exfiltrated 6 terabytes of data from Change Healthcare, it surely will be plenty.

Along with the breaches will come many other extra burdens and uncertainties. In how many lawsuits might Change Healthcare customers be named co-defendants? How many hoops will they need to jump through as part of the regulatory breach reporting and investigative process?

On Tuesday, HHS said it was stepping in with various regulatory maneuvers to hopefully help ease some of the cash flow and other pressures many entities are facing as Change Healthcare continues to recover from its attack.

The AHA contends that those HHS measures so far "are narrow in scope and do not adequately address the complex reverberations of this cyber incident."

Once the last big bombs drop in the immediate aftermath of the Change Healthcare attack, there surely will be lots of inspection and analysis of how this incident had such a widespread effect on the company's IT environment - and in turn, on the rest of the industry.

UnitedHealth Group has taken the unprecedented step of offering some financial assistance in the form of short-term funding to help certain providers from facing cash flow hardships. No large third-party vendor has done that after it was breached. But still, the AHA and other groups say the financial assistance being offered is very limited in terms of entities that are eligible.

In any case, UnitedHealth Group's next major step should be sharing its lessons learned with the healthcare security community.

Hopefully, plenty of insightful lessons will emerge in the postmortem of the attack, not only to help prevent a similar incident of such scale in the future, but also to better prepare the industry for "next time."

About the Author

Marianne Kolbasuk McGee

Marianne Kolbasuk McGee

Executive Editor, HealthcareInfoSecurity, ISMG

McGee is executive editor of Information Security Media Group's media site. She has about 30 years of IT journalism experience, with a focus on healthcare information technology issues for more than 15 years. Before joining ISMG in 2012, she was a reporter at InformationWeek magazine and news site and played a lead role in the launch of InformationWeek's healthcare IT media site.

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