Minnesota Now with Cathy Wurzer

Minnesota Hospital Association CEO: Change Health hack is ‘quite a crisis’

front of a united health care building
A sign stands on UnitedHealth Group Inc.'s campus in Minnetonka on Oct. 16.
Jim Mon | AP 2012

Hospital, clinics and pharmacies in Minnesota and across the country are reeling from a cyberattack. Change Health, which is a subsidiary of Minnetonka-based UnitedHealth Group was hacked on Feb. 21 by a ransomware gang known as ALPHV/BlackCat. A post on a hacker forum popular with cyber criminals claimed that United Health paid a $22 million ransom to recover access to data and systems.

The speculated ransom payment would be the second-highest ransom payment in U.S. history if confirmed. Now the federal government has said it is working with UnitedHealth Group in its response. In the meantime, the hack is still wreaking havoc on the health care system. Minnesota Hospital Association CEO Dr. Rahul Koranne joined MPR News Host Cathy Wurzer to talk about the impacts in Minnesota.

UnitedHealth Group has a statement on their website that reads in part, “We’ve made progress in providing workarounds and temporary solutions to bring systems back online in pharmacy, claims and payments. We continue to be proactive and aggressive with all our systems, and if we suspect any issue with the system, we will immediately take action.”

Use the audio player above to listen to the full conversation.

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Audio transcript

[MUSIC PLAYING] CATHY WURZER: Hospitals, clinics, and pharmacies in Minnesota and across the country are still reeling from a cyberattack. Change Health, which is a subsidiary of Minnetonka-based UnitedHealth Group, was hacked on February 21 by a ransomware gang known as ALPHV Blackcat. Change Health is the largest US health care payment system.

A post on a hacker forum popular with cybercriminals claimed that UnitedHealth did pay a $22 million ransom to recover access to data and their systems on Sunday. If confirmed, the ransom payment would be the second highest ransom payment in US history. Federal investigators are working with UnitedHealth Group in its response to the attack.

There is still a digital logjam, though, that has snarled administrative functions for hospitals, doctors, pharmacies, and millions of patients. Joining us right now is the CEO of the Minnesota Hospital Association, Dr. Rahul Koranne. Always good to talk with you, doctor. How are you?

RAHUL KORANNE: I'm good, Cathy. Thank you for having me.

CATHY WURZER: Thanks for being here. What have you been hearing from hospitals and health care providers across Minnesota about this?

RAHUL KORANNE: Well, as you said, Change Healthcare, which is part of the insurance giant UnitedHealth Group, is a very huge company. It processes 15 billion claims, totaling more than $1.5 trillion, with a T, a year. So again, it's ubiquitous. It is used by so many of our hospitals, or clinics, or health care organizations.

And as that was hacked and had this cyber attack, that particular air traffic controller or pipeline through which claims go to insurance companies has ground to a halt. So as you said, it is impacting our patients. It's impacting our staff. And it's impacting hospitals and health care organizations, which are already facing multiple other crises.

CATHY WURZER: So are doctors and hospitals not able to bill for some services? And are patients having trouble picking up prescriptions? That kind of thing?

RAHUL KORANNE: Yeah, exactly. So what Change Healthcare does, it's a pipeline. If you have that as one of your vendors through which you send claims-- that's where when a patient comes into a clinic, or to the emergency department, or to the hospital to get a surgery, you send a claim to the insurance company to verify eligibility, to look at what is the patient's deductible, to make sure that the patient is with that particular insurance company.

And then on the other side, after the claim is sent, that's the pipeline through which the payment comes back to the hospital. So all of that, if you use Change, which many of our hospitals and health care organizations do, that tunnel, that pipeline is completely blocked.

So right now what we're hearing from some organizations, there are hundreds of millions of dollars of claims that are just sitting there because they have not been sent to insurance companies. So as you can imagine, the worry about how this will go over the next couple of days or weeks is growing with every passing moment.

CATHY WURZER: I mentioned patients and prescriptions. What about the pharmacy aspect of this?

RAHUL KORANNE: So in a pharmacy, when a patient goes in to pick up their prescription, first, the claim for that particular prescription is sent to a PBM or to a insurance company to make sure that claim can be paid. If Change Healthcare is used, that particular pipeline is clogged. So right now this leaves very difficult choices for providers and patients.

Either the pharmacy is going to give that patient the prescription at no cost and hope for a retroactive resolution. And that's what we are doing. So right now we are meeting our mission and keeping patients first. So in many instances, our hospitals, our pharmacies, our health care organizations are giving the patients their prescriptions and then hoping that they will get paid later.

In some situations, some pharmacies might be asking patients to pay out of pocket. But that is such a difficult situation for our patients. For example, a 30-day supply for an inhaler can sometimes exceed $1,000. And that's really a hardship. Or ask the patient to transfer the prescription to another pharmacy that may not be affected by this outage. So that's also a very difficult thing for our patients. And finally, our staff, our pharmacists, our pharmacy staff are overwhelmed with managing these transfers, customer inquiries, and the financial strain of unfilled claims.

CATHY WURZER: This sounds like a mess.

RAHUL KORANNE: It actually is quite a crisis. And like I said, if those claims do not start flowing, and we start getting paid on the other end, we could be fast approaching a financial cliff, which is something that I'm really very worried about because, as you know and your listeners know, last year in 2023 our not-for-profit hospitals and health care organizations in Minnesota already lost hundreds of millions of dollars. And they're already hanging on the side of the cliff. So this could really tip them over.

CATHY WURZER: Boy, I tell you, so it sounds though as if Change Health is almost like the Epic, the system used by most hospitals and clinics for medical records. That's another huge system. So you've got Change. You've got Epic. And I wonder here, access to information, of course, makes the system easier to navigate. But let's talk about the vulnerabilities of these big systems. Do you think that there is room for improvement in how these systems operate?

RAHUL KORANNE: Well, we're living in a cyber world. And there's always room to improve. But this is why when your listeners hear about the hard work that our hospitals, and health care systems, and clinics are doing on a daily basis to ensure that we take cyber security seriously, that we have training for our staff, that we are overseeing all of our technological systems, that we are working with our vendors to make sure we know who has access.

We spend a lot of time on a daily basis to keep our systems secure. But as you said, we do have vendors that are outside vendors. In this case, it happens to be Change Health, which is part of UnitedHealth Group. And they were hacked. So again, we are exposed because of something that happened externally to our systems through UnitedHealth.

CATHY WURZER: So what else is the Minnesota Hospital Association doing when it comes to helping member hospitals deal with cybersecurity threats?

RAHUL KORANNE: Well, I would say that I am extremely grateful to our state and federal officials and our elected officials who are taking this very seriously. We are in constant communication with Governor Walz's office. And we really appreciate that they're right there with us, understanding the situation and wanting to assist us.

Similarly, all of our 10 congressional delegation members, we had a meeting with them again yesterday, briefed them. And I would say that both of our senators Klobuchar and Smith are right there helping us. So again, really appreciate our elected officials, both state and federal, that are helping us. They're understanding the situation.

But what we need right now from health and human services, which came out with some beginnings of some assistance yesterday, is we need to get assistance funds quickly to our hospitals. Again, with the worry that we might be approaching a financial cliff, we need faster payments from Medicare, and Medicare Advantage, and Medicaid. We need them to cut red tape for patient care and temporarily remove the need for pre-approval for certain treatments, so that our patients can continue to get the care that they need.

We also need them to provide clear guidance for emergencies. So for example, if our billing systems completely go down, we need clear instructions from Medicare on how to quickly switch providers so that we can ensure that the systems are flowing, and we can get paid, and patients get what they need in care. And also, ease reporting burdens, flexibilities in federal reporting deadlines because right now I can't emphasize enough how this is all hands on deck at our clinics and our hospitals.

Our pharmacists, our billing professionals, our revenue-cycle professionals are working around the clock, always keeping our patients first. But as you can tell, this is a big deal. And our staff are really working very hard right now.

CATHY WURZER: So a final question, for patients listening, is there anything they can do to make the system smoother in terms of how they interact with it or to protect their data? Anything they can do at all? Or just sit tight.

RAHUL KORANNE: Well, Cathy, I really appreciate you focusing on this story because unfortunately, right now when patients are hearing about this, if they're not listening in or reading some of the media that we've done, is when they go to their clinic or the hospital, and they have to wait while somebody calls the insurance company because that channel is down. Or if they go in to pick up prescription, and it doesn't work like it's supposed to.

But it's really good to know and track the story because right now no claims are going in for many of our organizations. So we know that the cleanup of this, even after United fixes this and Change Healthcare fixes this in the next couple of days or weeks, this is going to take multiple months, or it could even go into next year, where bills are reconciled, where they benefits for the patients and their claims are reconciled. They may you know get bills later in the summer, in the fall.

So like you said, it's going to be a mess. And we really appreciate our patients to have some patience. Work with us. We are doing our best to get you the care when and where you need it. But at this point, this could go on for many months. And we ask for your patience, and your support, and your partnership.

CATHY WURZER: All right. Doctor, thank you so much.

RAHUL KORANNE: Thank you so much, Cathy.

CATHY WURZER: Dr. Rahul Koranne has been with us, the CEO of the Minnesota Hospital Association.

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