When Change Healthcare, a subsidiary of UnitedHealth Group, obtained hit by a cyberattack this winter, an enormous chunk of the nation’s docs, pharmacists, hospitals, and therapists stopped getting paid. The hack additionally restricted well being suppliers’ capacity to share medical information and different info essential to affected person care.
The cyberattack revealed an typically missed a part of how well being care is paid for in the US and raised considerations for antitrust advocates about how massive UnitedHealth has grown.
Host Dan Weissmann speaks with reporters Brittany Trang of Stat Information and Maureen Tkacik of The American Prospect about their reporting on the hack and what it says about antitrust enforcement of well being care firms.
Dan Weissmann
Host and producer of “An Arm and a Leg.” Beforehand, Dan was a workers reporter for Market and Chicago’s WBEZ. His work additionally seems on All Issues Thought of, Market, the BBC, 99 % Invisible, and Reveal, from the Heart for Investigative Reporting.
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Emily Pisacreta
Producer
Adam Raymonda
Audio wizard
Ellen Weiss
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Transcript: The Hack
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Dan: Hey there.
Brittany Trang is a reporter at STAT Information– that’s a well being care information outlet. We talked with Brittany’s colleague Bob Herman in our final episode. Like Bob, she’s been masking the enterprise of well being care.
And for Brittany, this story begins with Bob flagging a narrative to their crew. He…
Brittany Trang: Dropped a hyperlink within the chat that stated like, hey guys, I feel we must always write about this, query mark, and no one replied,
Dan: The story was a couple of cyber-attack towards an organization referred to as Change Healthcare.
Brittany Trang: I used to be like that appears like a startup and I used to be like who cares about some kind of well being tech startup
Dan: However Bob stored bringing it up.
Brittany Trang: And I lastly clicked on the hyperlink, and I used to be like, oh no, this can be a massive deal. This touches many of the American healthcare system.
Dan: Yeah, and it’s no joke. Change Healthcare is what’s referred to as a knowledge clearinghouse. And it’s an enormous one. It’s an essential a part of well being care’s monetary plumbing. Somebody had gone in and principally hijacked their laptop system and stated, Until we get $22 million {dollars}, we’re not giving it again. So Change went offline, and an enormous chunk of the nation’s Pharmacists, docs, therapists, hospitals simply stopped getting paid. And Change Healthcare stayed offline for weeks and weeks. As we report this, seven weeks in, massive components of it stay offline. And right here’s this different factor: Change Healthcare isn’t a startup. It’s been round for like 20 years. And in late 2022, Change obtained bought by one other firm– an organization that’s beginning to develop into an actual recurring character on this present: UnitedHealth Group.
You could bear in mind: They’re the nation’s greatest insurance coverage firm AND they’ve obtained their arms in nearly each different a part of well being care, in an enormous approach. For example, they’re the very greatest employer of physicians within the nation, by an enormous margin. They’ve obtained their very own financial institution, which– amongst different issues– gives payday loans to docs. And so they have an enormous assortment of firms that do back-end providers. In our final episode we heard about Navi Well being— and the way, below United’s possession, insurance coverage firms have been utilizing NaviHealth’s algorithm to chop off take care of individuals in nursing properties. [Boy, yeah– that was a fun story…] And as we’ve been studying: When one firm like this will get so massive, their issues– like this cyber-attack– develop into everyone’s drawback. And on this case, everyone’s drawback appears to create a possibility for United. We’ll break down how THAT may presumably work, however clearly it doesn’t seem to be the best way numerous us would WANT issues to work.. And we’ll find yourself speaking about what we will possibly do about it. Not “we” as in a bunch of people attempting to deal with an opponent this massive. Good luck with that. However “we” as within the “We the individuals” of the US Structure. We could already be on the case.
That is An Arm and a Leg– a present about why well being care prices so freaking a lot, and what we will possibly do about it. I’m Dan Weissmann. I’m a reporter, and I like a problem. So our job on this present is to take one of the enraging, terrifying, miserable components of American life, and convey you a present that’s entertaining, empowering, and helpful.
We’ll begin with an try to reply what you’d assume could be a easy query: What does Change Healthcare do?
Right here’s Brittany Trang from STAT Information once more.
Brittany Trang: It’s sort of like Visa or Mastercard or one thing. Like, whenever you go to the grocery retailer and also you pay with a bank card, you aren’t placing your cash straight into the pockets of the grocery retailer. There’s a intermediary in there and alter is that intermediary, however for a ton of various issues.
Dan: Like insurance coverage claims. Brittany says hospitals and docs workplaces typically don’t submit claims on to insurance coverage firms. They ship the declare to a intermediary like Change. After which Change figures out the place that declare must go subsequent. Like: I’m sending a bunch of mail– I put it multi functional mailbox, and the publish workplace figures out the right way to get it the place it goes. Besides after all, there’s no paper right here, no envelopes, no bodily packages: All these claims are principally information. Which is why an organization like Change is named a knowledge clearinghouse. And even when a given supplier makes use of another clearinghouse– and naturally there are others– Change should still be concerned. As a result of INSURANCE firms like Aetna additionally use Change as a spot to COLLECT claims from suppliers. On that facet, Change is sort of like a post-office field. However claims are simply one of many sorts of information that Change handles. For example…
Brittany Trang: whenever you went to the pharmacy counter or whenever you would verify in on the physician’s workplace and so they take your insurance coverage info and determine like what you’re going to pay for this go to. Each of these processes had been tousled.
Dan: Yeah, and there’s extra! Prior authorizations– like when your physician checks upfront to verify your insurance coverage firm is OK with paying for no matter. These all undergo firms like Change. So, if change is offline, do they do your MRI, or your surgical procedure– and simply hope it doesn’t get denied when Change comes again? And as soon as claims get accredited, information for funds goes by means of Change too. So funds– numerous funds– simply stopped going out. Right here’s Brittany Trang.
Brittany Trang: it’s simply sort of flabbergasting how massive that is. This collapsed most of healthcare not directly or one other.
Dan: Total, the numbers are wild: Change reportedly processes 1.5 trillion {dollars} a 12 months in claims. Possibly a 3rd of every part that occurs in healthcare. In keeping with the American Hospital Affiliation, 94 % of hospitals stated they had been affected. Some greater than others. Not all suppliers use Change as their major clearinghouse. However tons do. And for them, every part simply stopped.
Brittany Trang: I talked to 1 supplier she’s like, Oh, I can, I can discuss. I’m, right here at this time and tomorrow earlier than we shut. And I used to be like, earlier than we shut for spring break. And she or he stated, no, we now have 3 and 13 cents left in our checking account. Brittany says that supplier obtained a final minute reprieve– an emergency mortgage from United. There have been two or three rounds of those loans thus far, plus some advance funds from Medicare. However because the outage has dragged on– it began in February, and we’re recording this seven weeks later– it’s onerous to know if these are going to be sufficient. On the finish of March, I talked with Emily Benson. She runs a remedy apply in a Minneapolis suburb. Eight clinicians, principally treating children. She says the apply does possibly 70 or 80 thousand {dollars} value of enterprise a month. However then in February… Emily Benson: primarily every part went darkish for us.
Dan: United publicly acknowledged the Change hack on February twenty first. However Emily Benson says she didn’t truly get a heads-up till nearly per week later.
Emily Benson: numerous alarm bells went off, that was the top of the month. And so numerous funds got here due
Dan: Her hire. Paychecks for her colleagues, and herself.
Emily Benson: I imply, I used to be in a panic. Y’know, I didn’t know the place I used to be going to go.
Dan: She says she normally will get two funds per week from insurance coverage, with every part passing by means of Change. However it’s not simply the funds from insurance coverage. Change additionally offers the paperwork that say how a lot an insurance coverage firm is GOING to pay for any given declare.
Emily Benson: That’s a essential doc as a result of that tells me what does the household owe us. After which the beneficiary can be going to get that info. So that they’re not stunned by what we cost them. So now each week we’re stacking up and stacking up these quantities that the household’s going to owe us.
Dan: By the point we talked, Emily Benson had gotten two loans from United. About 40,000 every: possibly a month’s value of billing for her, between the 2 loans.
Emily Benson: That first one was worn out. Fairly rapidly as a result of now we’re on week 5 I’m engaged on the second, um, installment that I obtained from united. However, you understand, that’s half gone now too. So I don’t know what the subsequent step is. We’re nowhere close to. Getting claims processing but and so. I’m sort of panicking Yeah.
Emily Benson: it appears to be like just like the phrases are inside 45 days. You need to pay again that short-term mortgage. How am I going to do this if I don’t have claims coming?
Dan: God.
Emily Benson: I’m nonetheless panicking.
Dan: I’ll wager. Oh my God. You’re very, you’re very calm for anyone on this state of affairs.
Emily Benson: Nicely, you understand, I’ve had numerous remedy of my very own. That’s the way you develop into a therapist. So panicking doesn’t assist anybody.
Dan: I suppose that’s, I’ll take that below advisement.
Dan: So, to pay again these loans– that are purported to be repaid inside 45 days– Emily Benson is gonna have to start out getting paid once more. As we spoke, she’d had been dwelling with out techniques for submitting claims and getting paid for 5 weeks. And even when these techniques get transferring once more, she’s not gonna see all that cash instantly.
Emily Benson: Think about the backlog and the clog. 5 weeks value of insurance coverage claims I imply, we’re taking a look at a serious visitors jam.
Dan: Oh myGod.Andif everyone had been to work double time for the subsequent 5 weeks, then it could be 10 weeks. However individuals can’t actually work double time.
Emily Benson: Whenever you say that out loud,
Dan: Sorry.
Emily Benson: I don’t really feel as grounded,
Dan: I’m so sorry.
Emily Benson: however, however, however it’s most likely life like.
Dan: Different information retailers are speaking to suppliers like Emily Benson all around the nation. We’re recording this in mid-April. United hasn’t responded to our questions on this story, however their web site says “We’re decided to make this proper.” It says they’ve put out 4 level 7 billion {dollars} in emergency loans to suppliers thus far. And it says that for the overwhelming majority of Change Healthcare’s providers, a restoration date is “nonetheless pending.” We don’t know what’s going to occur. What it’ll imply for our docs, our therapists, our native hospitals. And look, there are parts of this story that transcend well being care. How many people have private well being info– possibly monetary info– that obtained seized by who the heck is aware of who on this? And sure, United’s getting some warmth. They obtained a listing of pointed questions from U.S. Consultant Jamie Raskin. Their CEO is meant to testify in a Senate listening to on the finish of April. However as we’ll get into in a minute, this catastrophe– United’s catastrophe– may end up to have a silver lining– for United: A chance to maintain on rising. And that chance arises exactly as a result of they’re so massive, and doing a lot enterprise in so many components of the medical-industrial complicated. Which doesn’t sound nice. It raises questions concerning the, uh, potential downsides for lots of people, when particular person firms get this freaking massive. And it raises questions on what we will possibly do about it. And the reply is: Possibly greater than we expect. That’s all coming proper up.
This episode of An Arm and a Leg is produced in partnership with KFF Well being Information. That’s a nonprofit newsroom masking well being care in America. Their reporters do superb work, and we’re honored to be in cahoots with them. So, as we’ve seen, an organization like United is so massive that their issues develop into everyone’s drawback. And no less than in a single case that I’ve seen thus far, everyone’s drawback can develop into United’s alternative. That’s what occurred in Oregon, and a reporter from Washington, DC, was able to make it a nationwide story.
Maureen Tkacik: My identify is Maureen Tkacik, however you’ll be able to name me Mo and I’m the Investigations Editor on the American Prospect, and a Senior Fellow on the American Financial Liberties Mission.
Dan: The Prospect is a politically-progressive information journal, and the Financial Liberties Mission is a non-profit that pushes an anti-monopoly agenda. Plenty of Mo’s reporting appears to be like at how monetary behemoths are trying like monopolists– particularly in well being care. So…
Maureen Tkacik: have come to know United Healthcare, fairly properly, over previous, 12 months or so,
Dan: , as an illustration, how they gobble up medical practices. And as we talked about, that sort of gobbling has made United the largest employer of physicians within the nation– by large margins– in simply the previous couple of years. About one doc in ten now works for them, as workers or “associates.” As we’ve reported earlier than, massive gamers– like United, like massive hospital techniques, and like non-public fairness teams– have been gobbling up medical practices for years. And: that sort of consolidation typically results in us paying extra– and sometimes for lousier healthcare. Moe Tkacik has been reporting on that sort of gobbling– and just lately, she’d been taking a look at how the state of Oregon had been attempting to sluggish it down. Then, in January 2024, a good-size medical group in Corvallis, Oregon stated they had been prepared for United to gobble them up. The group is named the Corvallis Clinic, and it’s obtained greater than 100 docs. However United and the Clinic must undergo an entire course of to get approval from state regulators. That course of contains: regulators asking the general public for feedback on the transaction. And on this case…
Maureen Tkacik: they had been. inundated with feedback.
Dan: Like 378 of them in only a few weeks. And the feedback had been overwhelmingly AGAINST the sale. In February, the regulators despatched United and Corvallis a 5-page listing of circumstances below which they may approve a deal. A supply of Moe’s despatched me the doc, which he obtained by means of a public-records request. The circumstances are like, to not cut back service ranges in the neighborhood for no less than 10 years. To maintain accepting non-United insurance coverage. And to undergo numerous monitoring. Then, as negotiations had been beginning, Change Healthcare went offline. And in early March, Moe obtained a tip: The clinic and United had been gonna make an finish run round this course of. She talked with an nameless insider on the clinic. Who instructed her: It seems that the entire clinic’s billing had been linked to Change.
Maureen Tkacik: So we’re speaking about only a calamitous money crunch. Their income got here to a standstill
Dan: And by the point Moe’s insider supply realized what was up– this had been occurring for 2 weeks.
Maureen Tkacik: this supply stated that , Thursday, all of them had a gathering and so they weren’t certain they had been going to have the ability to open their doorways the next Monday.
Dan: That was Thursday March 7. The subsequent day, March eighth, legal professionals for Corvallis Clinic filed an utility for an emergency exemption from the traditional assessment course of. Every week later, they obtained that exemption. And this time regulators had not demanded any circumstances. As Moe’s story laid out, United’s drawback– the Change Healthcare hack– turned everyone’s drawback, together with Corvallis. And their drawback appeared to have develop into United’s alternative. To gobble up the apply with out having to conform to any circumstances from pesky regulators. And a postscript to the Corvallis Clinic story: Shortly after regulators accredited that deal, United despatched notices to 1000’s of sufferers at one other clinic it had taken over in close by Eugene, saying principally: We don’t have a health care provider for you anymore. Goodbye and good luck. Information reviews stated that clinic had misplaced greater than 30 docs since United took over. And among the many public feedback urging regulators to kibosh the Corvallis clinic, a bunch of individuals cited awful experiences at that Eugene clinic below United’s possession. That is the sort of factor that Moe Tkacik and her colleagues on the American Financial Liberties Mission– and what’s develop into a sort of anti-monopoly motion– need to change. And right here’s the place this episode turns into possibly just a bit much less of a horror story, and possibly a bit of extra of an motion film. As a result of the anti-monopoly motion has gotten an enormous backer within the final three years: The Biden Administration. In 2017, a lady named Lina Khan made a reputation for herself in authorized circles when she printed a paper arguing that Amazon had develop into the sort of super-dominant firm that antitrust legal guidelines had been designed to constrain. Lina Khan was a legislation scholar when she printed that paper. In 2021, Joe Biden appointed her to guide the Federal Commerce Fee. The FTC and the Division of Justice cut up the job of antitrust enforcement, and so they’ve each develop into super-aggressive. They’ve filed massive lawsuits towards Google, Amazon, and– in March of this 12 months– Apple. And gotten a good quantity of consideration. As we had been writing up this episode, Jon Stewart interviewed Lina Khan on “The Every day Present.” And right here’s how she described her method in that dialog.
LK: We’ve actually targeted on how firms are behaving. Are they behaving in ways in which recommend they’ll hurt their prospects, hurt their suppliers, hurt their staff, and get away with it? And that sort of too massive to care sort method is actually what finally ends up signaling that an organization has monopoly energy as a result of they’ll begin mistreating you, however they know you’re caught.
Dan: Earlier this 12 months, the Wall Road Journal reported that Lina Khan’s allies– antitrust of us on the Division of Justice are investigating United. Neither the Justice Division nor United has commented on that report. That means: No person’s denied it. Thus far, a few of the Biden administration’s antitrust lawsuits have pan out, and a few haven’t. Really, in 2021, the Justice Division sued to stop UnitedHealth Group from shopping for Change Healthcare. That one, they misplaced. However when the sued to dam Penguin Random Home from shopping for one other big writer, Simon and Schuster, they gained. And as Lina Khan instructed Jon Stewart, she and her colleagues aren’t simply suing to stop mergers. They sued to get notorious Pharma Bro Martin Skhreli banned for all times from the pharma commerce. And so they gained. And so they’re taking a look at different methods massive firms, particularly in well being care, screw individuals.
LK: Simply to provide you one instance, inhalers. They’ve been round for many years, however they nonetheless price tons of of {dollars}. So our workers took an in depth look and we’ve realized the, a few of the patents that had been listed for these inhalers had been improper. There have been bogus. And so we despatched tons of of warning letters round these patents. And in the previous couple of weeks, we’ve seen firms deal listing these patents and three out of the 4 main producers have now stated, Inside a few months, they’re going to cap how a lot Individuals pay to simply 35.
Dan: I feel we must always begin paying much more consideration to what Lina Khan and her colleagues are as much as– and what their chances are high. I’ve began studying up, and getting in contact with of us who’re on this struggle, and who’re watching it intently. As a result of that is trying just like the sort of motion film I sort of like. In the meantime, I’m posting a hyperlink to Jon Stewart’s interview with Lina Khan wherever you’re listening to this. I’ll have a couple of different hyperlinks for you in our e-newsletter– you’ll be able to join that at arm and a leg present dot com, slash, e-newsletter. And I’ll catch you in a couple of weeks. Until then, handle your self.
This episode of an arm and a leg was produced by me, Dan Weissmann, with assist from Emily Pisacreta, and edited by Ellen Weiss. Large thanks this time to the novelist, journalist and activist Cory Doctorow, who has been writing concerning the antitrust revival for years, breaking down complicated, technical tales in clear, accessible methods. Because of professor Spencer Waller from the Loyola College Chicago legislation college for speaking about antitrust with me. And because of Dr. John Santa in Oregon– for sharing materials he obtained through a public-records request to the state, and for his observations. Adam Raymonda is our audio wizard. Our music is by Dave Weiner and blue dot periods. Additional music on this episode from Epidemic Sound. Gabrielle Healy is our managing editor for viewers. She edits the primary help package e-newsletter. Bea Bosco is our consulting director of operations. Sarah Ballama is our operations supervisor. And Armand a Leg is produced in partnership with KFF Well being Information. That’s a nationwide newsroom producing in depth journalism about healthcare in America and a core program at KFF, an unbiased supply of well being coverage analysis, polling and journalism. Zach Dyer is senior audio producer at KFF Well being Information. He’s editorial liaison to this present. And because of the Institute for Nonprofit Information for serving as our fiscal sponsor, permitting us to simply accept tax exempt donations. You possibly can study extra about INN at INN. org. Lastly, due to everyone who helps this present financially– you’ll be able to take part any time at arm and a leg present dot com, slash, help– and thanks for listening.
“An Arm and a Leg” is a co-production of KFF Well being Information and Public Street Productions.
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