When Change Healthcare, a subsidiary of UnitedHealth Group, bought hit by a cyberattack this winter, an enormous chunk of the nation’s medical doctors, pharmacists, hospitals, and therapists stopped getting paid. The hack additionally restricted well being suppliers’ capacity to share medical information and different info crucial to affected person care.
The cyberattack revealed an typically ignored a part of how well being care is paid for in the US and raised issues 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 corporations.
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-about, Market, the BBC, 99 P.c Invisible, and Reveal, from the Heart for Investigative Reporting.
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Emily Pisacreta
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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 protecting the enterprise of well being care.
And for Brittany, this story begins with Bob flagging a narrative to their staff. He…
Brittany Trang: Dropped a hyperlink within the chat that stated like, hey guys, I believe we should always write about this, query mark, and no person replied,
Dan: The story was a few 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 form 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, it is a large deal. This touches many of the American healthcare system.
Dan: Yeah, and it’s no joke. Change Healthcare is what’s referred to as an information 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, Except we get $22 million {dollars}, we’re not giving it again. So Change went offline, and an enormous chunk of the nation’s Pharmacists, medical doctors, therapists, hospitals simply stopped getting paid. And Change Healthcare stayed offline for weeks and weeks. As we document this, seven weeks in, large components of it stay offline. And right here’s this different factor: Change Healthcare will not be a startup. It’s been round for like 20 years. And in late 2022, Change bought bought by one other firm– an organization that’s beginning to develop into an actual recurring character on this present: UnitedHealth Group.
You might keep in mind: They’re the nation’s greatest insurance coverage firm AND they’ve bought their fingers in nearly each different a part of well being care, in an enormous manner. As an illustration, they’re the very greatest employer of physicians within the nation, by an enormous margin. They’ve bought their very own financial institution, which– amongst different issues– provides payday loans to medical doctors. And so they have an enormous assortment of corporations that do back-end providers. In our final episode we heard about Navi Well being— and the way, below United’s possession, insurance coverage corporations have been utilizing NaviHealth’s algorithm to chop off take care of individuals in nursing houses. [Boy, yeah– that was a fun story…] And as we’ve been studying: When one firm like this will get so large, their issues– like this cyber-attack– develop into everyone’s downside. And on this case, everyone’s downside appears to create a chance for United. We’ll break down how THAT might presumably work, however clearly it doesn’t appear to be the way in which a whole lot of us would WANT issues to work.. And we’ll find yourself speaking about what we are able to perhaps do about it. Not “we” as in a bunch of people making an attempt to deal with an opponent this large. Good luck with that. However “we” as within the “We the individuals” of the US Structure. We might 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 are able to perhaps 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 some of the enraging, terrifying, miserable components of American life, and produce you a present that’s entertaining, empowering, and helpful.
We’ll begin with an try and reply what you’d suppose can 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, if you go to the grocery retailer and also you pay with a bank card, you aren’t placing your cash instantly 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 medical doctors places of work typically don’t submit claims on to insurance coverage corporations. 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 function mailbox, and the put up workplace figures out methods to get it the place it goes. Besides in fact, there’s no paper right here, no envelopes, no bodily packages: All these claims are principally information. Which is why an organization like Change known as an information clearinghouse. And even when a given supplier makes use of another clearinghouse– and naturally there are others– Change should be concerned. As a result of INSURANCE corporations like Aetna additionally use Change as a spot to COLLECT claims from suppliers. On that aspect, Change is sort of like a post-office field. However claims are simply one of many kinds of information that Change handles. As an illustration…
Brittany Trang: if you went to the pharmacy counter or if 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 have been tousled.
Dan: Yeah, and there’s extra! Prior authorizations– like when your physician checks upfront to ensure your insurance coverage firm is OK with paying for no matter. These all undergo corporations 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 accepted, information for funds goes by means of Change too. So funds– a whole lot of funds– simply stopped going out. Right here’s Brittany Trang.
Brittany Trang: it’s simply sort of flabbergasting how large that is. This collapsed most of healthcare in a roundabout way or one other.
Dan: Total, the numbers are wild: Change reportedly processes 1.5 trillion {dollars} a 12 months in claims. Perhaps a 3rd of all the pieces that occurs in healthcare. In line with the American Hospital Affiliation, 94 % of hospitals stated they have been affected. Some greater than others. Not all suppliers use Change as their main clearinghouse. However tons do. And for them, all the pieces simply stopped.
Brittany Trang: I talked to at least one supplier she’s like, Oh, I can, I can discuss. I’m, right here right this moment 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 bought 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 exhausting to know if these are going to be sufficient. On the finish of March, I talked with Emily Benson. She runs a remedy follow in a Minneapolis suburb. Eight clinicians, largely treating children. She says the follow does perhaps 70 or 80 thousand {dollars} value of enterprise a month. However then in February… Emily Benson: primarily all the pieces went darkish for us.
Dan: United publicly acknowledged the Change hack on February twenty first. However Emily Benson says she didn’t really get a heads-up till virtually every week later.
Emily Benson: a whole lot of alarm bells went off, that was the tip of the month. And so a whole lot of funds got here due
Dan: Her lease. 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 often will get two funds every week from insurance coverage, with all the pieces passing by means of Change. But it surely’s not simply the funds from insurance coverage. Change additionally supplies the paperwork that say how a lot an insurance coverage firm is GOING to pay for any given declare.
Emily Benson: That’s a crucial doc as a result of that tells me what does the household owe us. After which the beneficiary can also be going to get that info. In order 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: perhaps 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 bought from united. However, you realize, 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. It’s a must to pay again that short-term mortgage. How am I going to try 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 any person on this state of affairs.
Emily Benson: Effectively, you realize, I’ve had a whole lot of 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 alleged to be repaid inside 45 days– Emily Benson is gonna have to begin getting paid once more. As we spoke, she’d had been dwelling with out programs for submitting claims and getting paid for 5 weeks. And even when these programs get shifting 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 significant site visitors jam.
Dan: Oh myGod.Andif everyone have been to work double time for the subsequent 5 weeks, then it might 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, but it surely’s most likely real looking.
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 medical doctors, our therapists, our native hospitals. And look, there are components of this story that transcend well being care. How many people have private well being info– perhaps monetary info– that bought seized by who the heck is aware of who on this? And sure, United’s getting some warmth. They bought 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– might end up to have a silver lining– for United: A possibility to maintain on rising. And that chance arises exactly as a result of they’re so large, and doing a lot enterprise in so many components of the medical-industrial advanced. Which doesn’t sound nice. It raises questions concerning the, uh, potential downsides for lots of people, when particular person corporations get this freaking large. And it raises questions on what we are able to perhaps do about it. And the reply is: Perhaps 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 protecting well being care in America. Their reporters do wonderful work, and we’re honored to be in cahoots with them. So, as we’ve seen, an organization like United is so large that their issues develop into everyone’s downside. And at the very least in a single case that I’ve seen thus far, everyone’s downside 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 possibly can name me Mo and I’m the Investigations Editor on the American Prospect, and a Senior Fellow on the American Financial Liberties Challenge.
Dan: The Prospect is a politically-progressive information journal, and the Financial Liberties Challenge is a non-profit that pushes an anti-monopoly agenda. Quite a lot 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 nicely, over previous, 12 months or so,
Dan: , as an example, 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 enormous margins– in simply the previous few years. About one doc in ten now works for them, as staff or “associates.” As we’ve reported earlier than, large gamers– like United, like large hospital programs, and like personal fairness teams– have been gobbling up medical practices for years. And: that sort of consolidation typically results in us paying extra– and infrequently for lousier healthcare. Moe Tkacik has been reporting on that sort of gobbling– and not too long ago, she’d been taking a look at how the state of Oregon had been making an attempt to gradual it down. Then, in January 2024, a good-size medical group in Corvallis, Oregon stated they have been prepared for United to gobble them up. The group known as the Corvallis Clinic, and it’s bought greater than 100 docs. However United and the Clinic must undergo an entire course of to get approval from state regulators. That course of consists of: regulators asking the general public for feedback on the transaction. And on this case…
Maureen Tkacik: they have been. inundated with feedback.
Dan: Like 378 of them in only a few weeks. And the feedback have been overwhelmingly AGAINST the sale. In February, the regulators despatched United and Corvallis a 5-page checklist of circumstances below which they could approve a deal. A supply of Moe’s despatched me the doc, which he bought by means of a public-records request. The circumstances are like, to not cut back service ranges in the neighborhood for at the very least 10 years. To maintain accepting non-United insurance coverage. And to undergo a whole lot of monitoring. Then, as negotiations have been beginning, Change Healthcare went offline. And in early March, Moe bought a tip: The clinic and United have been gonna make an finish run round this course of. She talked with an nameless insider on the clinic. Who informed 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 happening for 2 weeks.
Maureen Tkacik: this supply stated that , Thursday, all of them had a gathering and so they weren’t certain they have been going to have the ability to open their doorways the next Monday.
Dan: That was Thursday March 7. The subsequent day, March eighth, attorneys for Corvallis Clinic filed an software for an emergency exemption from the conventional overview course of. Per week later, they bought that exemption. And this time regulators had not demanded any circumstances. As Moe’s story laid out, United’s downside– the Change Healthcare hack– grew to become everyone’s downside, together with Corvallis. And their downside appeared to have develop into United’s alternative. To gobble up the follow with out having to conform to any circumstances from pesky regulators. And a postscript to the Corvallis Clinic story: Shortly after regulators accepted 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 physician for you anymore. Goodbye and good luck. Information experiences stated that clinic had misplaced greater than 30 medical doctors 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 Challenge– and what’s develop into a sort of anti-monopoly motion– wish to change. And right here’s the place this episode turns into perhaps just a bit much less of a horror story, and perhaps slightly 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 have been designed to constrain. Lina Khan was a regulation pupil when she printed that paper. In 2021, Joe Biden appointed her to guide the Federal Commerce Fee. The FTC and the Division of Justice break up the job of antitrust enforcement, and so they’ve each develop into super-aggressive. They’ve filed large lawsuits towards Google, Amazon, and– in March of this 12 months– Apple. And gotten a good quantity of consideration. As we have been writing up this episode, Jon Stewart interviewed Lina Khan on “The Day by day Present.” And right here’s how she described her method in that dialog.
LK: We’ve actually centered on how corporations are behaving. Are they behaving in ways in which counsel they will hurt their prospects, hurt their suppliers, hurt their employees, and get away with it? And that sort of too large to care sort method is basically what finally ends up signaling that an organization has monopoly energy as a result of they will begin mistreating you, however they know you’re caught.
Dan: Earlier this 12 months, the Wall Avenue 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. Which means: No person’s denied it. To date, a number of the Biden administration’s antitrust lawsuits have pan out, and a few haven’t. Truly, 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 large writer, Simon and Schuster, they received. And as Lina Khan informed 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 received. And so they’re taking a look at different methods large corporations, particularly in well being care, screw individuals.
LK: Simply to offer you one instance, inhalers. They’ve been round for many years, however they nonetheless price a whole lot of {dollars}. So our workers took a detailed look and we’ve realized the, a number of the patents that had been listed for these inhalers have been improper. There have been bogus. And so we despatched a whole lot of warning letters round these patents. And in the previous few weeks, we’ve seen corporations deal checklist 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 People pay to simply 35.
Dan: I believe we should 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 combat, and who’re watching it carefully. 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 number of different hyperlinks for you in our e-newsletter– you possibly can join that at arm and a leg present dot com, slash, e-newsletter. And I’ll catch you in a number 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. Massive thanks this time to the novelist, journalist and activist Cory Doctorow, who has been writing concerning the antitrust revival for years, breaking down advanced, technical tales in clear, accessible methods. Because of professor Spencer Waller from the Loyola College Chicago regulation faculty for speaking about antitrust with me. And because of Dr. John Santa in Oregon– for sharing materials he bought 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 classes. Additional music on this episode from Epidemic Sound. Gabrielle Healy is our managing editor for viewers. She edits the primary support equipment 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 just accept tax exempt donations. You may be taught extra about INN at INN. org. Lastly, because of everyone who helps this present financially– you possibly can 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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