By Patrick Wingrove
(Reuters) - The Feb. 21 ransomware hack at UnitedHealth Group (NYSE:UNH)'s Change Healthcare (NASDAQ:CHNG) technology unit, which processes insurance claims and payments for the industry, has disrupted healthcare across the United States.
The Change unit processes about 50% of medical claims in the U.S. for around 900,000 physicians, 33,000 pharmacies, 5,500 hospitals and 600 laboratories. The following are some of its largest businesses and UnitedHealth's plans for how and when to fix them:
PRESCRIPTION DRUG PROCESSING
Change acts as a financial clearing house for pharmacy benefit managers (PBMs), the middlemen for employers and health plans that create lists of medications that are covered by insurance plans and reimburse pharmacies for patients' prescriptions. Without that technology, pharmacies could not verify if a patient was covered by their healthcare plan for a particular drug and how much that patient was expected to pay out of pocket.
UnitedHealth says its Change Healthcare pharmacy network will be back online for most pharmacies as soon as Thursday.
PRESCRIPTION DRUG COUPONS
UnitedHealth's tech unit processes discounts that manufacturers offer on some of their drugs through electronic coupons. Pharmacies could not apply many of these coupons when Change's systems went down, leaving patients to pay full price for the drugs upfront. Some manufacturers, including Eli Lilly (NYSE:LLY), offered to reimburse patients for the amount their coupons would have covered.
UnitedHealth says its pharmacy network reconnection planned for Thursday will allow the majority of coupons it manages to again be processed. Coupons handled by rival McKesson (NYSE:MCK)'s RelayHealth have not been disrupted.
INSURANCE CLAIMS
Healthcare providers including hospitals submit health insurance claims to Change, which sends them to health insurance companies to evaluate and process. After the cyberattack, these providers lost a primary means of processing payments for their services through patients' healthcare plans, forcing some to absorb the upfront costs.
UnitedHealth said recovery of its medical network will take "longer than the pharmacy network," but did not say when it expected systems to be restored.
It said it recommended providers and vendors switch to a claims connection run by its PBM unit Optum, but said other workarounds needed to be designed due to "connection incompatibility."