CMS Releases Medicaid Payment Flexibilities During Change Cyberattack

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Dive Brief:

• The CMS on Friday released flexibilities for state Medicaid agencies to offer financial relief to providers during the outage at Change Healthcare, which has created significant operational challenges for nearly a month. 
• The agency urged states to submit Medicaid state plan amendments so they can make interim payments to providers who are unable to submit claims while Change restores its systems. 
• Ninety-four percent of hospitals reported financial impact from the cyberattack against UnitedHealth-owned Change, with more than half experiencing “significant or serious” effects, according to a survey conducted this month by the American Hospital Association.

Dive Insight:

The cyberattack at Change has snarled the healthcare sector since late February, an incident that the AHA has called “the most significant and consequential” of its kind against the industry in its history. 

Providers have reported a number of challenges during the weeks-long outage, including problems receiving payment from patients and insurers, verifying coverage, submitting prior authorization requests or exchanging clinical records.

Change, which was acquired by insurer UnitedHealth Group in 2022, is one of the nation’s largest insurance claims processing centers and touches one in every three patient records. In a Monday press release, UnitedHealth said its electronic payments platform and claims network would begin coming back online this week. 

In the latest update, the CMS said states could make interim payments retroactive to when the outage began late last month, and flexibilities would be available through the end of June. 

The agency also reopened an application to report extreme and uncontrollable circumstances under the Merit-based Incentive Payment System, or MIPS, which reimburses Medicare providers for quality improvements. 

Nearly 60% of hospitals surveyed by the AHA said the hit to their revenue from the attack is $1 million per day or greater, and 44% said they expect the negative revenue impact to last for two to four more months. 

Nearly three-quarters of hospitals said there was direct patient care impact, with almost 40% reporting patient difficulty accessing care because of delays processing health plan utilization requirements, like prior authorization. 

Federal regulators have moved to ease the financial stress on providers, including offering applications for Medicare accelerated or advance payments. Officials from the White House and the HHS called on payers last week to cut red tape and offer financial support to affected providers.