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Barron's How the UnitedHealth Hack Is Creating Havoc in Healthcare

The snapping of one of the nearly invisible cords that binds the U.S. healthcare system together is taking longer than expected to repair, creating the risk of a financial crunch across the sector.

A ransomware hack of a UnitedHealth Group -owned technology provider called Change Healthcare, disclosed on Feb. 21, has yet to be resolved. Many of Change Healthcare’s systems remain offline.

The company, which is part of UnitedHealth’s Optum health services division, says that one in every three U.S. patient records is “touched” by its “clinical connectivity solutions.” That makes it an enormous part of the network of financial mechanisms that facilitate America’s convoluted healthcare system.

Its bewilderingly long list of software products includes the tools that help many providers process insurance claims. Those systems remain out of action, threatening a financial disaster for doctors and hospitals, which need to process claims to fund their operations.

In a statement on Thursday, the American Hospital Association said that a persistent outage could mean that hospitals and health systems won’t be able to meet payroll. “Some hospitals and health systems may be unable to pay salaries for clinicians and other members of the care team, acquire necessary medicines and supplies, and pay for mission critical contract work in areas such as physical security, dietary and environmental services,” the organization said.

In the days following the attack, the most attention has been paid to how the shutdown affects pharmacies, where it has resulted in delays filling prescriptions. That may not end up being where the damage is worst, however.

According to UnitedHealth, the impact on pharmacies has been largely addressed. It told Barron’s that most of the nation’s pharmacies are still able to file claims online, and that “less than 100” people have been unable to fill prescriptions due to the outage out of the 65 million people served by its pharmacy benefit manager, which contracts for drug purchases on behalf of insurers and employers.

The company acknowledged, however, that the inability for providers to file claims is a looming problem.

“We understand the impact this issue has had on claims for payers and providers,” UnitedHealth said in its statement. “Any delays to claims processing have yet to impact provider cash flows as payers typically pay one to two weeks after processing. As we work on bringing systems back online, we are also developing solutions to that challenge if needed.”

Based on that timeline, providers could already be experiencing an effect on their cash flows, with more significant impacts hitting by the middle of next week. More than a week has passed since the hack was disclosed.