Repercussions of Cyberattack on Change Healthcare

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Summary

A major cyberattack has disrupted medical and pharmacy claims processing and is expected to impact how medical claims are submitted and paid in the future.

On February 21, 2024, Change Healthcare, the largest processor of pharmacy and medical claims in the United States, was the target of a cyberattack that resulted in widespread outages broadly impacting access to their processing systems. As a result, payers who previously relied on Change as their primary communication gateway with providers are now shifting to alternative clearinghouses. This transition has led to providers and pharmacies batching their claims, experiencing delays in payment, or setting up new clearinghouses for claims processing.

Clearinghouses like Change Healthcare play an essential role in the timely transfer of information from medical providers to healthcare payers. While efforts have been made to restore connectivity, Change has reported that their claims processing services are still down. Recent communication from Change indicates that the outages are expected to be long term.

Impact on Life Sciences Sector

Claims clearinghouses, also known as “switches,” are a major component of the core data utilized by life sciences companies for commercial product tracking.  Especially impacted are medical claims, including those for infused pharmacy products. Major pharmacy claims datasets often rely on data collected directly from large chain pharmacies rather than intermediaries.

Clearinghouses typically provide data to data brokers in slightly different formats, resulting in variations in the information received by each broker from different partners. Regardless of the combination of clearinghouses partnered with the data broker, changes in the clearinghouse landscape can have multiple impacts including:

  • Reduced volume as providers withhold claims in anticipation of a resumption of service.
  • Disruption in reported product volumes trends due to a change in the mix of clearinghouses which either do or do not partner with each data broker.

Navigating the Impact of the Cyberattack

To mitigate the effects of the Change cyberattack, life sciences firms can:

  • Partner with data providers on short-term strategy: Understand the plan each data broker has for comprehending and quantifying the changes resulting from this cyberattack.
  • Understand data provenance: Work internally to gain a foundational understanding of from where the data provided by your data broker is sourced. This will allow your organization to be ahead of the curve as future changes in the data landscape occur.  Data aggregations where source is unknown may be attractive from a financial or data volume perspective but come with risk when market events, such as consolidation of data brokers, switches in provider and payer of intermediaries, or another cyberattack, occur.
  • Engage with experts: Avalere has rich experience engaging with life sciences companies to help them understand the impact of market events on claims data trends.

To learn more about how to mitigate impacts from the Change Healthcare cyberattack, connect with us.

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