Image by kalhh from PixabayUnitedHealth Group (NYSE: UNH) is reportedly demanding that health care providers repay loans they received from the insurer in the wake of a massive cyberattack last year on subsidiary Change Healthcare.
In February of last year, a ransomware attack brought down a swath of Change Healthcare’s payment and processing systems. This shutdown lasted for months, causing far-reaching disruptions that impacted providers across the country.
Physicians, ambulatory surgery centers (ASCs) and various practice groups found themselves scrambling to manage workflows without reliable systems. To help these providers stay afloat, UnitedHealth Group extended a $9 billion in loans.
Now, the health care giant is seeking immediate repayment or withholding reimbursements, according to several news reports.
Health care operators are now discovering that the language in their loan agreements may grant UnitedHealth wide latitude to demand immediate repayment.
“It looks like a case of understanding what is in the contract from a repayment standpoint,” Michael McClain, managing partner at Left Coast healthcare advisors, told Ambulatory Surgery Center News. “Practices and ASCs alike need to understand fully what is in the contracts they sign and never expect that what is said in the public media ecosphere matters. It’s what on paper that matters.”
The original arrangement included a clause stating that if the loans were not repaid within the agreed timeframe, UnitedHealth could garnish future reimbursements or even debit bank accounts.
Optum, the UnitedHealth subsidiary responsible for issuing repayment notices, has sent emails stipulating that recipients must repay all outstanding loan balances within days or risk having reimbursements withheld. And some physicians have also reported inconsistencies in the amounts being demanded, Rachel Carey, counsel at Whiteford, Taylor & Preston LLP, told ASC News.
“[Physcians] are just not in a great place, because a lot of the language is very explicit in there, and that lets them get bullied like this,” Carey said.
The right to audits and clawbacks is common in health care contracts, she added. But, in the language for these particular loans, the clauses allow UnitedHealth to demand immediate repayment and debit any past due amounts from the provider’s bank accounts, then offset any funding amount.
“They can do all three of those things,” Carey said. “They can either write a minute demand letter, or they can pull the money from the bank account, or they can offset money coming in. Or they can do all three, obviously.”
Smaller independent practices will be hit the hardest.
“Any sort of practice that’s still trying to be independent is really the ones that are struggling with this,” Carey said.
For ASCs and independent practices that may be facing these urgent notices, Carey advised that providers conduct a diligent review of the amounts demanded.
“First thing that you should always do is just make sure that the amount that they’re asking for is correct, and if it’s not, then dispute the amount,” she said.
She also encouraged practices to band together, leverage professional associations, and even involve local or state representatives. Establishing realistic payment plans should be a priority, given the magnitude of the debt, she said.
“Try to use those relationships with the associations and some of the local delegates as well. … That might be something good for them to use and bring forward,” Carey said, adding that collective action might prompt UnitedHealth to reconsider the pressure it is exerting on providers.
And there has already been some pushback. A large class-action lawsuit was filed by dozens of providers against UnitedHealth Group in Minnesota, with a litany of claims against the insurance giant.
Still, for smaller independent practices, this can be the final straw in an already tough environment dominated by rising expenses and shifting reimbursements. Despite repaying $3.2 billion of the $9 billion loaned, health care providers still owe billions.
“I can only imagine that if a significant number of ASCs took advantage of similar loans, that recoupment will hit ASCs at a time when they are already reeling from rising labor and supply costs, stagnate reimbursement, and ballooning anesthesia expenses,” McClain said. “This won’t do anything to expand access to affordable care.”
