Outages from Change Healthcare cyberattack causing financial ‘mess’ for doctors

Published

1 year ago

February 29, 2024

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Small private practices and health-care providers are facing mounting financial pressures as crucial reimbursement systems remain down for the ninth day, following the cyberattack on Change Healthcare.

Change Healthcare offers tools for payment and revenue cycle management that help facilitate transactions between providers and most major insurance companies. Its parent company UnitedHealth Group discovered that a cyber threat actor breached part of the unit’s information technology network on Feb. 21, according to a filing with the U.S. Securities and Exchange Commission.

As a result, the company isolated and disconnected the impacted systems “immediately upon detection” of the threat, the filing said.

The fallout has caused a ripple of disruption across the U.S. health-care system.

Doctors told CNBC the outage has left them unable to check patients’ eligibility for treatment or fill prescriptions electronically, which has created more administrative responsibility for workers that are already overwhelmed by clerical work. Perhaps more importantly, providers have been unable to receive reimbursements from insurers, effectively grinding many health systems’ revenue cycles to a halt.

Smaller and mid-sized practices that rely on reimbursement cash flow to operate are making tough decisions about how to stay afloat. If the outage drags on for too long, experts say some practices may have to close their doors for good.

Dr. Purvi Parikh, an allergist and immunologist with a private practice in New York City, told CNBC that the breach has been a “mess” and a “big stressor.” Like many others, she said her practice hasn’t been able to receive reimbursements from insurers for patient visits, which makes it difficult for the practice to pay for operational expenses like payroll and medical supplies.

Switching to a new platform could take weeks, Parikh said, so there’s no immediate workaround available. As of Thursday, Change Healthcare has not shared any updates about when it expects its systems to be back online.

“The most frustrating part is that nobody has any answers or solutions,” Parikh said. “We’re kind of just stuck.”

Change Healthcare on Thursday said that ransomware group Blackcat is behind the attack. Blackcat, also called Noberus and ALPHV, steals sensitive data from institutions and threatens to publish it unless a ransom is paid, according to a December release from the U.S. Department of Justice.

The company said it is working with law enforcement and third party consultants like Mandiant, which is owned by Google, and cybersecurity software vendor Palo Alto Networks to assess the breach.

“Patient care is our top priority and we have multiple workarounds to ensure people have access to the medications and the care they need,” Change Healthcare said in a statement to CNBC.

Dr. Kiranjit Khalsa, an allergist and immunologist who runs an independent practice in Scottsdale, Arizona, said her staff has been working longer hours to try and accommodate the extra work as a result of the breach, as well as manually calling in prescriptions.

She said the problems around reimbursement have been the “biggest burden,” since she is worried about how she can continue to support her patients and employees. Khalsa is considering cutting back hours for staff and even closing the clinic for a few days.

“I worry about providing for them,” Khalsa told CNBC in an interview. “I also worry about: Where am I going to get this money if it does not come through? Do I need to take a loan out to keep the clinic afloat?”

Even when Change Healthcare’s systems do come back online, there are a lot of unanswered questions about what will happen next, according to Dr. Dan Inder Sraow, an interventional cardiologist who owns a private practice around Phoenix, Arizona. He said it’s not clear whether Change Healthcare will take on the responsibility of processing all the claims or if he’ll need to hire additional staff to help.

“I don’t think that people are aware that the actual people providing the services are not able to extract revenue for those services,” Dr. Sraow told CNBC. “We don’t know how long that’s going to be, and that’s such a dangerous, dangerous thing.”

Dr. Jesse Ehrenfeld, president of the American Medical Association, said he has spent days fielding calls from concerned colleagues.

He said he spoke with one doctor who runs an oncology practice and only has up to two weeks’ worth of cash on hand. If the outage drags out, the practice won’t be able to buy the chemotherapy that its patients depend on for treatment.

Since many providers are operating on razor-thin margins, Ehrenfeld said there is a possibility that some will go out of business.

“We have so many practices that are on the fringe, particularly smaller practices, where they are just scraping by,” Ehrenfeld told CNBC in an interview. “Any aberration in the system where, ‘Oh, you don’t get checks for two weeks,’ obviously is a situation that does put practices at risk.”

In 2022, Change Healthcare merged with the provider Optum, which services more than 100 million patients in the U.S. and is owned by UnitedHealth, the country’s biggest health-care company by market cap.

The American Medical Association vocally opposed the merger, writing in a letter to the DOJ that the union could stifle competition, give UnitedHealth access to large data stores and potentially disrupt patient care.

The merger ultimately went through, but the DOJ has recently launched an antitrust investigation into UnitedHealth, according to a Wall Street Journal report Tuesday.

“It’s just sort of like a perfect storm of regulatory issues [and] lack of competition — and unfortunately, the people who are really going to suffer are patients and individuals who work in the healthcare system,” said Dr. Ravi Parikh, a retina specialist that owns and operates a practice in New York City.

The cyberattack has left Parikh’s clinic without a way to receive reimbursements for the expensive medications it administers. He said he has been thinking about contingency plans, such as seeking out cheaper medications and asking some patients to pay upfront, but his focus is on providing the best care possible.

“The health care system could eventually come to a halt because a lot of clinics and pharmacies might not be viable,” Parikh said.

Technology

It’s a huge week for crypto in D.C. But the industry may not get everything it wants

Published

1 hour ago

July 15, 2025

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It's a huge week for crypto in D.C. But the industry may not get everything it wants

The U.S. Capitol building in Washington, D.C., U.S., June 27, 2025.

Elizabeth Frantz | Reuters

It’s “Crypto Week” in Washington.

The cryptocurrency industry is set to notch a major win this week if the House can pass two bills that would set up a long-lobbied-for regulatory framework for digital assets.

The stablecoin bill, known as the GENUIS Act, has already passed the Senate and looks set to become the first standalone crypto measure signed into law should the House do the same.

But the real prize for the industry is a wider and more complex bill on market structure called the CLARITY Act, which faces a more difficult path to President Donald Trump‘s desk.

Seeking CLARITY

The CLARITY Act sets the rules for when an asset is considered a security and overseen by the Securities and Exchange Commission versus when it’s considered a commodity that is overseen by the Commodity Futures Trading Commission, or CFTC.

The act is likely to pass the House on Wednesday, given the bipartisan support when the bill cleared two committees. But the path in the Senate is murky, as Democrats could withhold their support over concerns about how Trump and his family are benefiting from crypto.

The Trump family’s growing crypto empire includes $TRUMP and $MELANIA meme coins, a stablecoin, and a decentralized finance firm called World Liberty Financial, among other ventures.

Some lawmakers who backed the narrower stablecoin bill did so with the hopes of seeing the wider market structure package address conflicts of interest.

“President Trump’s crypto corruption distorts the digital asset marketplace,” said Sen. Raphael Warnock, D-Ga., who voted for the stablecoin bill. “Writing a bill with a corruption caveat for the president sends a clear message — that Congress is not serious about addressing corruption, which we know undermines investors’ faith in capital markets.”

Pushing it to pass

Coinbase attempted to literally sweeten the deal on the CLARITY Act for lawmakers with an advertising push that included handing out about 5,000 chocolate bars around D.C.

The candy wrappers cited a Morning Consult poll that found about “1 in 5” Americans own crypto.

Coinbase, Ripple and other crypto companies are lobbying Congress to put their concerns aside and back the market structure package, anticipating that more regulatory certainty will encourage more investment in crypto.

“When consumers buy and sell and trade these digital assets, they want to know what they’re getting and they want to know that they’re using a reputable intermediary,” Coinbase Vice President of U.S. Policy Kara Calvert told CNBC. “And what this bill does is provide that construct to do that.”

GENIUS and the Fed

The House is scheduled for a GENIUS Act vote on Thursday.

The package cleared the Senate last month with 18 Democrats joining most Republicans to support the measure.

The House stood down on their own version of the bill under pressure from Trump, who told lawmakers via a Truth Social post to “Get it to my desk, ASAP — NO DELAYS, NO ADD ONS.”

In addition to the two major bills the crypto industry has pushed for, the House will take up a separate measure that would prevent the Federal Reserve from issuing a central bank digital currency (CBDC).

The bill is expected to pass in a vote scheduled for Wednesday.

Blockchain Association CEO Summer Mersinger said the crypto industry supports the bill.

“If this is something the private sector should do, the government should not be competing,” she said.

Technology

Coreweave stock pops after company announces $6 billion AI data center in Pennsylvania

Published

2 hours ago

July 15, 2025

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Coreweave stock pops after company announces billion AI data center in Pennsylvania

CoreWeave Inc. signage in Times Square in New York, US, on Friday, May 9, 2025.

Yuki Iwamura | Bloomberg | Getty Images

Coreweave stock climbed more than 9% on Tuesday after the company announced a $6 billion artificial intelligence data center project in Pennsylvania.

The commitment includes an initial 100 megawatt data center built in Lancaster, a city about 70 miles west of Philadelphia. The data center will be able to expand to 300 MW.

“The demand for high-performance AI compute is relentless,” said CoreWeave CEO Michael Intrator in a release, “and CoreWeave is scaling a cloud purpose-built for AI to meet it and strengthen US leadership.”

The announcement comes as part of the Pennsylvania Energy and Innovation Summit in Pittsburgh hosted by Sen. Dave McCormick, R-Penn., where President Donald Trump, members of his administration and executives are meeting to discuss AI and investment opportunities in the state.

Tesla’s Model Y debuts in India priced at a hefty $70,000 as the EV maker ‘tests the waters’

Published

6 hours ago

July 15, 2025

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Tesla’s Model Y debuts in India priced at a hefty ,000 as the EV maker 'tests the waters'

In this photo illustration, logo of Tesla is displayed on a mobile phone screen in front of the Indian flag in Ankara, Turkiye on November 28, 2023.

Cem Genco | Anadolu | Getty Images

Tesla has made its long-awaited debut in India, where it will sell its electric SUV, the Model Y, starting at $69,770, a significant markup from other major markets, its website showed Tuesday.

The sales launch comes the same day the American electric vehicle maker opened a showroom in Mumbai, its first in the country.

Isabel Fan, Southeast Asia Director at Tesla, also announced that the company would soon launch a showroom in the Indian capital of New Delhi, according to a report from CNBC-TV18.

The report added that Tesla would hire staff locally and set up experience centers, service centers, delivery systems, charging stations and logistics hubs throughout the country.

There has long been speculation about when Tesla would enter India, the third-largest automotive market in the world by sales. However, the high price tag may come as a surprise to many. For example, the Model Y starts from $44,990 in the U.S.

Why are prices so high?

Vaibhav Taneja, Tesla’s Chief Financial Officer, in April, confirmed the company’s interest in India but said it would take a careful approach to the market considering its 70% tariff on EV imports and about 30% luxury tax.

These high taxes explain why Tesla was forced to set its prices so high in India, despite the country’s preference for EVs at much lower price ranges.

Experts told CNBC that this will see Tesla in India compete in the premium segment of the market with the likes of BMW, rather than with local EV companies like Tata Motors.

“I won’t say that these prices are completely out of range because you will find buyers in India for all price points,” Vivek Vaidya, global client leader for mobility at research firm Frost & Sullivan, told CNBC’s “Inside India” on Tuesday.

“The question is whether they are going to threaten the mass market. The answer to that is no because the most popular selling cars probably sell at one-tenth of this price,” he added.

Tesla's entry into India will not threaten domestic mass market: Analyst

Testing the waters

While the Model Y will struggle to be price competitive, Tesla is likely more focused on “testing the waters” than generating sales in India, Puneet Gupta, Director for the Indian automotive market at S&P Global Mobility, told CNBC.

India first announced a new EV policy last year that promised to reduce duties for companies that commit to building up a local supply chain. While this could help Tesla push its prices down, the company has yet to commit to building any local manufacturing plants in India.

“The Mumbai showroom is a strategic ‘soft power’ move, not a full commitment,” Diwakar Murugan, automotives analyst at Canalys, told CNBC in a statement, adding that Tesla’s hesitation in India is pragmatic, as the market still lacks the demand to justify a large-scale manufacturing facility.

“Shifting a significant portion of its production to India would require a major re-evaluation of its global manufacturing strategy, something it’s not ready to do while its primary focus remains on scaling production in its established markets,” he said.

Murugan predicted that Tesla may only commit to full-scale Indian manufacturing between 2028 and 2030, with incentives like land subsidies and tax holidays, as well as the maturity of the local battery market expected to be important factors.

In the meantime, the Model Y will be a “niche, limited-volume product for wealthy, tech-savvy early adopters who seek a status symbol,” he added.

S&P’s Gupta noted that India’s tariffs on EV exports could also soon change as a result of ongoing trade negotiations between Washington and New Delhi, as well as further tweaks to its EV policy.

Tesla CEO Elon Musk spoke with India’s Prime Minister Narendra Modi on topics including collaboration on technology and innovation in April.

“The Indian government has been very proactive in terms of pushing green, cleaner, electric cars, and I think that Tesla has a clear advantage due to the India-U.S. relationship,” Gupta said.