UnitedHealth CEO Andrew Witty testifies before the Senate Finance Committee on Capitol Hill in Washington, May 1, 2024.
Kent Nishimura | Getty Images
Following the massive cyberattack on UnitedHealth Group’s Change Healthcare unit last year, the company launched a temporary funding assistance program to help medical practices with their short-term cash flow needs, offering no-interest loans with no added fees.
A little over a year later, UnitedHealth is aggressively going after borrowers, demanding they “immediately repay” their outstanding balances, according to documents viewed by CNBC and providers who received funding. Some groups have been asked to repay hundreds of thousands of dollars in a matter of days.
Optum, UnitedHealth’s financial, pharmacy and care services arm, is telling borrowers that it reserves the right to “begin offsetting claims payable” to the practices, meaning the company will withhold separate funds until it recoups the loan.
It’s a significant change in posture for the company, which suffered a cyberattack in February 2024 that compromised data from around 190 million Americans, the largest reported health-care breach in U.S. history. The ensuing disruption caused severe fallout across the health-care system, leaving many providers temporarily unable to get paid for their services. Some dipped into their personal savings to keep their practices afloat.
During a Senate hearing about the attack in May, UnitedHealth CEO Andrew Witty said providers would only be required to repay the loans when “they, not me, but they confirm that their cash flow is normalized.”
Several doctors who took advantage of the financing told CNBC that they can’t meet the company’s new demands. Dr. Christine Meyer, an internist who started a practice in Exton, Pennsylvania, received a letter from Optum earlier this month telling her to immediately submit her organization’s payment.
“We are not in any position to start repaying this loan,” Meyer, who started her practice about 20 years ago, told CNBC. She has been a vocal critic of UnitedHealth following the breach.
“I’m just looking at all my legal options at this point,” Meyer said. “But repaying them $750,000 in five days is obviously not going to happen.”
UnitedHealth didn’t comment on specific cases, but a spokesperson for Change Healthcare confirmed that the company has started recouping the loans.
“Now, more than one year post the event and with services restored, we have begun the process of recouping the interest-free funding we provided to providers,” the spokesperson said in a statement.
The company said the U.S. Department of Health and Human Services took the same approach last year “under its own cyber-attack lending program.” HHS launched a separate funding assistance program through the Centers for Medicare & Medicaid Services last March. CMS said it would automatically recoup payments from Medicare claims, and providers could accrue interest, according to a release.
“We continue to work with providers on repayment and other options, and continue to reach out to those providers that have not been responsive to previous calls or email requests for more information,” the Change Healthcare spokesperson said.
Providers were told that UnitedHealth reserved the right to withhold future payments when they signed up for the funding assistance program, the company added. CNBC independently reviewed a copy of a loan agreement for the program and confirmed this statement.
Change Healthcare, which offers payment and revenue cycle management tools, was acquired by Optum in 2022.
After discovering the breach last year, UnitedHealth said it isolated and disconnected the impacted systems. The company paid out more than $9 billion to providers in 2024, and more than $4.5 billion has already been repaid, according to the company’s fourth-quarter earnings report in January. UnitedHealth said providers would receive an invoice once standard payment operations resumed, and that they would be subject to a repayment period of 45 business days.
“Change Healthcare will notify the recipient that the funding amount is due after claims processing or payment processing services have resumed and payments impacted during the service disruption period are processed,” the website says.
Dwindling deposits, lost revenue
While the vast majority of Change Healthcare’s services have been restored over the course of the last year, three products are still listed as “partial service available,” according to UnitedHealth’s cyberattack response website.
And doctors are still reeling.
Meyer said that when the breach took place, she watched her practice’s daily deposits shrivel from the range of $60,000 to $80,000 to about $150 “overnight.” She applied for Optum’s temporary funding assistance program, and after some difficulty and back and forth with the company, she ultimately received a total of $756,900 in financial assistance.
Former Senator Bob Casey Jr., D-Pa., shared Meyer’s story during the congressional hearing in May. He asked Witty about the company’s approach to the repayment process.
“I’d like to absolutely confirm to you and Dr. Meyer that we have no intention of asking for loan repayment until after she determines that her business is back to normal,” Witty told lawmakers. “Even then, we would not look for repayment until 45 business days – 60 calendar days – after that and there would be no interest and no fee associated with that loan.”
“So it would be a determination she makes?” Casey asked.
“That’s absolutely right,” Witty said.
Meyer said that’s not what happened.
UnitedHealth Group Inc. headquarters stands in Minnetonka, Minnesota, U.S.
Mike Bradley | Bloomberg | Getty Images
She received a notice from Optum on Jan. 24, which was viewed by CNBC, that requested repayment since “the service disruption has ended for most clients.” Meyer said she called and told the company she was “not in any position to pay.”
Meyer claims that her practice lost more than $1 million in revenue due to the Change Healthcare cyberattack. She told CNBC the figure was based on a forensic financial analysis her practice carried out by comparing its charges against payments over recent years. The $1.2 million figure accounts for losses across all its insurers, not just UnitedHealthcare, Meyer said.
On April 1, Meyer received another notice requesting immediate repayment within five business days. The letter was addressed to Meyer. But the name of the practice on the letter, Insight Counseling, as well as the total amount due, $925,200, were incorrect.
Meyer said she called Optum again and was told the company made a mistake, but that she had five days to repay her actual total of $750,000. At that point, the company would start withholding her UnitedHealthcare payments, which she described as a “shakedown.”
Meyer said her practice typically receives annual claims payments of about $150,000 to $200,000 from UnitedHealthcare.
“I guess I’ll just let them take those payments back for the next three years until they get their money back,” she told CNBC.
In a post on LinkedIn on Thursday, Meyer wrote that she and her team “made a plan to leave the least amount of money in the account set up to receive payments from UnitedHealthcare. If it isn’t there, they can’t get it.”
‘Very frustrating experience’
Dr. Purvi Parikh, an allergist and immunologist with a private practice in New York, shared a similar story.
Parikh’s practice received about $440,000 in funding assistance after the breach. She said she started getting repayment notices late last year, and that Optum was threatening to offset claims payable to the practice.
“We were already hit very hard by the Change Healthcare hack,” Parikh said in an interview. “Now on top of that, they’re asking for all of this money back or they’re going to hold future payments ransom. It’s just been a very frustrating experience dealing with Optum.”
Parikh’s practice requested a one-month extension on its final payment of $101,650 in January to try and keep UnitedHealth from withholding other payments. In the email request, Parikh’s colleague wrote that “it has been quite difficult to recover financially.”
Optum granted Parikh’s practice the extension.
“People don’t just have that amount of money just sitting around,” Parikh said. “We’ve paid everything back, but it wasn’t without hardship.”
A physician who runs a pediatric practice in New Jersey said UnitedHealth has already started withholding payments from the organization. The practice received more than $500,000 in funding assistance following the Change Healthcare breach.
The doctor, who asked not to be named due to the sensitive nature of the situation, said the practice began receiving phone calls and emails from Optum requesting repayment beginning late last year. The group indicated that it didn’t have the money, but would set up a payment plan and had begun the process.
But the doctor said its billing department noticed that UnitedHealth had already started holding back claims payments. In its explanation of benefits, which details what an insurer will cover, the doctor said the company has a line that reads, “UnitedHealthcare is withholding payment for Optum.”
WATCH: Health and Human Services Department opens probe into hack at UnitedHealth’s Change Healthcare
An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.
Victor J. Blue/Bloomberg via Getty Images
Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.
In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.
“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.
Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.
By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.
Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.
Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.
Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”
“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”
Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.
Etsy shares are down 17% this year, slightly more than the Nasdaq.
WATCH: Amazon CEO Andy Jassy says sellers will pass cost of tariffs on to consumers
Google CEO Sundar Pichai testifies before the House Judiciary Committee at the Rayburn House Office Building on December 11, 2018 in Washington, DC.
Alex Wong | Getty Images
Google’s antitrust woes are continuing to mount, just as the company tries to brace for a future dominated by artificial intelligence.
On Thursday, a federal judge ruled that Google held illegal monopolies in online advertising markets due to its position between ad buyers and sellers.
The ruling, which followed a September trial in Alexandria, Virginia, represents a second major antitrust blow for Google in under a year. In August, a judge determined the company has held a monopoly in its core market of internet search, the most-significant antitrust ruling in the tech industry since the case against Microsoft more than 20 years ago.
Google is in a particularly precarious spot as it tries to simultaneously defend its primary business in court while fending off an onslaught of new competition due to the emergence of generative AI, most notably OpenAI’s ChatGPT, which offers users alternative ways to search for information. Revenue growth has cooled in recent years, and Google also now faces the added potential of a slowdown in ad spending due to economic concerns from President Donald Trump’s sweeping new tariffs.
Parent company Alphabet reports first-quarter results next week. Alphabet’s stock price dipped more than 1% on Thursday and is now down 20% this year.
In Thursday’s ruling, U.S. District Judge Leonie Brinkema said Google’s anticompetitive practices “substantially harmed” publishers and users on the web. The trial featured 39 live witnesses, depositions from an additional 20 witnesses and hundreds of exhibits.
Judge Brinkema ruled that Google unlawfully controls two of the three parts of the advertising technology market: the publisher ad server market and ad exchange market. Brinkema dismissed the third part of the case, determining that tools used for general display advertising can’t clearly be defined as Google’s own market. In particular, the judge cited the purchases of DoubleClick and Admeld and said the government failed to show those “acquisitions were anticompetitive.”
“We won half of this case and we will appeal the other half,” Lee-Anne Mulholland, Google’s vice president or regulatory affairs, said in an emailed statement. “We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
Attorney General Pam Bondi said in a press release from the DOJ that the ruling represents a “landmark victory in the ongoing fight to stop Google from monopolizing the digital public square.”
Potential ad disruption
If regulators force the company to divest parts of the ad-tech business, as the Justice Department has requested, it could open up opportunities for smaller players and other competitors to fill the void and snap up valuable market share. Amazon has been growing its ad business in recent years.
Meanwhile, Google is still defending itself against claims that its search has acted as a monopoly by creating strong barriers to entry and a feedback loop that sustained its dominance. Google said in August, immediately after the search case ruling, that it would appeal, meaning the matter can play out in court for years even after the remedies are determined.
The remedies trial, which will lay out the consequences, begins next week. The Justice Department is aiming for a break up of Google’s Chrome browser and eliminating exclusive agreements, like its deal with Apple for search on iPhones. The judge is expected to make the ruling by August.
Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) listen as U.S. President Joe Biden speaks during a roundtable with American and Indian business leaders in the East Room of the White House on June 23, 2023 in Washington, DC.
Anna Moneymaker | Getty Images
After the ad market ruling on Thursday, Gartner’s Andrew Frank said Google’s “conflicts of interest” are apparent by how the market runs.
“The structure has been decades in the making,” Frank said, adding that “untangling that would be a significant challenge, particularly since lawyers don’t tend to be system architects.”
However, the uncertainty that comes with a potentially years-long appeals process means many publishers and advertisers will be waiting to see how things shake out before making any big decisions given how much they rely on Google’s technology.
“Google will have incentives to encourage more competition possibly by loosening certain restrictions on certain media it controls, YouTube being one of them,” Frank said. “Those kind of incentives may create opportunities for other publishers or ad tech players.”
A date for the remedies trial hasn’t been set.
Damian Rollison, senior director of market insights for marketing platform Soci, said the revenue hit from the ad market case could be more dramatic than the impact from the search case.
“The company stands to lose a lot more in material terms if its ad business, long its main source of revenue, is broken up,” Rollison said in an email. “Whereas divisions like Chrome are more strategically important.”
WATCH: U.S. judge finds Google holds illegal online ad-tech monopolies
Jason Citron, CEO of Discord in Washington, DC, on January 31, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images
The New Jersey attorney general sued Discord on Thursday, alleging that the company misled consumers about child safety features on the gaming-centric social messaging app.
The lawsuit, filed in the New Jersey Superior Court by Attorney General Matthew Platkin and the state’s division of consumer affairs, alleges that Discord violated the state’s consumer fraud laws.
Discord did so, the complaint said, by allegedly “misleading children and parents from New Jersey” about safety features, “obscuring” the risks children face on the platform and failing to enforce its minimum age requirement.
“Discord’s strategy of employing difficult to navigate and ambiguous safety settings to lull parents and children into a false sense of safety, when Discord knew well that children on the Application were being targeted and exploited, are unconscionable and/or abusive commercial acts or practices,” lawyers wrote in the legal filing.
They alleged that Discord’s acts and practices were “offensive to public policy.”
A Discord spokesperson said in a statement that the company disputes the allegations and that it is “proud of our continuous efforts and investments in features and tools that help make Discord safer.”
“Given our engagement with the Attorney General’s office, we are surprised by the announcement that New Jersey has filed an action against Discord today,” the spokesperson said.
One of the lawsuit’s allegations centers around Discord’s age-verification process, which the plaintiffs believe is flawed, writing that children under thirteen can easily lie about their age to bypass the app’s minimum age requirement.
The lawsuit also alleges that Discord misled parents to believe that its so-called Safe Direct Messaging feature “was designed to automatically scan and delete all private messages containing explicit media content.” The lawyers claim that Discord misrepresented the efficacy of that safety tool.
“By default, direct messages between ‘friends’ were not scanned at all,” the complaint stated. “But even when Safe Direct Messaging filters were enabled, children were still exposed to child sexual abuse material, videos depicting violence or terror, and other harmful content.”
The New Jersey attorney general is seeking unspecified civil penalties against Discord, according to the complaint.
The filing marks the latest lawsuit brought by various state attorneys general around the country against social media companies.
In 2023, a bipartisan coalition of over 40 state attorneys general sued Meta over allegations that the company knowingly implemented addictive features across apps like Facebook and Instagram that harm the mental well being of children and young adults.
The New Mexico attorney general sued Snap in Sep. 2024 over allegations that Snapchat’s design features have made it easy for predators to easily target children through sextortion schemes.
The following month, a bipartisan group of over a dozen state attorneys general filed lawsuits against TikTok over allegations that the app misleads consumers that its safe for children. In one particular lawsuit filed by the District of Columbia’s attorney general, lawyers allege that the ByteDance-owned app maintains a virtual currency that “substantially harms children” and a livestreaming feature that “exploits them financially.”
In January 2024, executives from Meta, TikTok, Snap, Discord and X were grilled by lawmakers during a senate hearing over allegations that the companies failed to protect children on their respective social media platforms.
WATCH: The FTC has an uphill battle in its antitrust case against Meta.
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