The Change Healthcare cyber hack is disrupting cash flow across the spectrum of healthcare including hospitals, outpatient facilities, physician practices, pharmacies, medical equipment providers, and more.
Assuming most providers take 30-45 days to process a claim and receive payment – many organizations have yet to feel the pain, and won’t for a few more weeks. With any time you have available, we recommend the following preparation:
Assess Your Risk
First and foremost, it is critical to understand your risk. Nearly half of U.S. healthcare relies on Change’s 3rd party payment systems. Engage with your revenue cycle team to understand your exposure.
Protect Your Cash Position
For those who are or will be impacted the most important next step is to conserve cash until the disruptions are resolved. Strategies include:
Access Capital
If you do not have a line of credit (LOC) with your bank/lender you should seek to do so immediately. The government will provide some emergency funds and will pressure payers to do the same to help providers manage through the financial impact, but these processes often take time and only cover a fraction of the expected payments. Consider the LOC a security blanket that can be used on your timeline. We also recommend that you make sure you have access to advisors who understand complex federal programs and how to navigate them correctly and efficiently.
For all organizations, including those lucky enough to escape the impact of the Change Healthcare cyberattack, this is yet another reminder to make sure you are prepared for a financial crisis.
Many facilities are still recovering financially from COVID and are struggling with staffing issues keeping them from operating at full capacity and full revenue,” says Matt Lau, Senior Vice President of Client Accounting & Financial Services at MedHQ. “A cash crunch on top of these challenges is devastating so we recommend putting a plan and structure in place that will protect the ongoing financial health of your business.”
Financial Crisis Plan
1. Enough cash on hand to cover center operating expenses for 30 days at a minimum
2. A line of credit established with your bank that is large enough to cover operating expenses for at least an additional 30 days
3. A plan to conserve cash in emergencies that is reviewed by all owners and approved by the board
4. Access to a financial expert who understands healthcare businesses, revenue cycle, and government programs
5. In this era of digital security concerns, a plan to execute revenue cycle manually if key systems go off-line
