UnitedHealth Under Fire As Senators Question Debt Collection Tactics After Massive Cyberattack

Two Democratic senators are demanding information from UnitedHealth Group UNH about the emergency relief loans it provided to healthcare providers after a cyberattack last year and how it is collecting those debts.

The cyberattack compromised the personal data of 190 million Americans and affected around 900,000 doctors, 33,000 pharmacies, 5,500 hospitals, and 600 labs.

Senator Elizabeth Warren and Ron Wyden sent a letter on Wednesday to UnitedHealth CEO Stephen Hemsley and Optum Financial CEO Dhivya Suryadevara, expressing concern about the company’s payment demands to healthcare providers who took the loans.

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The aftermath burdened healthcare providers.

As per the WSJ report in April, UnitedHealth demanded swift repayment of $8.9 billion in emergency loans it issued to medical providers following a massive cyberattack on its subsidiary, Change Healthcare.

Despite earlier assurances that repayments would be flexible, some healthcare providers now say the company is aggressively pursuing repayments, even as they continue to struggle financially from the fallout.

“After flunking cybersecurity 101, it’s unacceptable for UnitedHealth Group to use hardball tactics to recoup loans to doctors left in a financial bedlam through no fault of their own,” Wyden told the Wall Street Journal.

Warren described the reports of tight repayment demands as “deeply troubling” and urged UnitedHealth to provide flexible repayment schedules.

The spokesperson for Change told WSJ that the company is open to “reasonable repayment arrangements.”

In their letter, the senators requested that the insurance giant provide information on a range of topics related to the loans, including the criteria used to issue loans, the repayment options Optum offers to struggling providers, and its notice procedures.

“Now, more than 15 months after systems restoration and 14 months after the federal government ended its own assistance program, we have worked collaboratively with thousands of providers across the country to help them satisfy the repayment responsibilities they agreed to when accepting funds,” a spokesperson for Change Healthcare told the WSJ.

In June, the Centers for Medicare and Medicaid Services (CMS) closed the advance payments program, which had started to help some Medicare providers and suppliers affected by disruptions at the Change Healthcare technology unit.

Earlier this week, a Bloomberg report suggested that a U.S. Department of Justice criminal probe into the company was broader than previously known.

The investigation is now scrutinizing business practices at the company’s pharmacy benefit manager, Optum Rx, as well as payments to its physicians.

This newly revealed scope is in addition to an ongoing criminal investigation by the department’s fraud unit into UnitedHealth’s Medicare Advantage billing practices.

Price Action: UNH stock is trading lower by 0.30% to $301.37 premarket at last check Friday.

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