Change Healthcare

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Change Healthcare Inc.
Company typeSubsidiary
Nasdaq: CHNG
IndustryHealthcare
Founded2005; 19 years ago (2005)
HeadquartersNashville, Tennessee, U.S.
Key people
Neil E. de Crescenzo
(President and CEO)
RevenueIncrease US$3.48 billion (2022)
Increase US$137 million (2022)
Increase US$−57 million (2022)
Total assetsDecrease US$9.93 billion (2022)
Total equityIncrease US$3.28 billion (2022)
Number of employees
c. 14,000 (2022)
ParentUnitedHealth Group
Websitechangehealthcare.com
Footnotes / references
Financials as of March 31, 2022[1]

Change Healthcare (known as Emdeon before rebranding in 2015, which followed the acquisition of Change Healthcare) is a provider of revenue and payment cycle management that connects payers, providers, and patients within the U.S. healthcare system. The name also refers to a company founded in 2007 which subsequently became part of the current conglomerate. The company operates the largest financial and administrative information exchange in the United States.[2]

The company is headquartered in Nashville, Tennessee, with more than 89 additional locations throughout the United States, Canada, New Zealand, Israel, Taiwan, the UK, and the Philippines.[3]

History[edit]

Change Healthcare (2007)[edit]

A company called Change Healthcare was established in 2007 and based in Brentwood, Tennessee. The company provided healthcare consumer engagement[clarification needed] and health plan cost transparency tools to health plans and large, self-insured employers,[4] across the United States. The company was founded by Christopher Parks and Robert Hendrick[5] in 2007 with a consumer solution called MedBillManager. In January 2010, the company shifted its focus to the business-to-business market and launched the Change Healthcare Engagement Platform.

In April 2011, Howard McLure,[6] former president of CVS Caremark, came out of retirement to lead Change Healthcare as chairman and CEO. Doug Ghertner[7] joined the company as president in July 2011; prior to this, he oversaw product innovation and management at CVS Caremark and was a senior vice president.

In December 2011, Change Healthcare closed a round of financing, led by Sandbox Industries, BlueCross BlueShield Venture Partners and West Health Investment Fund. In September 2012, Ghertner was promoted to president and CEO, and McLure assumed the role of executive chairman.

In July 2013, Change Healthcare closed on a round of Series D funding. It was led by HLM Venture Partners, and including new investor Noro-Moseley Partners, infused $15 million into the company.[8] In July 2013, Change Healthcare was also named one of Modern Healthcare’s “100 Best Places to Work in Healthcare."[9]

Emdeon[edit]

In 2004, WebMD Corporation acquired Dakota Imaging, Inc. and ViPS, Inc.[10]

Until August 2005, Emdeon operated under the name WebMD Corporation (NASDAQ: HLTH). The name was changed to Emdeon to avoid confusion with its then subsidiary WebMD, which started public trading under stock symbol WBMD in September 2005.[11][12]

In May 2009, the company acquired The Sentinel Group, a vendor of software and investigational services to combat health care fraud.[13] In January 2010, the company acquired FutureVision Investment Group, L.L.C. (FVTech), a provider of outsourced services specializing in electronic data conversion and information management solutions.[14] In March 2010, the company acquired Healthcare Technology Management Services, Inc. (HTMS), a management consulting company focused primarily on the healthcare payer market.[15] In June 2010, the company acquired Chapin Revenue Cycle Management, LLC (Chapin), a technology-enabled provider of accounts receivable denial and recovery services.[16] In August 2010, the company acquired Interactive Payer Network (IPN), a leading technology service provider that acts as an outsourcing partner for HIPAA-compliant healthcare electronic data interchange (EDI).[17] In October 2010, the company acquired Chamberlin Edmonds & Associates, Inc. (CEA), a technology-enabled provider of government program eligibility and enrollment services.[18] In May 2011, the company acquired EquiClaim, a provider of healthcare audit and recovery services for commercial and government payers, from MultiPlan, Inc.[19]

In August 2011, Emdeon Inc. was taken private for $3 Billion by Blackstone Group.[20] Blackstone's offer of $19 per Emdeon share was backed by committed financing from Bank of America Merrill Lynch, Barclays Capital and Citigroup.[21] Emdeon shares jumped 13.6% the morning after the acquisition. Shares had risen 31% over the previous year until the announcement.[22]

In May 2012, the company acquired TC3 Health, a cost containment provider, including payment integrity and out-of-network claims cost management, to U.S. healthcare payers.[23] In June 2013, the company acquired Goold Health Systems, a healthcare management organization that specializes in providing pharmacy benefit and related services primarily to State Medicaid agencies across the nation.[24] In July 2014, the company acquired Capario, a provider of healthcare technology solutions[buzzword] using a cloud-based platform that enables healthcare providers to use a real-time solution[buzzword] called CaparioOneSM.[25]

In November 2014, Change Healthcare was acquired by Emdeon for $135 million.[26] In November 2015 Emdeon officially rebranded to take the Change Healthcare name.

In December 2014, the company acquired AdminiSource Communications, Inc., a payment and communications solutions[buzzword] (PCS) business of Alegeus Technologies, LLC, a provider of consumer directed healthcare services.[27] In August 2015, the company acquired Altegra Health, a provider of technology and intervention platforms that combine data aggregation and analytics with member engagement and reporting capabilities.[28][29]

In June 2016, McKesson Corporation and Change Healthcare Holdings, Inc., announced the creation of a new healthcare company which combined substantially all of Change Healthcare's business with the majority of McKesson's Information technology unit. McKesson owns approximately 70% of the new company, with the remaining equity stake held by Change Healthcare stockholders. The new company continues to be called Change Healthcare.[30]

In October 2018, it was reported that Change Healthcare Corporation hired underwriters and investment banks for a 2018/2019 time-frame initial public offering.[31] On June 27, 2019, Change Healthcare Inc, with stock symbol CHNG, started trading on the NASDAQ stock exchange and offered as many as 49.2 million shares of its stock, at a price of $13 per share raising more than $640 million in its IPO.[32]

In December 2018, Change Healthcare acquired the intellectual property and other key assets, including employees, of Charleston-based health care IT startup PokitDok.[33]

In January 2021, UnitedHealth Group's OptumInsight unit agreed to acquire Change Healthcare in a deal valued at $13 billion, including assuming $5 billion of latter's debt.[34] Following delays due to regulator scrutiny,[35] the acquisition closed on October 3, 2022.[36]

2024 Cyberattack[edit]

On February 21, 2024, the company was hit by a cyberattack which prevented payouts to doctors on the platform.[37][38] As a result of the attack, electronic payments and medical claims could not be processed by UnitedHealth Group, leading to widespread disruption.[38][39] Of note, patients were forced to pay for many of their medications out of pocket instead of using medication coupons or copays.[39] Many healthcare providers claimed to lose significant revenue as a result of the disruption everyday, up to $100 million per day,[40] threatening many to become insolvent.[41] As a result of the cyberattack, HHS opened a civil rights investigation with regards to patient privacy concerns.[42][43]

On February 22, 2024, UnitedHealth Group filed a notice to the Securities and Exchange Commission stating that a "suspected nation-state associated cybersecurity threat actor" gained access to Change Healthcare's information technology system. Following UnitedHealth Group's initial filing, CVS Health, Walgreens, Publix, GoodRX, and BlueCross BlueShield of Montana reported disruptions in insurance claims.[44] The cyberattack affected family-owned pharmacies and military pharmacies, including Naval Hospital Camp Pendleton.[45] Healthcare company athenahealth was affected, according to Forbes.[46]

On February 29, 2024, UnitedHealth Group confirmed that the ransomware attack was "perpetrated by a cybercrime threat actor who...represented itself to [the company] as ALPHV/Blackcat." In the same update, the company stated that it was "working closely with law enforcement and leading third-party consultants, Mandiant and Palo Alto Networks" to address the matter.[47]

On March 4, 2024, Reuters reported that a bitcoin payment equivalent to nearly $22 million USD was made to a cryptocurrency wallet "associated with ALPHV." UnitedHealth has not commented on the payment, instead stating that the organization was "focused on the investigation and the recovery."[48] On the same day, a Wired reported stated that the transaction looked "very much like a large ransom payment."[49]

As of March 18, 2024, UnitedHealth Group had advanced payments of over $2 billion in assistance to health care providers affected by the cybersecurity attack. In addition, some services had been restored including Change Healthcare’s payment processing platform and pharmacy network.[50]

Response[edit]

On March 1, 2024, UnitedHealth Group's Optum division launched a Temporary Funding Assistance Program to help bridge the gap in short-term cash flow needs for providers who received payments from payers that were processed by Change Healthcare.[51][52] The American Hospital Association (AHA) stated that the program was "not even a band-aid" on the payment problems identified by the company, citing its "onerous" terms and conditions including Optum's ability to recoup funds "immediately and without prior notification," and to "change the agreement simply by providing notice."[53]

On March 5, 2024, the U.S. Department of Health and Human Services announced flexibilities for hospitals impacted by the attack.[54] The American Hospital Association (AHA) was critical of these measures, stating that the proposed flexibilities were "not an adequate whole of government response."[55]

On March 12, 2024, UnitedHealth CEO Andrew Witty was summoned to a meeting by the Biden administration, during which HHS Secretary Xavier Becerra and White House domestic policy chief Neera Tanden urged Witty and other members of UHG leadership to increase the amount of funding available to providers who have been impacted by the protracted outage. Healthcare providers from across the sector were also in attendance and voiced their concerns about the ongoing financial and operational impacts of the Change cyberattack. [56][57]

References[edit]

  1. ^ "Change Healthcare Inc. Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. 2022-05-26.
  2. ^ "Emdeon Corporate Profile and Information". Archived from the original on 28 November 2011. Retrieved 20 November 2011.
  3. ^ "What is Change Healthcare? | Definition from TechTarget". Health IT and EHR. Retrieved 2024-04-12.
  4. ^ McGee, Jamie (April 14, 2014). "Change Healthcare Offers Tools for Making Wiser Choices". The Tennessean. Archived from the original on July 14, 2022. Retrieved July 27, 2014.
  5. ^ Bryant, Linda (November 10, 2013). "Guardian of the Culture". Nashville Post. Archived from the original on March 27, 2014. Retrieved July 27, 2014.
  6. ^ "Former CVS/Caremark Leader to Be CEO of Brentwood Firm". Nashville Post. May 3, 2011.
  7. ^ "Executive Profile: Douglas Ghertner". Nashville Business Journal. June 1, 2012.
  8. ^ "Change Healthcare Announces $15 Million in Funding for Personalized Healthcare Information Business". Philanthropy News Digest. August 19, 2013.
  9. ^ "Modern Healthcare's 2013 Best Places to Work in Healthcare". Modern Healthcare. No. August 14, 2013.
  10. ^ Lee, In (2009). Emergent Strategies for E-business Processes, Services, and Implications: Advancing Corporate Frameworks. IGI Global Snippet. ISBN 9781605661551.
  11. ^ Pasiuk, Laurie, ed. (2006). Vault Guide to the Top Internet Industry Employers. Vault Inc. p. 237. ISBN 9781581313840.
  12. ^ "WEBMD Corporation to Be Renamed EMDEON Corporation". Archived from the original on 2012-06-07. Healthcare Information and Management Systems, August 4, 2005.
  13. ^ "Health IT Business News Roundup for the Week of May 8, 2009". Archived from the original on 2022-12-06. IHealthBeat, May 8, 2009.
  14. ^ "Emdeon buys FutureVision, expects electronic billing boost". January 26, 2010. Archived from the original on July 14, 2022. Retrieved April 19, 2018. Nashville Business Journal, January 26, 2010.
  15. ^ "Emdeon health care payment co to buy consultancy". Archived from the original on 2015-02-13. Bloomberg Businessweek, March 16, 2010.
  16. ^ "Emdeon acquires Chapin, better addressing hospital-based claims and payment recovery". 24 June 2010. Archived from the original on 14 July 2022. Retrieved 19 April 2018. HealthcareITNews, June 24, 2010
  17. ^ "Emdeon acquires IPN". Archived from the original on 2020-08-09. Retrieved 2020-12-12.Scott-Macon’s Healthcare Industry Group, August 31, 2010
  18. ^ "Emdeon acquires Chamberlin Edmonds". 4 October 2010. Archived from the original on 25 October 2017. Retrieved 19 April 2018. News Medical, October 4, 2010
  19. ^ "Emdeon Acquires EquiClaim to Expand Its Suite of Payment Integrity Solutions". Bloomberg. Archived from the original on 2015-09-24. Retrieved 2018-04-19. Bloomberg, May 3, 2011.
  20. ^ Nussbaum, Alex; Kelly, Jason (August 4, 2011). "Blackstone Group Agrees to Acquire Medical-Biller Emdeon for $3 Billion". Bloomberg. Archived from the original on 2015-01-11. Retrieved 2018-04-19. Bloomberg, August 4, 2011
  21. ^ "Blackstone to take Emdeon private for $3 billion". Reuters. August 4, 2011. Archived from the original on September 11, 2012. Retrieved April 19, 2018. Reuters, August 4, 2011
  22. ^ "Blackstone to buy Emdeon for $3 Billion". The New York Times. August 4, 2011. Archived from the original on April 20, 2018. Retrieved April 19, 2018. DealBook, August 4, 2011.
  23. ^ "TC3 Health acquired by Emdeon". 4 October 2010. Archived from the original on 14 July 2022. Retrieved 19 April 2018. Modern Healthcare, May 7, 2012.
  24. ^ "Emdeon Acquires Goold Health Systems". Archived from the original on 2013-10-11.
  25. ^ "Emdeon to Acquire Capario to Enhance Its Revenue Management Platform". www.prnewswire.com (Press release). Archived from the original on 2016-01-28. Retrieved 2015-11-08.
  26. ^ Holly Fletcher (December 15, 2014). "Emdeon buys payment platform from Alegeus". Tennessean. Archived from the original on 2022-07-14. Retrieved 2017-10-24.
  27. ^ "Emdeon buys payment platform from Alegeus". The Tennessean. Archived from the original on 2022-07-14. Retrieved 2015-11-08.
  28. ^ "Emdeon to Acquire Altegra Health for $910M". The Wall Street Journal. 2015-07-06.
  29. ^ "Emdeon to Acquire Altegra Health". www.prnewswire.com (Press release). Archived from the original on 2015-10-27. Retrieved 2015-11-08.
  30. ^ De Lombaerde, Geert (June 28, 2016). "Change, McKesson division joining forces". Nashville Post. Archived from the original on March 1, 2018. Retrieved April 19, 2018.
  31. ^ O'Donnell, Carl (3 October 2018). "McKesson's Change Healthcare hires IPO underwriters: sources". Reuters. Archived from the original on 2 June 2019. Retrieved 2 June 2019 – via www.reuters.com.
  32. ^ "Change Healthcare's shares debut below target". American City Business Journals. 2019-06-27. Archived from the original on 2020-10-01.
  33. ^ "Change Healthcare buys PokitDok assets". Nashville Post. 19 December 2018. Archived from the original on 2018-12-19. Retrieved 2018-12-19.
  34. ^ Tozzi, John (2021-01-06). "UnitedHealth to Purchase Change Healthcare for $8 Billion". Bloomberg News. Archived from the original on 2021-01-07.
  35. ^ Pringle, Sarah (2022-09-19). "UnitedHealth beats Justice Dept on $13 billion merger". Axios.
  36. ^ "UnitedHealth closes roughly $8B deal for Change Healthcare". Associated Press. 2022-10-03.
  37. ^ "Pharmacies across US disrupted following hack at Change Healthcare network". Retrieved 2024-04-05.
  38. ^ a b Tahir, Darius; Wolfson, Bernard J.; Chang, Daniel (9 March 2024). "Health industry struggles to recover from cyberattack on a unit of UnitedHealth". NPR.
  39. ^ a b "Patients struggle to get lifesaving medication after cyberattack on a major health care company". NBC News. 2024-03-06. Retrieved 2024-03-17.
  40. ^ "Health care providers may be losing up to $100 million a day from cyberattack. A doctor shares the latest - CBS News". www.cbsnews.com. 2024-03-12. Retrieved 2024-03-17.
  41. ^ Tozzi, John; Swetlitz, Ike; Griffin, Riley (13 March 2024). "Cancer Clinics Face Cash Crunch After Hack Rocks US Health Care". Bloomberg.
  42. ^ Affairs (ASPA), Assistant Secretary for Public (2024-03-13). "HHS Office for Civil Rights Issues Letter and Opens Investigation of Change Healthcare Cyberattack". www.hhs.gov. Retrieved 2024-03-17.
  43. ^ "HHS opens investigation into Change Healthcare cyberattack". Yahoo Finance. 2024-03-14. Retrieved 2024-03-17.
  44. ^ Satter, Raphael; Roy, Sriparna (February 22, 2024). "Pharmacies across US disrupted following hack at Change Healthcare network". Reuters. Retrieved March 5, 2024.
  45. ^ Czachor, Emily (February 22, 2024). "Cybersecurity breach at UnitedHealth subsidiary causes Rx delays for some pharmacies". CBS News. Retrieved March 5, 2024.
  46. ^ Lyons, Jessica (February 22, 2024). "Cyberattack downs pharmacies across America". The Register. Retrieved March 5, 2024.
  47. ^ "Optum Solutions Status". status.changehealthcare.com. Retrieved 2024-03-08.
  48. ^ Satter, Raphael (5 March 2024). "Hacker forum post claims UnitedHealth paid $22 mln ransom in bid to recover data". Reuters.
  49. ^ Greenberg, Andy (4 March 2024). "Hackers Behind the Change Healthcare Ransomware Attack Just Received a $22 Million Payment". Wired.
  50. ^ "UnitedHealth says advanced over $2 bln in payments to providers". Reuters. March 19, 2024.
  51. ^ "UnitedHealth Group Update on Change Healthcare Cyberattack". www.unitedhealthgroup.com. Retrieved 2024-03-08.
  52. ^ "Temporary Funding Assistance". www.optum.com. Retrieved 2024-03-08.
  53. ^ "AHA Expresses Concerns with UHG Program in Response to Cyberattack on Change Healthcare | AHA". www.aha.org. 2024-03-06. Retrieved 2024-03-08.
  54. ^ Affairs (ASPA), Assistant Secretary for Public (2024-03-05). "HHS Statement Regarding the Cyberattack on Change Healthcare". www.hhs.gov. Retrieved 2024-03-08.
  55. ^ "HHS Announces Some Flexibilities for Hospitals Following Cyberattack on Change Healthcare | AHA". www.aha.org. 2024-03-06. Retrieved 2024-03-08.
  56. ^ Diamond, Dan (2024-03-12). "White House summons UnitedHealth CEO as payment paralysis enters 3rd week". Washington Post. ISSN 0190-8286. Retrieved 2024-03-12.
  57. ^ Lyngaas, Sean (2024-03-12). "Biden officials press health care giant to get emergency funding flowing to providers following cyberattack | CNN Business". CNN. Retrieved 2024-03-12.

External links[edit]

    • Historical business data for Change Healthcare Inc.:
    • SEC filings
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