UnitedHealth unit hack may hit pharmacies, providers’ credit profiles, Fitch says
10:58 am Monday, March 18th, 2024
(Reuters) -Ratings agency Fitch said on Monday some smaller healthcare providers and pharmacies that use its services could see a hit to their credit profiles following a recent cybersecurity incident at UnitedHealth Group’s technology unit.
A cyberattack on the unit, Change Healthcare, on Feb. 21 had a knock-on impact across the country’s healthcare system that depends heavily on insurance.
Change Healthcare processes about 50% of medical claims in the United States for around 900,000 physicians, 33,000 pharmacies, 5,500 hospitals and 600 laboratories.
Earlier this month, ratings agency Moody’s said that U.S. hospitals, physician facilities and other medical providers could see a credit impact from disruptions from the hack.
The U.S. government last week urged states to make interim payments to healthcare providers retroactively to the date when claims payment processing was disrupted.
The Centers for Medicare & Medicaid Services’ has said it plans to accelerate payments for government-backed insurance plans to some hospitals and has encouraged advance funding for those most affected.
Fitch said on Monday it was assessing the degree of impact on smaller pharmacies and healthcare providers’ cash flows, as well as the adequacy of the liquidity available to them.
Credit implications could be limited to smaller companies, or those rated ‘CCC’ or low-to-mid ‘B’ due to a lack of their financial flexibility, the agency said.
So far, Option Care Health has said that the hack could impact its near-term financial results, including an expected hit to its cash flow and working capital due to the inability to process a number of claims.
Fitch said that companies in the higher-rated categories, typically, have more financial flexibility to offset the impact of such disruptions.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Shinjini Ganguli)
