Saturday, July 13, 2024

Medicare to End CHOPD Payments on July, Following Cyberattack Recovery

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Medicare payments under the Accelerated and Advance Payment (AAP) Program for the Change Healthcare/Optum Payment Disruption (CHOPD) will conclude on July 12, 2024, as announced by the Centers for Medicare & Medicaid Services (CMS). Launched in early March, the CHOPD payments were designed to ease cash flow disruptions experienced by some Medicare providers and suppliers, including hospitals, physicians, and pharmacists, due to the unprecedented cyberattack that took healthcare electronic data interchange Change Healthcare offline in February.

“In the face of one of the most widespread cyberattacks on the U.S. healthcare industry, CMS promptly took action to get providers and suppliers access to the funds they needed to continue providing patients with vital care,” said CMS Administrator Chiquita Brooks-LaSure. “Our efforts helped minimize the disruptive fallout from this incident, and we will remain vigilant to be ready to address future events.” Since its inception, the CHOPD accelerated payments have been issued to over 4,200 Part A providers, such as hospitals, totaling more than $2.55 billion. Additionally, CMS issued 4,722 CHOPD advance payments, totaling more than $717.18 million, to Part B suppliers, which include doctors, non-physician practitioners, and durable medical equipment suppliers.

The program was crucial in stabilizing the financial flow for many healthcare providers who faced significant challenges due to the cyberattack. The disruption of Change Healthcare’s services impacted a broad spectrum of healthcare transactions, leading to delays in payments and administrative chaos. CMS’s quick response in implementing the AAP Program ensured that essential services continued without interruption.

Medicare Billing Resumes Successfully as CMS Recovers 96% of CHOPD Payments

Providers of services and suppliers have now resumed successfully billing Medicare. To date, CMS has already recovered over 96% of the CHOPD payments, indicating the program’s effectiveness in mitigating the immediate financial impacts of the cyberattack. After July 12, 2024, CMS will no longer accept new applications for CHOPD accelerated or advance payments, marking the end of this temporary relief measure.

CMS will continue to monitor for other effects of the cyberattack on Medicare providers of services and suppliers and will maintain engagement with industry partners to address any remaining issues or concerns. This continued vigilance is part of CMS’s broader commitment to ensuring the resilience of the healthcare payment system against future cyber threats.

The swift implementation and subsequent success of the CHOPD payments underscore the importance of having robust contingency plans and support mechanisms in place for healthcare providers. Cyberattacks pose a significant risk to the healthcare sector, which relies heavily on digital infrastructure for the delivery of care and administration of services. By providing a rapid response to the disruptions caused by the Change Healthcare cyberattack, CMS demonstrated a model for effective crisis management that can be emulated in future incidents.


Medicare Billing Normalizes as CHOPD Program Ends, Emphasizing Need for Cybersecurity

The conclusion of the CHOPD payment program reflects a return to normalcy for Medicare billing processes but also serves as a reminder of the ongoing need for cybersecurity measures and preparedness in the healthcare industry. As healthcare becomes increasingly digitized, the potential for cyberattacks grows, necessitating a proactive approach to cybersecurity and crisis response.

Moving forward, CMS’s experience with the CHOPD payments will likely inform future policy and response strategies. The collaboration between CMS, healthcare providers, and industry partners will be essential in developing resilient systems that can withstand and quickly recover from cyber incidents. Ensuring the security of electronic health records and payment systems will be critical in protecting patient care continuity and the financial stability of healthcare providers.

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In conclusion, the CHOPD payments were a pivotal response to an unprecedented cyberattack on the healthcare sector, providing crucial financial support to Medicare providers and suppliers. As CMS concludes this program, it will continue to monitor the situation and engage with industry partners to address any lingering effects. The lessons learned from this incident will be invaluable in strengthening the healthcare system’s resilience against future cyber threats.


Resource: Centers for Medicare & Medicaid Services, June 17, 2024

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