UnitedHealth earns emergency order to buy radiology provider placed in crisis due to Change cyberattack
UnitedHealth Group subsidiary Optum has earned an emergency order to buy a distressed radiology provider placed in crisis due to a cyberattack on another UHG company.
The nation’s largest healthcare corporation in December made an offer for the Corvallis Clinic in Oregon, which has 11 locations across the state’s Willamette Valley. Founded over 75 years ago, the independent multispecialty group offers radiology, primary care, physical therapy and other services.
State authorities were slated to review the deal. However, UHG has applied to bypass this step, with the clinic hampered by the ongoing outage of Change Healthcare—the nation’s largest healthcare payment processing system.
“Our claims processing goes through [Change], so all of a sudden there was no money coming in," an anonymous Corvallis Clinic employee told the American Prospect. “They're praying that the sale’s going to go through and that Optum will front them the money.”
UnitedHealth’s application to bypass the review redacts the reasons for needing the deal fast-tracked. However, the source told the news outlet that it was the Change attack that pushed Corvallis over the edge. But even prior to the incident, the clinic already was grappling with financial challenges that had forced it to seek a sale, leaders emphasized.
The Oregon Health Authority granted the request March 13, given Corvallis Clinic’s cash flow concerns.
“Absent closure of the transaction as expeditiously as possible, the Corvallis Clinic is expected to be insolvent in the immediate term,” the OHA said in its response. “The information provided to date reflects that the proposed transaction is necessary to protect the interest of consumers and preserve TCC's solvency.”
Corvallis shareholders, including over half of its 110 physicians, were working without pay amid the Change cyberattack, the source told the American Prospect. The organization operates X-ray, ultrasound, CT and MR scanners through its imaging department, but contracts with outside rads for the reads, CEO James Kaech told Radiology Business previously.
Radiologist and podcaster Tarang Patel, MD, commented about the clinic sale on social media Friday. Optum is the largest employer of physicians in the U.S., with some 90,000 doctors on its payroll.
“This type of ruthless behavior would make organized crime/drug cartels proud,” he wrote. “Make an offer. Use a crisis you are significantly involved in to create stress. Use that stress to force sale.”
Read more about the clinic’s future here:
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.