Fairview Health Services Sues Change Healthcare After Incurring $7 Million in Losses
Change Healthcare is facing another class action lawsuit over its February 2024 ransomware attack. The latest lawsuit was filed by a healthcare provider to recover losses incurred due to the prolonged outage of Change Healthcare’s claims processing and payment functions.
The ransomware attack was conducted by an affiliate of the BlackCat (ALPHV) ransomware group in February 2024. According to the latest estimate from Change Healthcare, the protected health information of 190 million individuals was stolen in the attack. Many class action lawsuits have already been filed against Change Healthcare over the breach, and they have been consolidated into a single lawsuit, which Change Healthcare is currently attempting to have dismissed. More than two dozen healthcare providers have also sued Change Healthcare to recover losses incurred due to the attack and the massive disruption to its clearinghouse services that followed.
The latest lawsuit was filed by Fairview Health Services, a Minneapolis, MN-based integrated healthcare system that operates 10 hospitals and medical centers, along with primary and specialty care clinics, senior facilities, facilitated living centers, rehabilitation centers, home health care services, counseling, pharmacies and benefit management services at over 100 locations. Fairview Health Services claims that the outage at Change Healthcare resulted in approximately $7 million in losses, with a large proportion of those losses incurred in anesthesia due to the inability to bill for services. The lawsuit claims the outage prevented Change Healthcare from processing claims for its anesthesia services for more than six months. That meant Fairview Health Services was unable to bill patients for their share of the service costs, which resulted in a poor patient experience, loss of payment, and increased bad debt.
During the outage, Fairview Health Services said it was forced to pay workers overtime to mitigate the impact as cash flow virtually stopped, and expenses were incurred with third-party providers who helped post payments during the prolonged outage. “As a result of [Change Healthcare’s] failure to perform the services it had promised, the interruption in billing for anesthesia services resulted in Fairview having remaining balances from the gap in coverage of over seven million dollars,” according to the Fairview Health Services complaint.
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The lawsuit was originally filed in Ramsey County District Court but was moved to the U.S. District Court in Minnesota. Fairview Health Services asserts claims including negligence and breach of contract, and is attempting to get Change Healthcare to pay restitution and damages to make up for that shortfall, plus an award of compensatory damages of more than $75,000. UnitedHealth Group claims the lawsuit is baseless and has issued a statement confirming its intention to mount a vigorous defense.
