5 key cash flow crisis management strategies for medical practices after the Change Healthcare outage

In the wake of the cyberattack on Change Healthcare that cut off revenue cycle services for many medical practices, private practices across the country find themselves in dire financial straits. With their primary billing mechanism suddenly inoperative, the consequent disruption to incoming cash flow may threaten payrolls for many and, in the worst-case scenario, the very survival of some practices.

To effectively weather this challenging period and minimize long-lasting damage, practices should urgently act to ensure immediate liquidity and mitigate disruption.

1. Immediate cash flow management

• Mobilize staff where possible to manually process insurance claims electronically or upload documentation directly to payer portals to restart revenue inflows. Reset expectations for progress, as this will occur at a much slower pace than digital billing.
• Contact multiple financial institutions such as banks and credit unions to explore options for short-term financing via secured loans or flexible lines of credit to cover essential near-term costs until electronic billing functionality resumes.
  

2. Strategic financial planning

• Secure flexible credit lines of $50,000 to $250,000 from preferred lenders based on practice scale, drawing funds as needed to cover payroll, medication refills, supplies and to cover minimum vendor payments.
• Conduct a line-item expense review, prioritizing critical recurring costs while deferring low priority expense items, contracts and subscriptions for three to six months.
  

3. Transparent patient communication

• Draft a patient email explaining anticipated billing delays of four to six weeks due to the outage, with an option to pay balances upfront or set up extended payment plans.
• Receptionists should request estimated copays and any outstanding patient balances at appointment check-in for services that week to sustain revenue flow.
  

4. Operational streamlining

• Negotiate new payment plans with key vendors to delay significant expected expenditures by 30 to 90 days.
• Adjust clinical and administrative staff schedules where possible through reduced hours, rotational shifts or temporary remote work to right-size payroll costs.

5. External support and advocacy

• Inquire and stay apprised of any state or federal emergency relief programs for practices affected by the cyberattack.
• Collaborate and stay apprised of state and federal advocacy efforts on behalf of medical practices.

While proactively implementing these strategies can help stabilize practices financially and operationally in the short term, additional efforts are needed for many practices to fully recover from the lasting impacts of a prolonged outage. Practices should continue to actively engage associations such as MGMA to amplify challenges being faced on the ground. Specifically, practice administrators are encouraged to keep up to date on MGMA's advocacy efforts, updates and online discussions to communicate their ongoing needs to inform the organization's policy agenda.

MGMA's Government Affairs team recently wrote to HHS Secretary Xavier Becerra emphasizing the cyberattack's serious ramifications and urging measures to avoid exacerbating issues and support practices. MGMA will continue to monitor updates, including those about any relief programs, and note them in upcoming MGMA Washington Connection newsletters.