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Alaska healthcare business damaged by national cyberattack

Cyber Intelligence

An Alaska health provider may close its doors following a national cyberattack last month, and is asking the state for temporary financial help.

A national healthcare payment database known as Change Healthcare was hacked on February 21st, affecting nearly 50 percent of medical providers across the country. It severed doctors’ and pharmacies’ ability to access patients’ payer information, affecting insurance, Medicare, and Medicaid payments.

In Alaska, that means providers like Nursing Diversified Systems can’t meet their payroll.

“Our wages run about $67, 000 every two weeks.” “I have leveraged all of my resources to a very large amount of money, like just under $200,000 in debt, to keep the company going for the last month," Lyons said.

Teresa Lyons owns Nursing Diversified, or ND Systems, which provides mental health services to about a thousand patients in Fairbanks, Kenai, and Anchorage, Alaska.

After the cyberattack, Change Healthcare quickly set up a temporary payout portals… but only providers who use a particular electronic tool can access them. ND Systems can’t.

“When we generate a charge slip, whether it's Medicaid, Medicare, Premera, Blue Cross, Aetna, Moda, Tricare -- they can't get through.”

Lyons says she’s taking advantage of Medicare’s temporary system for providers affected by the hacking: Medicare is giving the same amount of money providers billed for from last August to October. Then once the database crisis is straightened out, Medicare will reconcile the difference with providers. Medicare only accounts for 11% of Nurses Diversified’s business.

“But Medicaid is almost 45%.”

Lyons is asking the state of Alaska to allow Medicaid to have a similar forward-payout system, at least until the cyberattack is resolved. She wrote a letter last week to the state health department, the governor and the legislature.

Spokespeople for the Alaska Department of Health did not return calls on Friday or over the weekend. But on the DoH website, the Department has set up a paper payout system, for providers to enter patient information one case at a time -- which takes about a half-hour. Lyons says it would require a full-time staff person just to do the paper billing.

 “So, what we're doing, we're restructuring the company right now.”

Last week Lyons paid her last payroll, and laid off two Psychiatric Nurse Practitioners, one in Fairbanks and the other in Kenai, and three early career clinicians, based in Fairbanks.

"The other five of us have agreed to essentially function as contract employees. If, when money starts flowing through, we'll be paid a percentage. So, we will continue to see clients for a little bit more. But at some point, if this doesn't stop, we will close the practice completely,” Lyons said.

The cyberattack on Change Healthcare also hit Interior Alaska’s largest healthcare provider: Foundation Health Partners, that runs Fairbanks Memorial Hospital. But, Kelly Atlee, spokesperson for FHP says it had minimal impact on daily operations.

“We are experiencing some delays but have been able to adapt most of our workflows, which has minimized the direct impact on our patients. We are having some challenges with backend processes for sending out insurance bills, but we’re working on getting them resolved.”

Until Change Healthcare is back online, FHP recommends that patients bring their insurance cards to appointments or to pick up prescriptions.

Robyne began her career in public media news at KUAC, coiling cables in the TV studio and loading reel-to-reel tape machines for the radio station.