UnitedHealth Group expects Change Healthcare cyberattack to cost $1-1.5 billion; UnitedHealth Group reports Q1 results

The recent cyberattack on Change Healthcare is expected to have significant financial repercussions for UnitedHealth Group, with CFO John Rex estimating costs of $1 billion to $1.5 billion this year. The attack, which occurred on February 21, disrupted claims payments for hospitals and physician practices, leading to potential bankruptcy for some healthcare providers, according to a survey by the American Medical Association.

UnitedHealth Group, the parent company of Optum, which owns Change Healthcare, has been working to restore systems and support providers by offering accelerated payments. CEO Andrew Witty emphasized the company’s commitment to ensuring care delivery amidst the cyberattack fallout, with plans to fully recover performance levels by next year.

Despite challenges posed by the cyberattack, Medicare Advantage remains a strong business for UnitedHealth Group. The company has implemented a three-year plan to navigate funding reductions introduced by the Centers for Medicare and Medicaid Services, with a 0.16% decrease in benchmark rates expected for 2025.

In terms of financial performance, UnitedHealth Group reported a net loss of $1.2 billion for the first quarter, largely attributed to costs associated with the cyberattack and the sale of its Brazil operations. However, the company’s stocks rose on Tuesday following better-than-expected revenue of $99.8 billion for the quarter.

Overall, UnitedHealth Group is working diligently to address the challenges posed by the cyberattack and maintain its strong position in the healthcare industry.