How a crippling cyber attack on a U.S. healthcare company is impacting Pueblo physicians

When an Eastern European cyber terrorist group launched a ransomware attack on the healthcare technology company Change Healthcare, it caused repercussions that have been deeply felt across the country, including in Pueblo.

Dr. Rakesh "Rocky" Khosla, a local family practice physician at Pueblo Sports and Family Medicine, said the attack has caused "the most stress I've had." He's had to borrow against his home and tap into his retirement fund just to make payroll.

Khosla said the devastation started Feb. 22, when the cyber attackers targeted Change Healthcare, a large clearing house for medical claims which is owned by UnitedHealth Group. The malware attack crippled the company's ability to conduct business electronically.

"They process a significant amount of our claims, so that ransomware hit paralyzed the system," Khosla told the Chieftain. "We didn't essentially get paid for about two months.

"We burnt through our reserves, and I had to basically maximize my home equity loan. I took out a loan against my retirement just so we could make payroll," he explained.

"It has just been the weirdest time, just the most stress I've had because you have employees and they have obligations like house payments."

The stress has impacted his office manager, too, who has been cranking out bills by hand and mailing them in instead of submitting them electronically. There have been no "significant" payments through the snail mail method yet, he said.

"We had $7,000 in our account on a Monday, payroll was going to be that Friday and it was $21,000 and I was sweating it. I finally got the money from my retirement and we barely made payroll," Khosla said.

Relief fund has provided some help

According to a March 3 update from UnitedHealth Group, the company has "advanced nearly $4.7 billion to providers in need and will continue to provide financial support to providers through full system recovery."

Khosla said he is one of the providers who received an interest-free loan as part of the relief fund.

"That has helped us, so we are at least out of that bottleneck," Khosla said. "My understanding is that once we have 80 to 90% of the monies that were supposed to be paid to us come back to us, we have 45 days to pay the loan back, so that is going to be tricky."

The loan has at least helped Khosla negotiate expenses like payroll, rent and supplies.

Small practices have been hardest hit

An April 10 article from the American Medical Association indicates that smaller medical practices are being hardest hit.

"I am not alone. I think the majority of us who are in private practice who are not part of a huge healthcare system — the small practices — are impacted," Khosla said. "The rural areas are really hammered and a bunch of them have just closed up because, what can they do?"

Psychotherapist Regan Young, chief executive officer for A New Leaf Therapy in Pueblo, told the Chieftain her business does not use Change Healthcare as a clearinghouse.

"We weren’t directly impacted, but I’ve heard from other practices who were at risk of having to close their doors due to not being able to bill for appointments to cover operating expenses. It’s really been a tragedy for some wonderful organizations working to provide helpful services for the community," Young said.

"For those organizations that have been able to effectively navigate the situation, I know it’s caused a lot of stress and hardship," she said.

The attack has made Khosla realize how fragile the financial systems are in the medical field.

"In medicine, we did not invest as much in protecting against cyber attacks, so that leaves us wide open. It makes me angry because Change Healthcare takes a small percentage for processing our claims and I'd like to think these people would do a better job of investing in infrastructure so this kind of thing doesn't happen," Khosla said.

Khosla mentioned there are reports that a second cybercriminal group hit the Change Healthcare system again on April 8.

"The more you hear about it, the more you shake your head," he said.

Khosla said it has been suggested he get an alternate clearinghouse to handle his claims, but he said that too "is no easy job to make a big transition like that."

Public awareness of attack is one silver lining

There is a silver lining to the dark cloud involving the cyber attack: media reports have helped spread awareness.

"One gentleman last week came in to the office and he said to me, 'I know a doctor I really like and I want that doctor to be OK,' and he pulls out $10,000 in cash and says, 'I want you to have this," Khosla recalled.

"I said, 'Thank you very much but I can't accept that — we got relief funds.'"

"That just melted me — when something like that happens it just restores your faith," he said. "Pueblo is a cool place — I just love the place."

More: Cyber attack on Colorado public defender system causes 'moderate disruption' to Pueblo courts

Chieftain reporter Tracy Harmon covers business news. She can be reached by email at tharmon@chieftain.com or via X, formerly Twitter, at twitter.com/tracywumps. Support local news, subscribe to The Pueblo Chieftain at subscribe.chieftain.com.

This article originally appeared on The Pueblo Chieftain: Change Healthcare cyber attack paralyzes finances for Pueblo doctor