An R1 Case Study in Crisis Response
The Change Healthcare (CHC) ransomware incident in February 2024 rocked the healthcare industry. The attack triggered an outage that hobbled insurance claim processing and lasted for months. Because Change Healthcare was processing about 40 percent of all claims in the U.S. and the outage was so prolonged, the impact was both wide and deep. CHC now estimates approximately 190 million patients had their data breached, nearly double the 105 million the company had been reporting. Financial filings indicate Change Healthcare lost more than $3 billion in 2024 because of the attack, which is by far the largest data breach in the history of U.S. healthcare.
While the repercussions of the Change outage are still being felt, the incident serves as a pivotal case study in R1 crisis management in the service of clients, highlighting the decision-making challenges of situational opacity and the need for flexibility in navigating disruptions to deliver the service levels required to restore claim processing operability.
“The initial assurances that the outage would be resolved in a few days didn’t stop us from moving forward with security testing and building a mitigation team. So, you have to be careful about optimistic initial assessments. Don’t let them give you a false sense of security that can delay necessary action. Transparency and realistic assessments are essential for effective crisis management.”
Cecil Pineda, Chief Information Security Officer, R1
After initial incident testing, R1 determined that none of its systems connected to CHC were compromised. At the same time, R1 leadership began assembling a cross-functional “Tiger Team” to lead remediation efforts. Encompassing all key business pillars, including Operations, IT, Engineering, Commercial, Product, Risk and Compliance, and Legal, the response team drove R1’s rapid adaptation to the incident leveraging existing relationships across the industry. As the team acquired more knowledge and it became clear that the outage would not be resolved quickly, they began planning to migrate stalled claim submissions to different clearinghouses.
“We were going to focus on quickly identifying solutions using our key assets of expertise and technology to move definitively forward in new claim and remit capabilities in a very short timeframe. In my mind we were not talking about anything else until we had solutions in place, and that’s what we did.”
Andrew Stieve, Senior Vice President of Revenue Cycle Operations, R1
The R1 response team leaned heavily on the company’s operations leaders and their in-depth knowledge of claim submission and electronic remittance workflows. Because CHC managed such a large share of providers’ claims, knowing the map of provider and payer connections in every direction was essential. It is difficult to overemphasizes the advantages of having secondary connections already on tap to reduce the impact of outages.
“Our team has a tool called Payer Service that maintains multiple eligibility connections, which helped minimize disruptions when Change Healthcare went down. This capability and approach ensured that our clients’ eligibility processes remained largely unaffected, except for those United Healthcare plans that were exclusive to Change.”
Mark Sithi, Senior Vice President of Product, R1
To get claim processing moving, R1 reached out to various clearinghouses to diversify data interchange connections. The high level of cooperation these clearinghouses extended to other stakeholders was instrumental to the eventual success of the unified industry response. Once these connections were up, R1 mobilized a large, interconnected group to manage the claim submission transitions, focusing on getting claims out and cash coming in. One of the biggest jobs involved payer alias mapping, which required aligning various insurance company and plan nomenclatures with clearinghouse directories.
The urgent need to establish alternative routes for claims processing to minimize disruptions led to the creation of R1 Edit, a tool for efficiently routing claims through different clearinghouses. Building on R1 expertise in robotic process automation (RPA), R1 Edit proved to be pivotal in restoring claim processing and cashflow. Applying our proprietary knowledge of claims editing and process automation to facilitate claim acceptance, R1 Edit compiled all vendor formats and rules into a single tool that automated claim editing to make it highly efficient.
“We took a huge stride forward in innovating around process automation with R1 Edit. This tool has become a fully automated solution now, processing claims without a human touch, and we continue to develop its capabilities. By automating workflows we can achieve multiple benefits, streamlining processes, reducing human intervention and enhancing accuracy. But it can involve a lot of work, including the need to align disparate systems and rules across various stakeholders.”
Alex White, Director of Product for Payer Services, R1
Leveraging R1 Edit’s core functionality which was developed and deployed in production in under two weeks, the mitigation team was able to quickly pivot clients’ claims from one clearinghouse connection to another, load balancing as needed to ensure processing continuity despite the Change outage. By bringing the editing functions in house, R1 ensured that claims could be delivered to alternate clearinghouses in acceptable form, further positioning R1 as a leader in claims processing innovation. The stark reality is that cyberattacks are never going away, so adopting advanced technologies in the quest for maximum security is going to be a critical factor in future-proofing the healthcare revenue cycle for optimal performance and operational continuity.
Learn about the power of advanced technologies in the R1 Platform.
