UnitedHealth Estimates Change Hack Costs Could Reach $1.6B

April 16, 2024
Optum Insight’s CEO tells analysts 80% of the processing hub’s most important operations have been restored since the mid-February cybersecurity breach.

Executives of UnitedHealth Group Inc. said April 16 that the broad cybersecurity breach at the company’s Change Healthcare unit cost it $872 million in the first quarter and added that they expect that figure to grow to between $1.35 billion and $1.6 billion on a pre-tax basis.

Those cost estimates, provided as part of United’s first-quarter earnings report, cover both spending related to responding directly to the hack by securing Change’s network and dealing with affected providers and partners as well as broader business disruption costs. They do not, however, include another $800 million United’s leaders are setting aside as claims reserves to cover potential claims from providers that have been lost in the wash since United reported the breach Feb. 21.

Speaking to analysts after the publication of United’s earnings, President and CFO John Rex said it’s likely the final payouts from that extra pool of reserves won’t be the full $800 million but that the Minnesota-based company’s leadership team is being careful with estimates.

“There clearly had to be some disruption in the quarter in claims patterns and so you’re trying to make some estimation in that zone to anticipate that,” Rex said. “And you should expect that we’ll probably continue with a judicious view over this, over the next several quarters actually […] We really want to be careful on that because we know there are certain care providers out there that may have been left out.”

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