Change Healthcare
| Company type | Public (formerly) |
|---|---|
| Industry | Healthcare technology, revenue cycle management |
| Founded | 2007 in Brentwood, Tennessee, United States |
| Founder | Christopher Parks, Robert Hendrick |
| Headquarters | Nashville, Tennessee , United States |
Area served | United States, Canada, New Zealand, Israel, Taiwan, United Kingdom, Philippines |
Key people | Andrew Witty (CEO of parent company UnitedHealth Group) |
| Products | Revenue and payment cycle management services, healthcare IT solutions |
| Parent | UnitedHealth Group (since 2022) |
| Website | changehealthcare |
Change Healthcare Inc. (previously known as Emdeon) stands as a prominent provider specializing in revenue and payment cycle management services that link payers, providers, and patients throughout the U.S. healthcare ecosystem. The organization manages the nation’s largest exchange for financial and administrative healthcare information.
Based in Nashville, Tennessee, Change Healthcare operates more than 89 offices worldwide, with locations spanning Canada, New Zealand, Israel, Taiwan, the UK, and the Philippines.
Change Healthcare Origins (2007)
Established in 2007 in Brentwood, Tennessee by entrepreneurs Christopher Parks and Robert Hendrick, Change Healthcare initially focused on delivering consumer engagement solutions and cost transparency tools tailored for health plans and self-insured employers across the United States. Their primary offering was MedBill Manager.
By January 2010, the company shifted its strategy toward a business-to-business approach by introducing the Change Healthcare Engagement Platform.
In April 2011, Howard McLure, formerly president of CVS Caremark, joined as chairman and CEO, bringing extensive industry expertise and strategic direction. Doug Ghertner was appointed president in July 2011 and later advanced to CEO in September 2012 when McLure assumed the role of executive chairman.
To support expansion, Change Healthcare secured several rounds of funding: a financing round in December 2011 led by Sandbox Industries, BlueCross BlueShield Venture Partners, and West Health Investment Fund; followed by a $15 million Series D round in July 2013 spearheaded by HLM Venture Partners alongside new investor Noro-Moseley Partners.
The company’s strong organizational culture and growth were recognized in 2013 when it was named one of Modern Healthcare’s “100 Best Places to Work in Healthcare.”
Emdeon Background
In 2004, WebMD Corporation acquired Dakota Imaging, Inc. and ViPS, Inc. Until August 2005, Emdeon functioned under WebMD Corporation (NASDAQ: HLTH) before rebranding to Emdeon to differentiate from its subsidiary WebMD, which went public under ticker WBMD in September 2005.
Between 2009 and 2011, Emdeon expanded its healthcare technology and payment services capabilities through several acquisitions. Notable purchases included The Sentinel Group (fraud detection software), Future Vision Investment Group (outsourced electronic data conversion), Healthcare Technology Management Services (payer consulting), Chapin Revenue Cycle Management (accounts receivable recovery), Interactive Payer Network (HIPAA-compliant EDI services), Chamberlin Edmonds & Associates (government eligibility verification), and EquiClaim (audit and recovery solutions).
In August 2011, private equity firm Blackstone Group acquired Emdeon for $3 billion with financing assistance from Bank of America Merrill Lynch, Barclays Capital, and Citigroup. This acquisition underscored confidence in Emdeon's leading position and growth prospects within healthcare payment solutions.
Subsequent strategic acquisitions included TC3 Health in 2012 (cost containment and payment integrity), Gold Health Systems in 2013 (pharmacy benefits management for Medicaid), Capario in 2014 (healthcare technology solutions), and Change Healthcare itself in November 2014 for $135 million. Additionally, Emdeon acquired Admini Source Communications in December 2014 and Altegra Health in August 2015, which provided data analytics and member engagement platforms.
Emdeon transitioned its corporate identity to Change Healthcare in November 2015 to reflect its broadened focus on healthcare technology.
In June 2016, McKesson Corporation collaborated with Change Healthcare Holdings to create a new joint healthcare entity combining most of Change Healthcare’s operations with McKesson’s Information Technology division. McKesson retained approximately 70% ownership; the merged company continued under the Change Healthcare name.
Positioning for public offering, Change Healthcare filed for an IPO at the end of 2018. On June 27, 2019, it commenced trading on NASDAQ under ticker CHNG, successfully raising over $640 million by selling up to 49.2 million shares at $13 each.
In December 2018, Change Healthcare enhanced its technology portfolio by acquiring essential assets and intellectual property from healthcare IT startup PokitDok.
In January 2021, UnitedHealth Group’s Optum Insight announced plans to acquire Change Healthcare for $13 billion, including taking on $5 billion in debt. Following regulatory delays due to antitrust reviews, the transaction was finalized on October 3, 2022.
In 2022, Change Healthcare partnered with Luma Health to introduce a patient engagement platform designed to improve communication and access within healthcare services.
This series of acquisitions and collaborations illustrates Change Healthcare’s strategic approach toward expanding its footprint across healthcare IT services, payment integrity solutions, and patient engagement technologies within the U.S. healthcare market.
2024 Cyberattack
On February 21, 2024, a major cyber intrusion severely impacted the company’s operations by interrupting payments to physicians and suspending electronic claims processing and payment systems. This disruption forced patients to cover medication costs directly, foregoing coupons or copay assistance. Healthcare providers reported daily revenue shortfalls reaching as high as $100 million, placing some at risk of financial collapse. In response, the United States Department of Health and Human Services (HHS) initiated a civil rights probe concerning potential breaches of patient privacy.
The following day, February 22, 2024, UnitedHealth Group alerted the Securities and Exchange Commission about a cybersecurity breach attributed to a "suspected nation-state threat actor" that infiltrated Change Healthcare’s IT infrastructure. This incident affected prominent clients such as CVS Health, Walgreens, Publix, GoodRX, BlueCross BlueShield of Montana, Naval Hospital Camp Pendleton, and athenahealth.
By February 29, 2024, UnitedHealth confirmed that the ransomware attack was orchestrated by the ALPHV/BlackCat cybercriminal group. The company enlisted law enforcement agencies along with cybersecurity experts from Mandiant and Palo Alto Networks to address the breach.
On March 4, 2024, reports surfaced indicating a bitcoin ransom payment close to $22 million was made to wallets linked with ALPHV. UnitedHealth neither confirmed nor denied the payment but stressed that investigations and system recovery efforts were ongoing.
As of March 18, 2024, UnitedHealth Group had disbursed more than $2 billion in advance payments to healthcare providers impacted by the attack. Additionally, partial functionality was restored to Change Healthcare’s payment processing platform and its pharmacy network.
Response
On March 1, 2024, UnitedHealth Group’s Optum division introduced a Temporary Funding Assistance Program aimed at helping providers manage short-term cash flow challenges caused by disruptions in payments processed through Change Healthcare. The American Hospital Association (AHA) criticized this initiative, noting Optum’s ability to reclaim funds immediately without prior notification and to alter contract terms unilaterally.
On March 5, 2024, the U.S. Department of Health and Human Services announced new financial relief measures for hospitals affected by the cyberattack. Nevertheless, the AHA regarded these steps as inadequate for addressing the full scope of the crisis.
UnitedHealth CEO Andrew Witty was called upon by the Biden administration on March 12, 2024, alongside leaders from across the healthcare industry. HHS Secretary Xavier Becerra and White House domestic policy director Neera Tanden pressed UnitedHealth to enhance financial support for providers impacted by the incident.
By April 16, 2024, UnitedHealth Group had advanced more than $6 billion in payments to healthcare providers affected by the cybersecurity breach, reflecting a substantial financial commitment amid ongoing operational difficulties.