March 13 (Reuters) - UnitedHealth Group ( UNH ) has
already been hit with at least six class action lawsuits
accusing it of failing to protect millions of people's personal
data from last month's hack of Change Healthcare, its payment
processing unit, with more lawsuits likely to come.
In a motion filed late on Tuesday in Washington, D.C.,
plaintiffs' lawyers asked a federal judicial panel to
consolidate the six cases in federal court in Nashville,
Tennessee, where Change is headquartered, and said they expected
more cases to be filed.
It is not known how large the litigation could become
because it is not clear how much or what kind of information was
compromised in the attack, which was carried out by the
ransomware hacker group BlackCat.
UnitedHealth ( UNH ), which disclosed the attack on Feb. 21 without
specifying how many people were affected, said in a statement
Wednesday that it was focused restoring Change's operations.
UnitedHealth ( UNH ) hasn't said if BlackCat demanded ransom, but a
post on an online forum used by hackers claimed the company paid
$22 million to the hackers for regaining access to its locked
systems.
Under the Health Insurance Portability and Accountability
Act (HIPAA), a U.S. health privacy law, companies have 60 days
after discovering a data breach to notify affected individuals
that their personal information has been compromised.
For breaches affecting more than 500 people, the company
must notify federal regulators and prominent media. UnitedHealth ( UNH )
has so far not given such a notice.
Change processes about 50% of the medical claims in the
United States for around 900,000 physicians, 33,000 pharmacies,
5,500 hospitals and 600 laboratories.
The attack has halted Change's operations, leaving
providers, including major hospital systems, small medical
practices and pharmacies unable to collect payments. According
to UnitedHealth's ( UNH ) website, Change is expected to resume
processing payments by March 15.
All of the lawsuits claim that Change failed to safeguard
patients' personal information, putting them at risk of identity
theft and privacy violations. Some also allege that patients
have been unable to fill prescriptions because their insurance
claims cannot be processed, putting their health at risk.
Plaintiffs say that information stored by Change, and now
potentially at risk, includes medical records, payment
information, names and Social Security numbers. One of the
lawsuits says that "information from the data breach is on the
dark web and already being offered for sale," though it does not
provide any details supporting that claim.
The lawsuits accuse the company of negligence and of
violating the privacy requirements in HIPAA and various state
laws.
Four of the lawsuits are filed against Change in Nashville,
and two are filed against UnitedHealth ( UNH ) in the parent company's
home state of Minnesota.
Tuesday's motion was filed by the lawyers in the Nashville
cases. Lawyers in the Minnesota cases could file a competing
motion to have the cases moved to their court, in which case the
U.S. Judicial Panel on Multidistrict Litigation would decide
where to send them.