Zoomer Hackers Shut Down the Biggest Extortion Ring of All
Linda Witzal runs a small independent pharmacy that caters exclusively to about 1,200 residents of New Jersey senior living facilities. Virtually all the revenue she takes in comes, ultimately, from the government. In a simpler time, she billed New Jersey Medicaid directly for most of her patients. “When I started in this business, I was 28 years old, and New Jersey was actually very easy to get on the phone back then,” Witzal, now in her early sixties, recalls.
Three and a half decades later, there’s a whole legalized extortion ring that small pharmacies like Witzal’s need to pay off to access Medicare and Medicaid funds, a symptom of the middleman creep in the pharmaceutical transaction chain. Standing between pharmacies and reimbursement checks for the drugs they dispense include the administrators of managed care programs, the tyrannical triumvirate of dominant pharmacy benefit managers that represent about 85 percent of all health plans, and Change Healthcare, the electronic data clearinghouse—or “switch,” as pharmacists call them—she uses to access the computer ecosystems of these middlemen. Until last week, Witzal viewed Change as one of the least-bad gatekeepers in the pharmacy business, though that was starting to change in the aftermath of its 2022 acquisition by UnitedHealth Group, the $372 billion Minnesota health care leviathan, which axed hundreds of tech and call center employees immediately after closing the deal. “It was getting harder and harder to get someone on the phone,” she says.
Then just over a week ago, Change abruptly shut down for Witzal and 67,000 other pharmacies it services. The company, it turned out, had been attacked by an extortion ring of its own, a hacker UnitedHealth initially identified in a Securities and Exchange Commission filing as a “suspected nation-state-associated cyber security threat actor” but has since emerged as the ransomware gang BlackCat/ALPHV, whose affiliates cybersecurity experts have previously described as native English speakers from predominantly “Western countries” between the ages of 17 and 22.
Ransomware gangs, which brought in a record $1.1 billion in…
