Medical Debt Collection Firm R1 RCM Hit in Ransomware Attack

R1 RCM Inc. [NASDAQ:RCM], one of the nation’s largest medical debt collection companies, has been hit in a ransomware attack.

Formerly known as Accretive Health Inc., Chicago-based R1 RCM brought in revenues of $1.18 billion in 2019. The company has more than 19,000 employees and contracts with at least 750 healthcare organizations nationwide.

R1 RCM acknowledged taking down its systems in response to a ransomware attack, but otherwise declined to comment for this story.

The “RCM” portion of its name refers to “revenue cycle management,” an industry which tracks profits throughout the life cycle of each patient, including patient registration, insurance and benefit verification, medical treatment documentation, and bill preparation and collection from patients.

The company has access to a wealth of personal, financial and medical information on tens of millions of patients, including names, dates of birth, Social Security numbers, billing information and medical diagnostic data.

It’s unclear when the intruders first breached R1’s networks, but the ransomware was unleashed more than a week ago, right around the time the company was set to release its 2nd quarter financial results for 2020.

R1 RCM declined to discuss the strain of ransomware it is battling or how it was compromised. Sources close to the investigation tell KrebsOnSecurity the malware is known as Defray.

Defray was first spotted in 2017, and its purveyors have a history of specifically targeting companies in the healthcare space. According to Trend Micro, Defray usually is spread via booby-trapped Microsoft Office documents sent via email.

“The phishing emails the authors use are well-crafted,” Trend Micro wrote. For example, in an attack targeting a hospital, the phishing email was made to look like it came from a hospital IT manager, with the malicious files disguised as patient reports.

Email security company Proofpoint says the Defray ransomware is somewhat unusual in that it is typically deployed in small, targeted attacks as opposed to large-scale “spray and pray” email malware campaigns.

“It appears that Defray may be for the personal use of specific threat actors, making its continued distribution in small, targeted attacks more likely,” Proofpoint observed.

A recent report (PDF) from Corvus Insurance notes that ransomware attacks on companies in the healthcare industry have slowed in recent months, with some malware groups even dubiously pledging they would refrain from targeting these firms during the COVID-19 pandemic. But Corvus says that trend is likely to reverse in the second half of 2020 as the United States moves cautiously toward reopening.

Corvus found that while services that scan and filter incoming email for malicious threats can catch many ransomware lures, an estimated 75 percent of healthcare companies do not use this technology.