(WRGB) — Tensions are escalating between CDPHP, a nonprofit health insurance company, and local healthcare providers over a financial dispute involving millions of dollars in withheld reimbursement payments. CDPHP has announced it will not return 2024 withhold payments to healthcare providers across the Capital Region.
Withhold payments are a portion of healthcare dollars held by a health plan, typically returned at the end of the year if certain standards are met. Changes to the Medicare wage index by the federal government have led CDPHP to reimburse hospitals an additional $150 million for care provided to Medicare Advantage members, without a corresponding premium increase from the government. This situation arises amid increased demand for high-cost drugs, new taxes, fees, and mandates.
In late 2024, Albany Medical Center sued CDPHP for withholding millions in payments related to the wage index. An agreement was reached, and the hospital dropped the charges.
Dr. Lance Sullenberger, a cardiologist and chief operating officer at Capital Cardiology Associates, emphasized the importance of these payments. “Those withhold payments which average anywhere from 12 to 15% have always been paid back to provider groups across the capital region,” he said. “And this is the first year where CDPHP decided not to pay provider groups so for Capital Cardiology. That was about a $1.9 million payment for services that we had already rendered to CDPHP patients in 2024.”
Dr. Sullenberger added, “You depend on payments from insurance companies to run your practice which means keeping the lights on, paying your leases, buying new equipment, paying your employees, paying your retirement for your employees, investing in new technologies. When a major payer just decides, ‘Hey, I know we owe you this money, but we’re not going to pay it,’ it has a financial impact.”
Despite the financial strain, Dr. Sullenberger said they will continue to see CDPHP patients.
Paul Kahlon, CDPHP’s chief financial officer, acknowledged the impact of the decision in a statement: “CDPHP recognizes that our decision will negatively impact our deeply valued provider partners. However, given ongoing market pressures, this decision was necessary to strengthen the plan’s long-term financial health.”
Last week, CDPHP called on Congress to provide critical relief for health plans in upstate New York.
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