Albany (N.Y.) Med Health System has filed a lawsuit against Capital District Physicians Health Plan, accusing the payer of withholding at least $50 million from Albany Medical Center for care the hospital provided to CDPHP beneficiaries.
Five things to know:
1. The system alleged in an Oct. 8 news release that since Aug. 8, CDPHP "shortchanged 16,225 claims and has continued to do so." It said the state requires that insurers fully reimburse providers for claims within 30 to 45 days of submission and issue a written explanation for any delay. Albany Med said it has not received a formal response from the payer's failure to wholly reimburse the system.
2. Albany Med said withheld claim payments from CDPHP have averaged $2 million per week. The system also claimed another $8 million has been withheld or unpaid since January. Despite multiple conversations with CDPHP, Albany Med alleged that the payer "has given no indication that it will pay what it owes" and is projecting that the company will fail to cover about $50 million in total payment by the end of the year. The system said it has not experienced similar practices with other payers,
3. "With $50 million in funds potentially vanished this year and an untold amount in the future, we may have no choice but to reduce the number of services only we offer," Albany Med Health System President and CEO Dennis McKenna, MD, said in the release. "As the largest health system and private employer in the area, we value the indispensable role we hold in our communities. … If CDPHP does not change the way it does business, we will not be able to do ours in the way we have for years."
4. CDPHP said in an Oct. 8 news release shared with Becker's that increases to the Medicare Wage Index this year have brought more funds to Upstate New York hospitals, but have not allowed Medicare Advantage premiums to reflect the higher costs they must pay. The payer said this has left them with a "significant unfunded mandate that will result in nearly $150 million in losses over the next two years."
CDPHP President and CEO Brian O’Grady said in the release that "in order to protect the benefits and out-of-pocket healthcare costs paid by local seniors living on fixed incomes, CDPHP made the difficult decision to withhold these new payments" to Albany Med and St. Peter’s Hospital, also based in Albany. He said they continue to pay the hospitals at rates agreed to "prior to this unfunded mandate being imposed by CMS."
"Unlike our national, for-profit counterparts, some of which have exited the market as a result of the rule, CDPHP doesn’t have the deep pockets needed to absorb these costs," Mr. O'Grady said.
5. CDPHP said in the release it is calling on Congress to enact legislation "to protect the benefits and access to care for hundreds of thousands of seniors enrolled in Medicare Advantage plans in Upstate New York."