ALBANY, N.Y. – October 9, 2024 – CDPHP is a physician-founded, not-for-profit health plan that takes seriously its responsibility to control the rising cost of health care and be a good steward of our members’ premium dollars. Our physician-led, customer-centric approach to care has led to some of the highest quality and customer satisfaction scores anywhere in New York and the nation.
However, we cannot ignore the fact that CDPHP and its competitors continue to face significant financial losses, due largely to the financial windfall hospitals in Upstate New York received from changes to the Medicare Wage Index. This policy, which provided an influx of $1 billion dollars in new federal funding to area hospitals without corresponding funding for private Medicare Advantage plans, has resulted in a massive unfunded mandate for small, regional health plans, like CDPHP. These losses threaten the sustainability of the Medicare Advantage program in upstate New York, and more importantly, the millions of seniors they serve.
Background Information
In 2023, the Centers for Medicare and Medicaid Services (CMS) approved significant payment increases for hospitals throughout Upstate NY. The news was celebrated across the state as most hospitals received sizeable rate increases ranging between 20 – 43 percent.
Unfortunately, CMS failed to align private Medicare Advantage premiums with this adjustment, leaving CDPHP with a significant unfunded mandate that will result in nearly $150 million in losses over the next two years. The issue is exacerbated by the fact that CDPHP has increased current and prior year commercial rates to supplement historically low Medicare rates.
“In order to protect the benefits and out-of-pocket health care costs paid by local seniors living on fixed incomes, CDPHP made the decision to contest these new payments to Albany Med Health System and St. Peter’s Health Partners, until the matter was resolved. We do, however, continue to pay our hospital partners at the rates agreed to prior to this unfunded mandate being imposed by CMS,” said CDPHP president and CEO, Brian O’Grady.
““As a physician founded and guided health plan – with the majority of our board being local, practicing doctors – CDPHP understands the critical role our hospital partners play in keeping our community healthy. While we support the additional federal funding being provided to our local hospitals, this policy change has left the future of our great health plan – and the 65,000 seniors who entrust us with their care – in jeopardy.”
“Unlike our national, for-profit counterparts, some of which have exited the market as a result of this new rule, CDPHP doesn’t have the deep pockets needed to absorb these costs, nor would we want to leave this community we call home.”
Next Steps
CDPHP is calling on Congress to enact bipartisan legislation to protect the benefits and access to care for hundreds of thousands of seniors enrolled in Medicare Advantage plans in Upstate New York. CDPHP is urging quick action in favor of the legislation sponsored by Congresswoman Claudia Tenney (NY-24) and cosponsored by Representatives Paul Tonko (NY-20), Elise Stefanik (NY-21), Joseph Morelle (NY-25), Marc Molinaro (NY-19), Brandon Williams (NY-22), and Nick Langworthy (NY-23).
“Over the past several months, we have engaged in productive discussions with Albany Med leadership and understand the hospital's financial position remains strong. We had hoped that instead of initiating costly and unnecessary litigation, Albany Med would work collaboratively with us to resolve this payment issue in Washington.”
About CDPHP®
Established in 1984, CDPHP is a physician-founded, member-focused and community-based not-for-profit health plan that offers high-quality affordable health insurance plans to members in 36 counties throughout New York. CDPHP is also on Facebook, X, LinkedIn, and Instagram.