As a physician-founded, not-for-profit health plan, CDPHP values the partnerships we share with local health care providers, like yourself. Our plan has a long history of working alongside local doctors to improve the quality, accessibility, and affordability of care in the communities we call home.
However, CDPHP – and the entire Upstate New York not-for-profit health insurance industry – continues to face significant financial headwinds due in large part to the effects of the Medicare wage index and skyrocketing drug and hospital costs. These factors combined have led to multiple years of losses for our health plan and the recent decision by the CDPHP Board of Directors not to pay the 2024 physician withhold.
While many of our physician partners understand and appreciate the difficulty in making this decision, we want to provide a transparent explanation of the withhold and the decision-making process to eliminate confusion and the spread of misinformation.
What’s a provider withhold?
A provider withhold is a portion of health care dollars held by a health plan as part of a risk-sharing agreement with doctors. There are a number of different types of withholds in provider contracts where payments to providers are contingent upon both the provider meeting certain quality metrics and the health plan’s financial performance.
The specific withhold in question relates to amounts withheld from physician payments over the course of the year. Our physician contracts expressly and clearly provide that the payment of this withhold is at the sole discretion of the CDPHP Board of Directors and is based on a number of factors, including the financial condition of the health plan.
Why Does CDPHP have a withhold?
As a community-based, local health plan formed by physicians, the withhold has been part of our physician contracts from our inception. It was developed as a means for our physician partners to share in the risk of the health plan. Like many other not-for-profit HMOs, it was also utilized as one tool to ensure that CDPHP maintains its tax-exempt status.
Has CDPHP always paid the physician withhold?
CDPHP has paid the withhold nearly every year. There was one other year in which only a portion of the withhold was paid to physicians. In addition, beginning in 2023, as a result of the unprecedented financial challenges faced by the health plan, payment of the physician withhold was less certain. Indeed, in 2024, physicians were notified that the 2023 withhold would be delayed and full payment would only be made if financial performance improved. Physicians were notified that the CDPHP financial performance continued to deteriorate. Nevertheless, at the end of 2024 the Board of Directors felt it was appropriate to pay the entire 2023 withhold.
When faced with continued financial challenges, the Board decided that payment of the 2024 withhold was not prudent. Please know that we did not arrive at this decision lightly as we understand the impact it has on you, your team, and your practice. We continue to value our partnership and unique relationship.
As we look ahead to the future, CDPHP is working with our partners in government – as well as other not-for-profit health plans – pushing for a legislative or regulatory fix to the Medicare wage index. We also continue to focus on process improvements and operational efficiencies to help manage costs and put resources where they matter most – delivering value to our members, employer groups, and provider partners.
Thank you for your continued trust in CDPHP.
If you have any questions, please contact your provider relations representative or call (518) 641-3500 or 1-800-926-7526 Monday – Friday, 8 a.m. to 5 p.m.