In August, CDPHP notified the system that it would begin withholding payments related to the Medicare Wage Index, according to a joint Feb. 6 news release. The withholding was related to a new federal rule that increased Medicare payments to hospitals without a corresponding increase in Medicare Advantage payments received by CDPHP and other payers. CDPHP said the new rule created a “new, unfunded mandate for small, regional health plans.”
Albany Med sued the payer in October, alleging CDPHP shortchanged 16,225 claims and was continuing to do so. By December, CDPHP had withheld $30 million in payments related to the wage index, according to the release.
As part of the agreement, the system is dropping its lawsuit against the insurer, and CDPHP will pay the system for the withheld amounts.
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