The Albany Med Health System said it had filed suit against three Capital District Physicians Health Plan (CDPHP) businesses on Tuesday, accusing one of the area's biggest health insurance providers of witholding more than $45 million in contractually required payments for medical claims since Aug. 8.

Albany Med names CDPHP, Capital District Physicians’ Healthcare and CDPHP Universal Benefits in the suit, which was filed in Albany County Supreme Court. In a statement released Tuesday, Albany Med warned CDPHP actions pose "a monumental threat to local health care and Albany Med’s ability to sustain its scope and scale of services."

The suit states CDPHP has reduced its weekly remittance payments to the hospital by $2 million a week by treating the reductions as refunds for past overpayments to the hospital. Albany Med said it hasn't recieved any actual evidence from CDPHP of those overpayments.

The suit also states CDPHP did not pay this year's $5 million "Medicare Pre-Payment" to the hospital in January.

In a brief response, a CDPHP spokesperson said, "the reason Albany Med is suing CDPHP is because we are withholding the new and unfunded payments associated with the (Medicaid) wage index." 

The federal government last year modified the Medicare Wage Index, which determines what the federal government pays hospitals for treating Medicare patients. The revision was expected to direct more than $967 million to hospitals across New York state.

Asked if CDPHP was going to pay the money Albany Med claims it owes, the CDPHP spokesperson replied, "Unfortunately, until this issue is resolved by CMS (the Centers for Medicare & Medicaid Services) and adequate funding is provided, CDPHP is unable to make the payments sought by the hospital."

The Albany Med Health System said it's taken legal and regulatory action against CDPHP for insurer shortchanges on 16,225 claims over the last two months. It said it filed the lawsuit for CDPHP's alleged failure to meet terms in its contract after it contacted the state Department of Financial Services on Sept. 16, alleging CDPHP had violated state insurance law.

Albany Med said the hospital has not experienced similar practices with other insurance companies. The hospital will not negotiate next year's contract with CDPHP until it "fulfills its outstanding obligations," Albany Med said.

“CDPHP’s deliberate decisions place the entire landscape of local health care at perilous risk,” Albany Med Health System President and CEO Dr. Dennis McKenna said.