The Albany Med Health System and Capital District Physicians Health Plan have failed to reach an agreement on nearly $50 million in reimbursements, leading the health care provider to warn patients Thursday it "may be forced" to drop CDPHP as an accepted insurance plan in 2025 and potentially have to reduce the scope of its services.

The health system is sending a letter to CDPHP members this month explaining that while negotiations continue and no final decision has been reached, "we must inform you of the possibility that services provided by Albany Medical Center, Columbia Memorial Health, Glens Falls Hospital, and Saratoga Hospital may no longer be in-network for CDPHP members."

At issue, Albany Med says, continues to be CDPHP's witholding of payments associated with the Medicare Wage Index, which the federal government modified last year. The index determines what the federal government pays hospitals for treating Medicare patients. The revision was projected to direct more than $967 million to hospitals across the state.

The Albany Med Health System says CDPHP has failed to fully reimburse Albany Medical Center nearly $50 million on close to 26,000 health care claims since August by an average of up to $2 million per week, and an additional $8 million has been withheld or unpaid since January.

“It is particularly difficult to observe CDPHP knowingly violate its commitment to our hospitals and the patients we serve in a way no other insurance company has,” Albany Med Health System President and CEO Dr. Dennis McKenna said. “The termination of a contract with any insurance company is always a last resort—especially one we have worked with for years. We must consider our long-term viability for the patients who rely on our care.”

CDPHP serves more than 400,000 members in 36 counties in New York.

It said Thursday that discussions with Albany Med are complicated by the fact that CDPHP and its competitors are facing financial hardship due to the Medicare wage index change.

"Unfortunately, federal regulators failed to align private Medicare Advantage premiums with this adjustment, leaving CDPHP with a significant unfunded mandate that will result in nearly $145 million in losses over the next two years," a company statement said.

CDPHP said active discussions were taking place with the Albany Med Health System over a contract renewal for next year, and believed the parties were negotiating in good faith.

“Unfortunately, the leadership of Albany Med has decided to take these negotiations public when both parties had committed to ongoing discussions. In addition to numerous factual inaccuracies in their statement, the actions by the leadership of Albany Med are in direct violation of the confidentiality agreement the parties entered into no more than 10 days ago while trying to amicably resolve this dispute. Their statement today is nothing more than a blatant attempt by a large hospital system to bully CDPHP and unnecessarily alarm our members and their patients," CDPHP President and CEO Brian O’Grady said in a statement.

The health system sued CDPHP, Capital District Physicians’ Healthcare and CDPHP Universal Benefits last month, accusing one of the area's biggest health insurance providers of witholding millions in contractually required payments for medical claims since Aug. 8.

Albany Med said that since that funding is reinvested into patient care services, it presents a significant challenge to services provided.