Albany Med and CDPHP at an impasse over $40 million and 2025 contract negotiations

ALBANY (NEWS10) - Albany Med and CDPHP remain locked in contentious negotiations over $40 million Albany Med says it is owed for services rendered in 2024 and the terms of a 2025 contract that would determine if Albany Med continues to accept CDPHP insurance.

Both sides met last Friday, but no agreement was reached. Albany Med CEO Dr. Dennis McKenna described the situation as ongoing but unresolved.
"I can't get into the details of the meeting yet," McKenna said. "I think that there was dialogue. I also think it's a true statement that there's a bit of a ways to go, and we have not obviously come close to closing the contract yet."

CDPHP CEO Brian O’Grady echoed McKenna’s remarks about the lack of resolution but emphasized that discussions are progressing.
"The meeting took place on Friday," O’Grady said. "And actually, the meeting I just came out of was to review that. We will continue to digest the conversation that happened on Friday and will be making an official response back to Albany Med later this week."

The central issue remains a $40 million payment for care Albany Med provided to CDPHP members in 2024. O’Grady acknowledged the debt, explaining that CDPHP has made a repayment proposal.
"The $40 million is owed to Albany Med by us," O’Grady said. "We've made a proposal to them to reimburse them for that $40 million...they have that paper in their hands."

McKenna, while encouraged by CDPHP’s recognition of the debt, expressed frustration at the delay in payment.
"I'm aware that there are discussions about how the money that could be withheld from us in 2024 will be paid back," McKenna said. "I know we're still working out some of those details, but I’m certainly encouraged to hear them say those words out loud."

The Albany Med CEO went further, calling CDPHP’s withholding of payments "shameful."
"We provided care to CDPHP members in 2024, and they withheld payment to us to the tune of $40 million," McKenna said. "And I also think it's potentially shameful that they’re offering a contract in 2025 that would not even cover the cost of care."

O’Grady countered that CDPHP’s financial constraints stem from an unfunded mandate caused by changes to the Medicare Wage Index, which gave hospitals like Albany Med a financial boost but left insurers without corresponding increases in Medicare Advantage premiums.
"This was an unexpected risk," O’Grady explained. "The wage index adjustment came in August after we had already finalized Medicare Advantage bids in July. It left us unable to adjust benefits or premiums to account for the increased costs. That’s why we refer to it as an unfunded mandate."

He further clarified why smaller insurers have been less affected.
"Medicare Advantage plans in this market—CDPHP makes up a little more than 50% of that market," O’Grady said. "So for us, it’s a $60 to $75 million overall hit. For everybody else, they have between 5 and 10% of the market. So it’s a $5 or $6 million hit for them, which their balance sheets can absorb."

The two CEOs also clashed over Albany Med’s decision to notify patients that the hospital might stop accepting CDPHP insurance in 2025. McKenna defended the move, calling it a moral obligation.
"There are individuals out there that are making decisions about their health insurance for 2025," McKenna said. "I believe it’s an ethical and moral obligation for us to inform the public."

O’Grady criticized the decision, arguing it was unnecessary and counterproductive.
"There’s no obligation by Albany Medical Center to inform the patients," O’Grady said. "Regulators frown upon going public around these disputes. What I’m saying is those public statements and press releases do nothing to advance our conversations to maintain Albany Med as a network provider."

McKenna responded by comparing the situation to previous disputes, such as one with Humana, and noted key differences.
"The situation with CDPHP is completely different because what we had is a breach of a current contract," McKenna said. "And as you have said, Brian O’Grady, the CEO of CDPHP, has affirmed the fact that they know in 2024 there are monies owed to us, as high as $40 million."

Despite the disagreements, both leaders emphasized their willingness to continue discussions.
"I think any relationship can be repaired," McKenna said. "We have a long working relationship with CDPHP."

O’Grady expressed a similar sentiment, underscoring the importance of collaboration.
"Historically, we’ve had a great relationship where we know that they are a valued community partner," O’Grady said. "I hope and feel that they look at us in the same way."

Both sides agreed that more meetings are on the horizon.
"Today is December 2nd," McKenna said. "I’m certain that I’ll be in conversations with Brian O’Grady today or tomorrow. We knew that last Friday would not be the last meeting that we would have."

"We continue to negotiate in good faith," O’Grady added. "What we don’t need are constant appearances in the press and press releases."

While the talks remain unresolved, McKenna assured the public that Albany Med will continue to care for CDPHP members even if a new contract isn’t reached by 2025.
"We’re not going to close our doors," McKenna said. "They can still come into our emergency department, be transferred here from other hospitals, and undergo elective procedures. We are not in any way turning down CDPHP members in 2025."

As negotiations progress, the outcome could impact thousands of patients in the Capital Region. Both organizations remain committed to ensuring access to care while navigating the complex financial and contractual challenges at hand.