Healthfirst sent\u00a0letters notifying policyholders that its association with Catholic Health had ended and that patients must find a new in-network primary care provider by April 30 \u2014 causing consternation from Long Islanders worrying about losing trusted physicians.<\/p>\n
WHAT NEWSDAY FOUNDThe failure of Catholic Health and the insurer Healthfirst to come to an agreement on a new contract is one of a growing number of disputes between health systems and insurers.Rising health care costs are the biggest reason, as health systems seek greater reimbursement for their increased expenses, and insurers want to limit their costs and premium increases.Hospitals, many of which lose money, say they are squeezed by higher labor, supply and other costs, and insurers say they are under pressure from employers to limit premium hikes.<\/p>\n
Catholic Health and Healthfirst declined to say how many Healthfirst policyholders would lose coverage at Catholic Health\u2019s six Long Island hospitals and its outpatient sites on May 15.<\/p>\n
Healthfirst has more than two million New York members, mostly on Long Island and in New York City.\u00a0Healthfirst members who purchased policies through the state\u2019s Affordable Care Act marketplace, along with Medicaid, Essential Plan and Child Health Plus policyholders, are affected. Healthfirst Medicare Advantage policyholders are not.<\/p>\n
Unlike most insurance companies, Healthfirst is nonprofit, and most of its policyholders are eligible for Medicaid or Medicare. Catholic Health also is nonprofit.<\/p>\n
It\u2019s unclear if, as in some past disputes between insurers and hospitals, the two sides may come to an agreement during the cooling-off period. Healthfirst spokeswoman Loren Riegelhaupt said in an email that negotiations began in November, when Catholic Health said it was seeking changes in its contract, and “We remain in discussions with Catholic Health.” But Catholic Health spokeswoman Lisa Greiner said in a statement that “Healthfirst made the decision to end negotiations.”<\/p>\n
Both sides agree that Catholic Health moved to change the contract. Greiner said that was because the previous terms\u00a0were financially unsustainable.<\/p>\n
Healthfirst “demanded significant reimbursement reductions,” Catholic Health officials said in a statement, but Riegelhaupt said that Healthfirst had not proposed changing the terms of the contract, and that Catholic Health broke the contract before it expired to seek a better deal.<\/p>\n
Other disputes<\/p>\n
Anthem and the Mount Sinai Health System<\/a> have still been unable to reach a contract agreement, and that led to more than 20,000 Long Island patients without in-network coverage at Mount Sinai as of March 4. Each side blames the other<\/a> for a lack of agreement,<\/a> but Anthem said in a statement on Tuesday that the insurer and Mount Sinai are meeting this week “and believe an agreement is within reach.”<\/p>\n In other cases on Long Island, agreements were reached either days before contracts were scheduled to expire, such as with Anthem\u2019s last-minute accord with Memorial Sloan Kettering<\/a> Cancer Center in late 2024, or during the cooling-off period,\u00a0such as with UnitedHealthcare and Stony Brook<\/a> Medicine in July 2025.<\/p>\n With health care costs continuing to climb for health systems and insurers, the stakes in the negotiations are higher for both sides, said Bradley Ellis, senior director for the U.S. health insurance sector for the credit rating agency Fitch Ratings.<\/p>\n “One of the reasons we\u2019re seeing more disputes now is that the higher the costs get, the more severe the impact on overall budgets,” he said.<\/p>\n Reimbursements from insurance companies haven\u2019t kept pace with the increased costs health systems face, “so when contracts come up, providers are pushing harder for rate increases,” Gundling said, “and insurers are under equal pressure to hold the line. That naturally leads to more visible disputes.”<\/p>\n Some of that pressure comes from employers that push back on insurance companies\u2019 proposed premium increases, he said.<\/p>\n Health care costs have been rising for years,<\/a> at a level much higher than the overall inflation rate. The cost of medical care rose 121% between 2000 and 2024, according to an analysis of federal data by the health policy nonprofit KFF.<\/p>\n But the financial crunch for health systems and insurers is intensifying, experts said.<\/p>\n The retirement of many doctors, nurses and other health care providers after the height of COVID-19 exacerbated existing shortages and helped lead to increased labor costs, said Kevin Holloran, senior director for the not-for-profit health care sector for Fitch.<\/p>\n New York health care systems\u2019 labor costs\u00a0increased 23% between 2022 and 2025, far above the general inflation rate, according to a November report <\/a>from the Healthcare Association of New York, which represents health systems, hospitals and other institutions.<\/p>\n Drug costs also are up sharply, the report says, and that’s a trend \u2014 driven in part by expensive weight-loss drugs, as well as expensive new treatments such as for sickle cell disease \u2014 that affects health systems and insurers alike, Ellis said.<\/p>\n About half hospitals in New York, all of which are nonprofit, are losing money, the health care association report says.<\/p>\n Hospitals are also losing increasing amounts of money on Medicaid and Medicare recipients, because those reimbursements \u2014 long below costs \u2014 are also not keeping pace, said Wendy Darwell, president and CEO of the Suburban Hospital Alliance of New York State, which represents hospitals on Long Island and in the Hudson Valley.<\/p>\n Hospitals are bracing for Medicaid cutbacks from last year\u2019s “Big Beautiful Bill,” which will lead to more patients without insurance getting care they can’t pay for, she said.<\/p>\n Darwell said area hospitals are reporting that insurance companies are “using much more aggressive tactics” to save money and increase profits, including requiring more prior authorizations for treatment and denying more claims.<\/p>\n “It\u2019s a deny and delay strategy,” she said.<\/p>\n Hospitals, in turn, are spending an increasing amount of money to pay employees to handle denials and other insurance company actions, she said.<\/p>\n
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