Presbyterian Health Plan officials took the hot seat Thursday as New Mexico lawmakers demanded answers for the insurer’s choice to discontinue most Medicare Advantage plans and to implement a policy — now reversed — that would have cut reimbursement rates for speech, physical and occupational therapy services.
Rep. Patricia Roybal Caballero, an Albuquerque Democrat and advisory member of the Legislative Health and Human Services Committee, called Presbyterian Health Plan’s recent actions symptoms of a “pattern that’s beginning to build” in New Mexico.
“We have a lot of private interests, corporate interests in our state,” she said. “But when the need is great but the money’s not, there’s an exodus.”
Presbyterian Healthcare Services — the overarching organization that includes both its clinical delivery system and its insurance arm — announced plans in early June to lay off more than 100 administrative employees and discontinue most Medicare Advantage plans in 2027.
The plans serve as an alternative to Medicare, often bundling hospital, medical and drug coverage into a single plan.
Before lawmakers, Presbyterian Health Plan Chief Operations Officer John Johnson said the decision to halt Medicare Advantage plans next year was a financial one related to rising medical costs, major regulatory changes and significant administrative complexity.
That’s consistent with broader signs of financial distress within the health system.
It reported an annual operating loss of $568.2 million in a December financial disclosure.
“It was financially unsustainable for us to continue as an organization to stay in Medicare Advantage in the basic plan,” Johnson said.
The plan changes weren’t the only major piece of news to emerge from Presbyterian this month. On June 1, the system’s insurance arm, which covers about 500,000 New Mexicans, implemented a new reimbursement method for certain therapies, including speech language pathology, occupational therapy and physical therapy services, Chief Medical Officer Dr. Ines Vigil told the committee.
After healthcare providers raised concerns about the policy — which they argued would have been financially catastrophic for local practices, resulting in reduced clinical time or closure — Presbyterian Health Plan reversed course. The health insurance provider will no longer impose the rate changes.
Rep. Nicole Chavez, R-Albuquerque, said she was “so thankful” providers alerted lawmakers to the issue as quickly as possible.
“It sounds like we caught the issue because of the provider outreach to us right away,” she said.
Despite being undone, the policy change sets a worrying precedent that could deal a blow to lawmakers’ efforts in recent years to recruit and retain healthcare providers, said Rep. Liz Thomson, D-Albuquerque.
“Our focus has been recruit and retain providers,” she said. “Providers don’t want to stay in an environment where, with the snap of a finger, their rates are cut. … That is not going to help our work toward getting folks to come here and getting folks to stay here.”
