New York State and the Civil Service Employees Association (CSEA) have reached a new five-year collective bargaining agreement. Among its provisions is a significant reduction in how the Empire Plan reimburses out-of-network healthcare providers. Health care organizations that serve Empire Plan members – particularly those operating out-of-network – should take immediate note.
Key Highlights
- Effective Date: The new out-of-network reimbursement rates take effect January 1, 2027.
- Reimbursement Reduction: Out-of-network medical and mental health providers will be reimbursed at 150% of the standard Medicare Physician Fee Schedule, down sharply from the current rate of 275%.
- Stated Purpose: The reduction is designed to discourage out-of-network billing and incentivize medical providers to join the Empire Plan’s in-network panel.
- Contract Duration: The agreement covers a five-year term.
What This Means for Out-of-Network Providers
- Revenue Impact: Providers currently billing the Empire Plan on an out-of-network basis should expect a substantial decrease in reimbursement – nearly a 45% reduction from the prior benchmark. This will have a material impact on revenue for practices with significant Empire Plan patient volume.
- Network Participation Decisions: Providers may need to reassess whether to seek in-network status with the Empire Plan, weighing the trade-offs of lower out-of-network payments against the administrative requirements and fee schedules of in-network participation.
- No Surprises Act and Federal IDR: Out-of-network providers using the federal IDR process to challenge Empire Plan reimbursement should review how these changes interact with Governor Hochul’s recent amendments to New York’s Surprise Billing Law. Effective August 26, 2026, certain payment disputes involving the Empire Plan will be subject to New York State’s IDR process and a limitation on payment to prevailing out-of-network providers.
Garfunkel Wild’s Health Care Practice and Physician Law Group is available to assist clients in evaluating the impact of these changes and developing responsive strategies. Should you have any questions regarding the above, please contact the author, the Garfunkel Wild attorney with whom you regularly work, or contact us at [email protected].