Strategic Shift for PHS: Ceasing Medicare Advantage Services

Presbyterian Healthcare Services (PHS) has announced its decision to cease offering health services to 30,000 Medicare Advantage beneficiaries starting next year. This strategic move follows a reported financial loss exceeding $568 million in 2025, prompting the layoff of approximately 150 staff members. Dr. Rishi Sikka, President and CEO of PHS, conveyed that these actions are part of efforts to sustain long-term expansion for other patient groups.

The PHS announcement comes amid challenges highlighted by Fitch Ratings, which recently downgraded the organization's ratings due to persistent financial losses. Fitch noted that while PHS has presented a plan for financial recovery, the potential for continued operational deficits remains into 2026. These developments underline the complex landscape of payer structures and financial risk management within the health sector.

As of early 2026, nearly 240,000 Medicare beneficiaries in New Mexico were enrolled in Medicare Advantage plans, with approximately 60,000 of them being members of PHS. Medicare Advantage serves as a private coverage alternative for seniors under Medicare. Impacted patients must secure new coverage for 2027, though benefits for 2026 remain unchanged. PHS has faced critical financial and strategic shifts recently, including a canceled $11 billion merger and a leadership transition with Dr. Sikka succeeding former CEO Dale Maxwell. Serving through seven hospitals and a network of clinics across New Mexico, PHS continues to navigate the evolving healthcare landscape.