One of Michigan’s major hospital networks and one of its major health insurers are involved in a dispute over patient care reimbursements.
Blue Cross Blue Shield of Michigan has informed customers and members that Michigan Medicine will no longer consider its hospitals, outpatient clinics and doctors to be “in network” providers as of July 1 unless the companies reach an agreement before that date. An “in-network” designation means that a health provider and insurance company have negotiated what is considered to be payment in full for the provided services, according to HealthInsurance.org.
Michigan Medicine notified BCBSM on March 2 of that decision as the two reached a stalemate after several months of contract negotiations over the insurance reimbursements. This is in keeping with a 120-day required notice.
BCBSM says about 300,000 insurance members and their employers would be affected.
The dispute affects those whose medical health insurance is from commercial/private pay plans. Medicare Advantage and Medicaid members would not be affected, nor would the University of Michigan Health Plan for employees and retirees of the university.
BCBSM claims that it has not made a profit in five years and is attempting to deal with what its customers are willing to pay.
“Medical and drug costs have grown faster than we have been able to price our health insurance plans,” the insurance company said.
For its part, the health system says Michigan hospitals are “chronically underpaid” for care and treatments provided, and that BCBSM would still pay less than some other insurers in Michigan even with the proposed increases.
The Michigan Medicine network at the University of Michigan has 12 hospitals and hundreds of clinics across the state. The facilities involved in the insurance contract dispute include C.S. Mott Children’s Hospital, University Hospital, and Von Voigtlander Women’s Hospital.
“We are advocating for an agreement that allows our nurses, physicians and care teams to maintain the high-quality, specialized care patients depend on, while we also ensuring that care is accessible and affordable for patients across the state of Michigan,” said David Miller, M.D., M.P.H., CEO of Michigan Medicine and Executive Vice President for Medical Affairs at the University of Michigan.
In the meantime, the health system suggests that patients who may be affected by changes in the insurance reimbursements contact their employer to state that they wish to keep Michigan Medicine as in-network care under their employee plans.
More from CBS News