(WXYZ) — University of Michigan Health says they have set a June 30, 2026, deadline to come to a deal with Blue Cross Blue Shield of Michigan on a new reimbursement agreement.
If an agreement is not reached, the health system says the impasse could "result in changes for those insured by certain BCBSM commercial health plans."
U of M Health says, for now, nothing changes for any patients with BCBSM plans. However, if the deadline passes without a deal, it would affect the hospitals and health centers of University of Michigan Health's academic medical center: University Hospital, C.S. Mott Children's Hospital, Von Voigtlander Women's Hospital, D. Dan and Betty Kahn Health Care Pavilion, and Frankel Cardiovascular Center, as well as its associated physicians and outpatient clinics. These renewal talks do not include the hospitals and health centers of UM Health-Sparrow and UM Health-West, nor the physician group U-M Health Partners. Medicare Advantage and Medicaid plans are also not part of the contract negotiations, nor is the University of Michigan Health Plan, which covers employees, faculty, staff, and retirees.
“Our priority is — and always will be — our patients,” said Dr. David Miller, CEO of Michigan Medicine and Executive Vice President for Medical Affairs at the University of Michigan, in a news release. “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.”
U of M Health says Blue Cross Blue Shield is asking for a 30% cut in reimbursement payments, which the health system calls "unsustainable."
Blue Cross says U of M Health is demanding a 44% increase in reimbursements.
“Health insurance premiums go higher when the cost of health care goes higher. With families and employers in Michigan struggling to pay for health insurance, along with other necessities, Blue Cross cannot allow the University of Michigan Health System to raise the cost of its health care services by 44 percent. People and employers need health care to be affordable. A 44 percent increase in payment isn’t affordable,” said Andy Hetzel, VP Corporate Communications, BCBSM, in a news release. “The Michigan Medicine system has notified Blue Cross that our members will be locked out of its system of hospitals, physicians and medical facilities starting July 1, unless we cave in to their demands for a 44 percent increase in payment. Fortunately, this does not affect our Medicare or Medicaid members. We are notifying people of this unfortunate decision and stand ready to help our members find other quality, in-network care. We also stand ready to continue our contract negotiations – and we are committed to finding ways to provide payment to the Michigan Medicine system that is responsible and affordable.”
Blue Cross says under their offer, Michigan Medicine would be paid higher rates than they are under their current contract. Michigan Medicine says they are not demanding a 44% increase, contrary to what BCBSM says, and that the current contract offer represents a 30% cut.
According to Blue Cross, the impasse could affect 300,000 customers.
Michigan Health has set up a website to communicate with patients about the situation.
