Standoff between Michigan Medicine and Blue Cross Blue Shield of Michigan threatening coverage

(FOX 2) - With a major health insurance provider on one side and a large hospital system on the other, and hundreds of thousands of patients caught in the middle, a standoff over negotiations is threatening coverage all around Michigan.

Contract negotiations between Blue Cross Blue Shield of Michigan and Michigan Medicine have been underway for more than a year. 

But with a deal nowhere in sight, the deadline is fast approaching before harder decisions must be made.

Big picture view:

June 30 is the deadline for the hospital and insurance provider to reach an agreement on their next contract.

But without a deal, coverage would be impacted for thousands of patients. The big issue is money. Michigan Medicine is saying they've been consistent in asking for a fair and sustainable contract, and that while industry has been roiled by changes over the years, their pay isn't one of them.

Meanwhile, Blue Cross Blue Shield of Michigan says access for patients needs to be affordable. 

What they're saying:

FOX 2 spoke to both parties about the angle they are coming from.

From Michigan Medicine's angle, they need a contract that reflects the growing cost of care.

"Our cost here at Michigan medicine has increased 30% or more — 45% if you look at our drug costs since the pre-pandemic times — and our payment rates have not increased significantly over that period of time so for us to continue to deliver a high caliber of care (and) support our teams, we need our contract to reflect that," said Scott Flanders, chief clinical strategy officer at Michigan Medicine.

But ask BCBSM and they say "Michigan Medicine's position is too expensive." 

"They want too much money, which is why we’re having this extended negotiation that is now into May leading into the next couple months and we’re working very hard to resolve that difference that we have with Michigan Medicine," said Andy Hetzel, vice president of communications at BCBSM. "Michigan Medicine historically has been great partners with Blue Cross and Blue Shield of Michigan. They’re valued institution. We certainly respect their doctors, nurses and staff, but we need what we pay them to be affordable."

What's at stake:

More than 200,000 patients could see their coverage impacted by the standoff.

Amid fears a deal is not reached, Blue Cross Blue Shield of Michigan is in the process of notifying members that as of July 1, they may need to explore care options with other physicians and networks.

In a notice sent from Michigan Medicine to customers, as of May 6, nothing has changed for customers. But that may not be the case after June 30.

"If we do not reach an agreement ahead of the deadline, Michigan Medicine physicians, hospitals and services would be removed from the Blue Cross network, but Blue Cross is legally required under the No Surprises Act to provide extended in-network access for patients with certain chronic or serious conditions even if our contract ends," read part of their email.

Examples of coverage options range from:

• Pregnancy
• Serious or complex conditions like cancer, where treatment is ongoing
• Transplant candidates or recipients in need of ongoing care due to complications
• Recent or scheduled non-elective surgeries, including postoperative care
• Serious acute or chronic conditions in active treatment (e.g., heart attacks or strokes)
• Acute conditions that are serious enough to require specialized medical treatment to avoid the reasonable possibility of death or permanent harm
• Certain behavioral health treatments
• Chronic conditions that are life-threatening, degenerative, potentially disabling, or congenital and require specialized medical care over a prolonged period of time
• Terminal illness requiring ongoing care