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Blue Cross embroiled in contract disputes in hospital

When two companies collaborate in business together, they usually will operate under some form of written agreement. One of the most common types of business contracts in Michigan and elsewhere is a provider or service agreement. However, like any other type of understanding, these written agreements can be vulnerable to contract disputes . This is what is happening with Northwest Health System (NHS) and Blue Cross & Blue Shield (BCBS).

NHS currently has a provider agreement in place with BCBS; however, it is now threatening to terminate this agreement. The conflict stems from a disagreement regarding rate increases and reductions in reimbursements. The companies have been discussing the rate increases for eight months and have yet to come to a consensus. NHS claims that it is seeking "reasonable rate increases," rather than the increases that BCBS says it plans to impose.

NHS has contacted local employers in order to inform them of the ongoing contract dispute, which could affect their employees' ability to redeem health benefits. NHS also says it is concerned with a new payment method which BCBS plans to implement at the beginning of next year. NHS fears that the new payment method will result in reduced reimbursements.

When negotiating contract disputes, it is a good idea to be knowledgeable of applicable Michigan contract law. In some cases it may even be necessary to obtain an impartial third-party mediator in an attempt to find common ground. However, many times a consensus cannot be found. In the worst case scenario litigation may be necessary.

When negotiating contract disputes, it is a good idea to be knowledgeable of applicable Michigan contract law. In some cases, it may even be necessary to obtain an impartial third party mediator in an attempt to find common ground. However, many times a consensus cannot be found. What that occurs, litigation may be necessary to achieve one's goals.

Source: ArkansasBusiness.com, " Northwest Health System In Contract Dispute With Insurer ," Rob Keys, Aug. 2, 2012

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