After months of tense negotiations, Blue Cross Blue Shield of Michigan has reached a new long-term contract with Michigan Medicine.
The deal will allow the Ann Arbor medical center and its affiliated physicians, clinics and facilities to keep their in-network status for BCBSM members.
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Michigan Medicine and University of Michigan Health announced in March that despite months of negotiations, BCBSM proposed an unacceptable 30% reduction in reimbursement for the world-class care at Michigan Medicine,” referring to the offer as “unsustainable.”
Earlier in negotiations, BCBSM said Michigan Medicine demanded a 44% increase in payment over the next five years, an increase which Michigan Medicine flatly denied, adding that the healthcare system was seeking either single-digit annual increases or an extension of the current contract that ties any future increases to quality and cost outcomes for patients.
“We have been negotiating this contract in good faith for more than a year,” Julie Ishak, chief nurse and operations executive for Michigan Medicine, told Local 4 in May. “And we are looking for a high-value partnership with Blue Cross.”
Details of the new agreement are still being finalized ahead of the anticipated June 30 renewal date. Final terms of the contract will remain proprietary between the two organizations, according to Michigan Medicine.
Michigan Medicine includes the U-M Medical School and University of Michigan Health, which includes the C.S. Mott Children’s Hospital, Von Voigtlander Women’s Hospital, University Hospital, the Frankel Cardiovascular Center, Kellogg Eye Center, University of Michigan Health-West, University of Michigan-Sparrow and the Rogel Cancer Center.
Medicare Advantage and Medicaid plans and the University of Michigan Health Plan that covers employees, faculty, staff and retirees at the university are not part of the contract negotiations.