Michigan Medical's Contract Negotiations With BCBSM Fall Apart

As their July 1st contract deadline approaches, Blue Cross/Blue Shield of Michigan is telling 250,000 Michigan Medicine patients to seek new doctors in other health care systems:

https://www.detroitnews.com/story/business/2026/05/06/blue-cross-tells-250000-michigan-medicine-patients-find-new-doctors/89960599007/

Blue Cross to 250,000 Michigan Medicine patients: Find new doctors
By Summer Ballentine - May 6, 2026

Blue Cross Blue Shield of Michigan says roughly 250,000 patients will face out-of-network charges after next month if a new contract with University of Michigan Health is not reached by June 30.

The health insurer is telling those patients to seek new doctors but also said Wednesday that about 48,000 patients with "certain serious, life-threatening conditions" will continue to get in-network rates at Michigan Medicine centers through Sept. 29 even if the two sides don't reach an agreement.

Blue Cross is contacting patients who pre-qualify for extended coverage.

"Giving these Blue Cross members time to continue their current course of treatment at Michigan Medicine gives them the comfort of working with their current doctors, while also having time to find alternative care arrangements, should we not reach agreement before June 30," Blue Cross spokesperson Andy Hetzel said Wednesday.

The Detroit-based insurer recommended that members who do not qualify for extended coverage find new primary care physicians by June 4 "or one may be assigned to you."

At issue are the terms of a contract between Michigan Medicine and Blue Cross Blue Shield to replace the current six-year deal that expires June 30.

Michigan Medicine has said Blue Cross Blue Shield is seeking a 30% reduction in reimbursement for care at the UM facility, while the insurer previously said the medical system was seeking a 44% price hike over the term of a new contract.

In total, about 300,000 Blue Cross Blue Shield patients who receive services in Ann Arbor and Metro Detroit could be impacted by the dispute.

Medicare and Medicaid members would not be impacted.

Dr. Scott Flanders, Michigan Medicine's chief clinical strategy officer, said Wednesday that the health system is seeking to protect patients in its negotiations with Blue Cross Blue Shield. He encouraged patients to keep their current appointments.

“Because we are hopeful given our continued negotiations, we would ask patients to proceed with scheduling care,” Flanders said.

Blue Cross Blue Shield of Michigan, in a news release, said: "Michigan Medicine is putting patients in the middle of these negotiations."

"Patients should never be put in the middle of negotiations between insurers and providers over payment contracts — it causes anxiety and fear, and it’s not fair to the people we mutually serve," the insurer said in a statement.

Here's a list of some of the services that Blue Cross says it will continue to cover at Michigan Medicine's southeast Michigan locations through Sept. 29 without a contract:

• Illnesses that require specialized treatment to avoid death or permanent damage
• Chronic illnesses and other life-threatening, degenerative, potentially disabling or congenital conditions that require long-term specialized care
• Inpatient treatments
• Nonelective surgeries
• Pregnancy
• Terminal illnesses

An update from The Michigan Daily. No breakthrough yet:

https://www.michigandaily.com/news/administration/michigan-medicine-and-blue-cross-blue-shield-negotiations-continue-to-stall-as-thousands-are-told-to-find-a-new-provider/

Michigan Medicine and Blue Cross Blue Shield negotiations continue to stall as thousands are told to find a new provider
By Alexa Cheaney - May 18, 2026

Detroit-based insurance provider Blue Cross Blue Shield of Michigan has recommended that 250,000 patients receiving care from Michigan Medicine seek an alternate provider. Michigan Medicine informed BCBSM administrators on March 2 that it would be terminating in-network care if a contract agreement could not be reached by June 30.

Select patients with serious or long-term health conditions — such as individuals who are pregnant, have cancer or chronic illnesses requiring active treatment — would qualify for continuity of care if an agreement is not reached. This would allow patients to continue receiving treatment from Michigan Medicine at in-network rates for up to 90 days, as determined by BCBSM.

Negotiations have reached a standstill as neither party can agree on adequate reimbursement rates. Michigan Medicine claims the insurance provider proposed a 30% rate decrease, while BCBSM claims the hospital system asked for a 44% increase in reimbursement rates. Each party denies the other’s claims.

In an interview with The Michigan Daily, Scott Flanders, Michigan Medicine’s chief clinical strategic officer, said Michigan Medicine is asking for a continuation of current rates with the possibility of performance-based increases in compensation.

“​​We are asking for Blue Cross Blue Shield of Michigan to extend our current contract (and) all the terms that we currently have with Blue Cross Blue Shield of Michigan, but also provide the opportunity for us to earn more based on our performance around quality access, patient experience and cost of care,” Flanders said.

In an interview with The Daily, Meghan O’Brien, BCBSM director of corporate affairs, said the insurance provider is aiming to keep Michigan Medicine in-network while increasing affordability.

“(Our main objectives are to) keep the talented doctors, nurses and clinicians at Michigan Medicine in our network for our members, but at the same time really promote affordability,” O’Brien said. “We need any kind of agreement with Michigan Medicine to be affordable for our members.”

Flanders echoed that Michigan Medicine is committed to ensuring affordability, but believes decreasing BCBSM reimbursements could have negative effects on the capabilities and accessibility of Michigan Medicine hospitals.

“(Blue Cross Blue Shield of Michigan) speaks about affordability, and we are firmly committed to working on affordability,” Flanders said. “We have always taken responsibility for thinking about the cost of care, bringing high-quality, cost-effective care to Michiganders … But reducing our payments is not the way we drive affordability.”

Penni Toney, president of United Michigan Medicine Allied Professionals — a union representing members of the health staff who are not registered nurses — told The Daily the hospital system needs to earn back money spent on treating patients to continue providing innovative care.

“If the hospital isn’t able to recruit the money that they spend to take care of patients, they are unable to reimburse their staff,” Toney said. “Lower reimbursement rates means that we may not be able to provide these world-renowned, first-of-its-kind technologies, and that also would impact our patients.”

Toney said she believes Michigan Medicine is currently not sufficiently compensated for the care they provide. ​​

“We take care of the sickest patients in our state and, really, in the surrounding areas,” Toney said. “We are not reimbursed the way we should be reimbursed for the acuity of care that we take care of, and it really does have an effect on the staff and our morale because we care about our patients.”

Not many details, but some kind of deal has been reached:

https://www.cbsnews.com/detroit/news/michigan-medicine-blue-cross-blue-shield-reach-tentative-agreement/

Michigan Medicine, Blue Cross Blue Shield reach tentative agreement; 12 hospitals would remain in-network for members
By Paula Wethington - May 27, 2026

Blue Cross Blue Shield of Michigan and Michigan Medicine have reached a tentative contract agreement, ending a stalemate that threatened to disrupt healthcare coverage for thousands of Michigan residents.

Top executives from the insurance company and the healthcare system based at the University of Michigan announced the pending contract on Tuesday, just over a month before the June 30 end of the previous agreement.

Without the two having a contract in place, patients faced critical decisions on whether to pay much higher "out-of-network" medical costs or change their health care providers. BCBSM had estimated that about 300,000 insurance members and their employers would be affected after the dispute became public.

An "in-network" agreement means the insurance company and provider have agreed on what is considered to be payment in full for the provided services.

Under the proposal, Michigan Medicine's academic medical center and affiliated facilities, clinics and healthcare providers will continue to be considered "in network" in terms of the direct costs to patients. Michigan Medicine has 12 hospitals in the state.

Blue Cross claimed after the dispute went public that it was operating within what its customers are willing to pay, while the hospital system said its hospitals are underpaid for the care and treatment they provide.

The agencies said they will continue meeting to work out details ahead of a June 30 renewal date. Final terms of the contract will not be publicly disclosed.

But the agreement at this point will allow patient coverage to continue as "in-network" services.

"Blue Cross is pleased to reach this long-term agreement with our partners at Michigan Medicine – ensuring continued access to the system's medical care services for our members, while advancing the affordability of their care and coverage," said Tricia A. Keith, President & CEO of BCBSM.

"On behalf of our physicians, nurses and all of our team members, we are grateful to have reached an agreement that ensures continued access for our patients and for Blue Cross members across the state to the world-class care available at Michigan Medicine," said David Miller, M.D., Executive Vice President for Medical Affairs for the University of Michigan and Chief Executive Officer of Michigan Medicine.

BCBS-MI has now dropped the hammer on thousands of counselors. I'm not sure if this correlates to the MI Medical affair, is consequent to it, or merely coincident.

Michigan Mental Health Counselors Association posted two hours ago on Facebook.

https://www.facebook.com/photo?fbid=1525115542872764&set=a.724795912904735

✯ We need your help! ✯
This morning, June 17, 2026 the following joint communication went out to All Michigan Behavioral Health Professionals. Check your email! (Or spam folder.)

Blue Cross Blue Shield of Michigan (BCBSM) has announced changes to its billing policy. Beginning March 1, 2027, providers holding provisional or limited licenses in private practice and school settings will no longer be eligible for reimbursement by BCBSM for incident-to billing. This policy change will affect limited license providers (LLPCs, LLMSWs, LLMFTs, TLLPs, and DLLPs), licensed behavioral health providers and clients.

This outreach is a collaborative effort of the Michigan Mental Health Counselors Association (MMHCA), the National Association of Social Workers – Michigan Chapter (NASW-MI), the Michigan Psychological Association (MPA), and the American Association for Marriage and Family Therapy (AAMFT) to gather information about the impact of BCBSM’s announced changes.

Your input will help us understand the policy's potential impact on client access to care, workforce development, supervision, practice sustainability, and behavioral health services across Michigan. Data will be used to support advocacy efforts, policymaker education, and discussions with relevant stakeholders.

Whether you work in private practice, community mental health, a hospital system, a school, or another setting - and whether you are fully licensed or limited licensed - we need your input.

The stronger the response, the stronger our ability to advocate effectively with BCBSM, policymakers, regulators, and other stakeholders.

Please complete the survey that best fits your role. The links to each survey are in the email you received.
Survey 1: Fully Licensed Providers (LPCs, LMFTs, LMSWs, LLPs and LPs) and Private Practice Owners/Administrators:
Survey 2: Limited Licensed Providers (LLCs/LLPCs, LLMSWs, LLMFTs, TLLPs, and DLLPs):

We are concerned this policy change will also have a major impact on clients. If you wish, please share the client survey with affected clients. This link is also contained in the email you were sent.

Thank you for the work you do and for taking a few minutes to make your voice heard.

Sincerely,
Michigan Mental Health Counselors Association (MMHCA)
Michigan Psychological Association (MPA)
National Association of Social Workers - Michigan Chapter (NASW-MI)
American Association for Marriage and Family Therapy (AAMFT)