LANSING, MI (WOWO) About 300,000 patients insured through Blue Cross Blue Shield of Michigan could lose in-network access to care at Michigan Medicine if the two sides fail to reach a new contract before the end of June.
The state’s largest insurer has begun notifying members that the Ann Arbor–based health system could move out of network starting July 1 if negotiations remain stalled. The potential change primarily affects patients in southeast Michigan.
Blue Cross says the dispute centers on the cost of care. The insurer claims Michigan Medicine is seeking a 44 percent increase in payments under a new contract, which the company says would raise health insurance premiums.
Michigan Medicine disputes that claim and says Blue Cross proposed cutting reimbursement by about 30 percent. Hospital leaders say such a reduction would make it difficult to maintain specialized services and patient access.
Michigan Medicine CEO Dr. David Miller said the health system is seeking an agreement that maintains access to care while supporting physicians, nurses and clinical staff.
If the contract expires without a deal, many Blue Cross and Blue Care Network members could need to switch doctors or pay higher out-of-network costs. Patients who qualify for “continuing care” under federal rules could remain in network for up to 90 days after the contract ends.
The dispute affects 16 facilities run by Michigan Medicine, including University Hospital, C.S. Mott Children’s Hospital, the Frankel Cardiovascular Center, the W.K. Kellogg Eye Center and the Rogel Cancer Center.
Hospitals affiliated with the university in other parts of the state, including former Sparrow Health facilities in Lansing and former Metro Health sites in Grand Rapids, are expected to remain in the Blue Cross network.
The standoff comes during a period of broader turbulence in Michigan’s health care system, including rising insurance premiums, hospital consolidation and financial pressure on insurers.
Blue Cross reported a $246 million loss in 2025 and said it paid about $2.6 billion more for medical and pharmacy services than the previous year. Meanwhile, Michigan Medicine reported operating income of about $234 million in its 2025 fiscal year as it expands services across more than 200 outpatient locations.
Details of the negotiations were first reported by the nonprofit news organization Bridge Michigan.
