Contract Disputes Between Hospitals and Insurers Impact Patients

In recent months, there has been a noticeable increase in contract disputes between hospital systems and health insurance companies, leaving patients in a tough position.

In South Florida, unresolved contract issues have resulted in state-run warnings for tens of thousands of residents. Insurance companies are notifying local hospitals and doctors that their networks might be deactivated if an agreement isn’t reached soon. The stakes are high: without a deal, patients risk losing access to their doctors or facing hefty medical bills.

These conflicts can escalate quickly. In Broward County, for instance, the negotiation breakdown between Broward Health and Florida Blue led to the latter’s network losing various hospitals, emergency rooms, and physicians, affecting around 18,000 members.

“The hospital understands how detrimental this is for patients, yet they feel cornered. They don’t want to halt care, but when negotiations break down, it becomes necessary,” a source mentioned.

Hospitals argue they need higher reimbursement rates due to rising costs for supplies and labor. On the other hand, insurers claim that higher interest rates contribute to more affordable premiums for consumers.

“There’s a lot of finger-pointing,” noted Jamie Godwin, a senior analyst in health policy. “Insurers accuse hospitals of being unreasonable, while hospitals claim the same about the insurers. It’s as if neither side wants to compromise, even though they usually have reasons to reach an agreement.”

Unfortunately, while patients are left out of these negotiations, they will bear the consequences if discussions fall apart.

Take Mitch Hirsch from Parkland, for example. He’s understandably upset about the ongoing contract feud between Florida Blue and Memorial Healthcare System, which has sidelined 31,000 patients from the network.

Hirsch’s wife was recently diagnosed with cancer by a Memorial healthcare doctor. However, since they have a Blue PPO plan, it’s been a struggle to set up an appointment with oncology. The contract with Florida Blue expired on September 1, and as of now, no agreement has been reached.

The website for Memorial Healthcare indicates that until a new contract is finalized, appointments for Florida Blue subscribers will not be honored.

“This is frustrating,” Hirsch shared. “It feels like it’s about finances rather than patient care.”

South Florida has seen its fair share of contract disputes recently, but some have managed to resolve just before deadlines. For instance, in December, Holy Cross Health reached a new agreement with Aetna just a day before the contract expired, averting potential disruptions for policyholders.

This regional issue mirrors a national trend; contract disputes between U.S. healthcare systems and insurers are on the rise. Data from a consulting firm reveals the number of conflicts skyrocketed from 51 in 2022 to 133 in 2024.

With each dispute, patients face uncertainty about their healthcare coverage. Those in active treatments—like cancer or pregnancy—worry their care might suddenly end, placing financial burdens on others who could be facing thousands of dollars in out-of-network costs. Recently, over 31,000 Florida Blue policyholders received notices warning that without a new contract with Memorial Healthcare, they could be left out of the network.

Florida Blue expressed to local media their disappointment over the unresolved partnership with Memorial Healthcare System, recognizing the anxiety it creates for their members.

Securing a new doctor and scheduling an appointment can be a drawn-out process, particularly with specialists.

Patients frequently ask various questions.

Q. Why do health plans send letters about changes in network status outside of open enrollment?

A. Hospitals and insurers don’t necessarily operate on a calendar-year basis. Contracts have specific effective dates, and within one hospital system, there can be multiple expiration dates. Negotiations usually start months before a contract ends, but if a deal can’t be reached, the contract lapses.

Q. What is the notification requirement for patients regarding contract statuses?

A. Regulations require that policyholders in government plans be notified 45 days ahead of contract expiration, while those with commercial plans receive a 30-day notice.

“We really need timely notifications so patients can make informed choices regarding their healthcare,” remarked Stephen Cowhard, a healthcare attorney.

As the deadline looms for the Memorial Healthcare and Florida Blue contract, Bob Pifer of Pembroke Pines is actively seeking updates from both sides. The insurer’s website indicates hopeful progress in negotiations.

Q. What does being out of the network mean for patients?

A. It indicates that your hospital, physician, or specialist no longer has a contractual agreement with your insurer. Consequently, you might face significantly higher out-of-pocket costs and limited coverage for care received from out-of-network providers.

Q. Do hospitals and doctors have to treat patients if they’re willing to pay out-of-pocket?

A. Generally, hospitals and physicians in Florida are not obligated to provide services to out-of-network patients, even if they offer to pay upfront. Providers decide whom they wish to see.

Q. What protections exist for patients undergoing active treatment when providers exit their network?

A. Florida’s continuing care laws may allow patients to receive care for active treatments even after their insurance network changes. Some plans might cover services for limited periods after a provider departs.

Q. What if an emergency arises at an out-of-network hospital?

A. In emergencies, patients can visit any hospital. Federal law ensures that patients aren’t penalized with extra costs during emergencies, regardless of network affiliation.

Q. What if a child from Broward County needs a specialist at a non-profit children’s hospital and Florida Blue is their insurer?

A. Memorial will still see Florida Blue patients, but new specialist appointments will cease after September 1st. Regulations are in place for network validity, requiring sufficient provider access, but how this applies in disputes is uncertain.

“Insurance plans must uphold their commitments, ensuring adequate provider access,” explained Uzdabin, a health law professor. “If they fail to do so, consumers can file complaints.”

Q. If there’s a dispute causing providers to leave the network, can patients change plans as an exception?

A. It varies by the type of insurance plan. Eligibility for changes depends on specific definitions, which can differ significantly.

Broward’s insurance agent, Bernie Sobarbaro, recommends verifying options with your insurance company, reminding patients that private insurance is always a possibility.

Q. If an agreement is reached, is there a chance of future disputes that might affect my coverage again?

A. It’s a possibility, but not guaranteed. Contracts usually average three years, with potential increases over time contributing to future negotiations.

Cowhard noted that while resolutions often come, they may require considerable time and involvement from parties like the state attorney general.