California hospital system, insurer locked in dispute

Disputes between businesses can be all but unavoidable. Every business owner is heavily invested in the success of his or her company; if another party puts that success in jeopardy, it can be crucial to take legal action.

However, it is also of utmost importance that business owners weigh the cost of any legal action with the potential cost to consumers. These costs are not just financial, either. In some cases, a company's image, services and reputation with consumers can be seriously damaged by lawsuits and disputes, so it is essential that business owners seek legal guidance when and if such a dispute arises.

For example, readers may be aware of the dispute between Blue Shield insurance company and the Sutter Health chain of hospitals. According to reports, the two parties have been locked in a fight over the terms of a pending contract. Unless this case is resolved soon, 280,000 people with Blue Shield insurance could lose coverage.

There are two issues that are preventing the two companies from reaching an agreement. The first is the "illegally inflated prices" that Blue Shield has accused Sutter Health of imposing at their hospitals. The cost of care at these facilities is reportedly 30 percent higher than other facilities, which Sutter denies.

The second issue is that Sutter is requesting an arbitration clause in any new contract between the parties. If this goes through, the hospital would be shielded from lawsuits stemming from future disputes. Instead, parties would need to go through arbitration. Blue Shield argues that this is unfairly limiting, while Sutter argues that it is an industry norm.

This case can serve as a good reminder that business disputes can have a far-reaching impact on consumers and businesses alike. In this case, hundreds of thousands of people will be affected by the outcome, whatever it may be. It is also a situation that illustrates the importance and complexities of contract negotiations.

Business owners who may be involved in contract disputes or negotiations would be wise to take steps to protect themselves and their companies. These situations can be highly contentious, and having the support of an attorney who understands the legal options and ramifications of business agreements can be a valuable resource.

Source: LA Times, "Blue Shield in dispute with Sutter Health over costs," Chad Terhune, Jan. 5, 2015

No Comments

Leave a comment
Comment Information
  • NBLSC Board Certified Lawyer Rated By Super Lawyers | Ryan P. Durham Rated By Super Lawyers | Ben Boston
  • Tennessee Association For Justice | Member 2015-2016 American Association For Premier DUI Attorneys The National Trial Lawyers | Top 100 Trial Lawyers
  • American Institute of Family Law Attorneys | 10 best 2015 American Institute of Personal Injury attorneys | 10 best 2016

Schedule a Consultation Today

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Shulman Bastian LLP | Full Service. Business. Lawyers.

Irvine
100 Spectrum Center Drive
Suite 600
Irvine, CA 92618

Map & Directions

Riverside
3550 Vine Street
Suite 210
Riverside, CA 92507

Map & Directions