It’s autumn — the season for football, fall foliage, open enrollment and contractual disputes between health plans and providers. This year is bringing a bumper crop of these contractual impasses. Employers should be aware that one or more of their health plans may struggle to “get to yes” with key provider groups.
Here’s what you should know:
Why do these contractual fights come to light in the fall?
Most contracts between health plans and providers last about three years and often run from January to December. A lot of contracts tend to be settled close to the deadline. In some cases, providers must give between 30–90 days’ notice if they intend to withdraw from a network. Providers also have the most leverage near open enrollment, when publicity about contract fights might prompt patients to switch health plans.
Why are there more of these contractual disputes now than in past years?
Several trends are making these disputes more common: ongoing provider consolidation, high labor and other costs and expected coverage losses. Healthcare systems continue to consolidate, and these large systems have more contractual leverage and seek higher payments. Providers also face large financial headwinds, with as many as 17 million more Americans being uninsured by 2030 after cuts to Medicaid and federal subsidies for the exchange plans. Many provider systems hope to create reserves to help them weather a future decrease in revenues.
A Brown University researcher found that 18% of non-federal hospitals had an episode of public brinksmanship with a health plan from June 2021 to May 2025, and 8% went out of network with at least one insurer during that time.
What happens if a provider network becomes out of network due to a contractual dispute with the medical carrier?
Non-contracted providers can collect their full charges from their patients, which are often twice as high as contractual rates. Balance billing is allowed when a network agreement ends, except for physician services covered by the No Surprises Act. Treating providers can “balance bill” patients for care except that delivered in the emergency department and by hospital-based specialties (radiology, anesthesiology and pathology).
Further, out of network care often invokes separate deductibles and higher cost sharing. A member who continues care with an out-of-network specialist may face thousands in unexpected bills. These extra costs might be paid for by the employer for the first few weeks or months if the plan offers to pay for continuity of care for patients with an existing relationship with a provider.
Do these contractual disagreements usually get resolved?
Yes.
Most contractual disagreements get resolved, generally within weeks to months. Some providers “hold bills” until an agreement is reached to spare members from surprise charges — but not all do, since it delays their payments and weakens leverage.
What should you do to address concerns there could be failed negotiations between health plans and providers?
You can ask your carrier(s) whether they have any outstanding provider negotiations, especially negotiations that they believe could lead to termination. This can help you measure the risk of employee disruption and the risk of unit price increases that can drive medical inflation.
In general, you want to avoid getting engaged in these negotiations. The carriers are seeking to prevent large rate increases, and a tough negotiating stance can help your plan performance. You generally don't want disruption of care, but pressuring plans to settle contractual disputes impairs their ability to negotiate successfully.
You can prepare communication plans and support for affected employees if they believe a contractual impasse is likely. You can also develop policies around maintaining continuity of care for members with significant illnesses and existing relationships.
What should you do if they learn that a provider group will leave an insurer network due to a contractual impasse?
You can let health plan members know their options for in-network care. You can also clearly communicate policies around coverage for out-of-network care for members who are impacted by the contractual dispute. Check on negotiation status with the carrier and plan communications accordingly.
If you have multiple health plan options, offering a special enrollment period may help employees maintain access to preferred providers. However, shifting members between plans reduces a health plan’s negotiating leverage and can make future cost control harder.
You should focus on communication, continuity-of-care policies and support for affected employees rather than intervening directly in negotiations.
Contract disputes between health plans and providers are becoming more common, especially during open enrollment. While most are resolved, you should stay informed, communicate clearly with employees and avoid direct involvement in negotiations that could raise long-term costs.
