Most long-term business relationships depend on contracts and more importantly contract renewals. When two businesses have a partnership that lasts for a long period of time, it doesn’t mean that it is a sure thing, often the relationship depends on short-term contracts and terms that are renegotiated every few years.

The relationship between Blue Shield of California and hospitals in the UC system was recently put on hold after the expiration of a contract on Dec. 31. The two could not agree on how reimbursements for medical costs should be handled. Now, the negotiations have come to a close and the two sides reached an agreement that resulted in a new contract.

The new contract will become effective on Sept. 1 and will bring Ronald Reagan UCLA Medical Center and the Santa Monica-UCLA Medical Center and Orthopaedic Hospital back into the fold of the Blue Shield insurance network. The contract is set to run through June 30, 2015. Other UC hospitals are included under the new contract.

“After more than a year of discussions, we are gratified that the University of California providers worked with us to come to an agreement on rates that will help keep care more affordable for our members,” said the president and chief operating officer of Blue Shield.

This is not the first time that UCLA and Blue Shield officials have not agreed over contract terms. In both the years 2006 and 2008, there were disputes that caused delays in the renegotiation of business contracts.

Source: Los Angeles Times, “Blue Shield, UCLA end long health insurance dispute,” Chad Terhune, Aug. 10, 2012