The Contract Situation of UC-Davis Health System - Article Example

UC-Davis Health System filed a lawsuit against Sacramento County in California claiming the county had failed to pay them $125 million for indigent care services between July 2008 and September 2009. The contract was in effect until September of 2009 according to the lawsuit (Robertson, Kathy). This is a situation where one party is said to have breached the negations of an agreed-upon and binding contract between two parties resulting in legal ramifications. This lawsuit gained media attention when it was made public on November 20th, 2009 (California Healthline).

The lawsuit filed by UC-Davis claims that Sacramento County in California was in breach of their agreed upon contract. The lawsuit is requesting a repayment of indigent care services that have already been provided. Additionally, a court order is being sought to require the county to cover all emergency care for residents who qualify as indigent in the future (California Healthline). The county contracted with a third party called Benefit and Risk Management Services that would provide cheaper services.

It is estimated that by March of 2009 the county had apparently paid claims to the third party worth almost of the full amount of the contract. It was soon after that the county stopped reimbursing UC-Davis for the services that they had already administered. Letters were sent out by Sacramento County to residents that were eligible for indigent services informing them that their contract had been ended with UC-Davis and services received through them would no longer be covered. U-C Davis takes the stance that the County is responsible for the costs of these medical services with or without a contract.

( Robertson, Kathy). According to reports Sacramento County officials have declined to comment on the pending lawsuit. Officials did say that they would plan to continue communications with UC-Davis with attempts to resolve the matter outside of the court systems (California Healthline). It seems that this lawsuit is still fairly fresh and to date, there are no reports of this contract situation being resolved. Negotiations between the County and UC-Davis appear to be occurring in an effort to resolve the matter.

There seems to be a lack of information and understanding of the parameters of the contract between Sacramento county and UC-Davis. The California state law requires that counties assume responsibility for the cost of indigent care ( Robertson, Kathy). Given this law is on the books it appears that the County is responsible for payment of service rendered on behalf in residents they are responsible for providing care for. Better communication between the parties about their expectations and stronger efforts to resolve the issue before it became legal may have prevented the cost of filing a lawsuit.

Regardless of the outcome of this situation it will be a costly one for both parties involved.