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When Can Provider Contracts Be Terminated?

Similar to any legally binding agreement, including healthcare employment contracts, provider contracts have specific conditions and rules dictating how and when they can be terminated. As a healthcare provider, you have already outlined the terms of the agreement to ensure your services are appropriately covered by the payer. However, situations may arise when terminating the contract becomes necessary. Now what?

First and foremost, it is crucial to contact an experienced California healthcare law lawyer to avoid facing a wrongful termination lawsuit. Our Los Angeles healthcare lawyers are well-versed in the intricacies of provider contracts and can guide you in analyzing the considerations and implications associated with termination for your specific case.

Below, you will find more details on when healthcare provider contracts are eligible for termination. The healthcare industry can be complicated, but we are here to clear things up.

What Are Provider Contracts?

A provider contract is a legally binding agreement between a healthcare provider and a payer. Healthcare providers include hospitals, physician groups, clinics, healthcare facilities, and individual practitioners. Payers refer to insurance companies, government programs like Medicare or Medicaid, employers offering health benefits, managed care organizations, or individuals paying out of pocket.

The details laid out in a provider contract typically include but are not limited to the following:

  • Regulatory compliance laws and expectations
  • Rates of services
  • Deadlines for submitting reimbursement claims
  • Timeframes for payers to reimburse providers after the claim is submitted
  • Notice periods for terminating the contract by either party

Provider contracts are the cornerstone of the relationship between healthcare providers and payers. They establish the terms and conditions for providing and reimbursing healthcare services. Provider contracts outline the roles and responsibilities of each party. They ensure patients get the medical care they need and that payers reimburse promptly.

Circumstances Under Which Provider Contracts Can Be Terminated

As a healthcare provider, there are various circumstances under which provider contracts may be terminated.

Breach of Contract

If either party fails to uphold the terms and conditions outlined in the contract, it can result in termination. For example, if the contract requires the reimbursement claims to be submitted within 30 days, but the provider continuously submits them late, it constitutes a breach of contract.


Non-performance, as the term suggests, occurs when one party fails to fulfill its obligations as required by the contract. If a healthcare provider fails to provide services or maintain regulatory compliance as outlined in the agreement, it is considered non-performance. Like breaches of contract, failing to uphold your end of the deal can lead to termination of the contract.

Mutual Agreement

Under certain circumstances, both parties involved in a provider contract may decide on a new course of action. This could mean changing the current agreement to better suit evolving needs. It could also involve extending the contract for a longer period or agreeing to end the contract earlier than the original termination date.

Contact a California Healthcare Attorney Today

If you are facing issues regarding provider contract terminations, we highly suggest working one-on-one with a Los Angeles healthcare lawyer who specializes in this subject. Our healthcare practice offers a team of knowledgeable and experienced attorneys who can guide you through the process and advocate for you on your behalf according to the law. Contact us at (310) 444-5244 or fill out the form on our website today to connect with a healthcare practice attorney.