Legal Question in Business Law in Michigan

Re: contract Null and Void

I doubt there is anything to prevent the health system from performing an audit on previously expired contracts - audits are a routine function of all businesses, as well as the government. Certainly, an issue might arise if the health system determines that there was an overpayment and then attempts to set-off such an overpayment against amounts owed under the new contract. The first thing that you need to do is carefully review the new and old contracts and see if there is any provision that allows for payments (under current or future contracts) to be offset or reduced by amounts that the health system determines were overpayments. This will not necessarily justify the health system's actions or ratify the amounts it claims are owed, but it does suggest that your husband was aware of the possibility that such an event might occur. Regardless, I believe that your husband has a right to challenge the health system's computation of any alleged overpayment and the manner in which those overpayments are recovered. It would be my position that, absent a provision in the new contract or old contract that allows for a set-off, the health system should not be able to reduce payments under the new contract without permission or a court judgment. Practically, however, this might not be how things play out. It seems that the health system might act arbitrarily and your husband is now stuck holding a much smaller bag. In that event, your recourse is to file suit against the health system to determine whether the overpayment is accurate and the extent to which current payments can be reduced. You would also request a temporary restraining order/preliminary injunction to prevent any deductions from your husband's current compensation until the case is resolved. I would also fully expect that your husband be reimbursed for taxes paid on any amounts recovered by the health system, as well as incidental costs incurred because of the health system's failure to properly compute payments. There is certainly a great deal more that might occur, but I believe this will give a pretty good thumbnail sketch. Feel free to contact us if you need additional help. Good luck.