Children's Minnesota now out-of-network for Blue Cross patients

MINNEAPOLIS (KMSP) - Children's Minnesota and major health insurance company Blue Cross and Blue Shield of Minnesota have failed to meet a deadline for a new contract, which could spike the rates of an estimated 66,000 patients. With the July 5 deadline now passed, Children's Minnesota is now an out-of-network provider for Blue Cross patients.

Patients could still go to Children’s for emergency care, but would likely face higher rates for planned health care.

Children’s facilities include the Minneapolis and St. Paul hospitals, Special Care Nursery in Coon Rapids, 12 primary care clinics, all specialty clinics, six rehab sites in the Twin Cities and the Minnetonka Ambulatory Surgical Center and home care services.

“Blue Cross gave Children’s an impossible ultimatum, knowingly threatening our ability to care for the kids and families that rely on us every day and the vitality of our organization,” said a statement from Children’s Minnesota CEO Bob Bonar. “We’re disappointed that Blue Cross has been unwilling to find common ground given the scale and scope of vital pediatric services that we provide in this community.” 

“We know many families value having access to Children’s and are rightfully concerned by this news,” said a statement from Blue Cross senior vice president of health services Garrett Black. “Blue Cross has a long history of negotiating in good faith and working through difficult issues even after the renewal date comes and goes. The vast majority of our negotiations with physicians and hospitals are resolved thoughtfully and reasonably. We find it disappointing that Children’s would choose to walk away from our network instead of working with us collaboratively to negotiate a new agreement.”

Children’s blames Blue Cross for the contract termination, citing the 31 percent cut to Medicaid reimbursement the insurer demanded, and the denial of future rate increases tied to inflation. Children’s said that, on average, they receive about 70 cents for every dollar of cost actually incurred to care for Medicaid patients.

“Accepting Blue Cross’ cut puts our organization at risk and jeopardizes our ability to sustain vital services and programs that provide critical pediatric care to children in the region,” the hospital said in a statement.

Blue Cross said Children’s is one of Minnesota’s most profitable hospital systems, and that Children’s is demanding reimbursement increases that exceed what other in the state have been accepting.

“During the last several months, Blue Cross has made every effort to reach a new contract agreement with Children’s Minnesota on behalf of our members,” Blue Cross SVP Black said. “Unfortunately, Children’s has instead been focused on an expensive marketing campaign asking patients to pressure Blue Cross into allowing Children’s to charge higher prices for their services.” 

Blue Cross has agreed to cover continued treatment at Children’s for eligible patients based on clinical criteria provided by Children’s. More than 4,000 Blue Cross patients are expected to receive continued care at Children’s, with a plan to transition to other pediatric hospitals when it is determined to be medically safe and appropriate.