Blue Cross, Children’s Minnesota Contract Battle Reaching Boiling Point

The standoff continues despite the impending contract deadline.

Credit: WIlliam S. Farrow

MINNEAPOLIS – With a deadline fast approaching, the contract battle between Children’s Minnesota and Blue Cross and Blue Shield of Minnesota is heating up.

Back in March, Children’s announced they would be terminating their contract with Blue Cross after the insurance provider attempted a double-digit reduction in Medicaid rates. According to the Minneapolis St. Paul Business Journal, Blue Cross wanted a 31 percent reduction in rates. Children’s pushed back on the rate change, saying unless they could reach a deal before July 5, 2017, they would be ending their contract with Blue Cross.

Since March, contract negotiations have been rocky. Children’s recently launched a website, Stand Tall For Small, that takes a shot at Blue Cross. Children’s Minnesota says the rate reduction demand would threaten their “long-term viability.”

“Blue Cross is demanding impossible cuts in the rates we are paid to treat the children insured by them, especially those whose families rely on Medicaid,” the website reads. “Accepting Blue Cross’ demand would threaten the long-term viability of Children’s, and would eventually force us to eliminate services and programs that save kids’ lives.”

Blue Cross hit back with a blog post blaming Children’s for the lack of a deal.

“During the last several months, Blue Cross and Blue Shield of Minnesota has made every effort to reach a new contract agreement with Children’s Minnesota. Unfortunately, Children’s continues to stand by their decision to leave our network on July 5, 2017,” the blog post reads. “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.”

If a deal is not reached by next week, Children’s will become an out-of-network provider for Blue Cross patients. The health care provider reports this would put 66,000 patients at risk of significantly higher medical costs in order to continue receiving care at Children’s.

Blue Cross says they “stand ready” to help patients find a new health care provider following the pending contract termination. The insurance provider has been negotiating with other in-network pediatric health care providers, something Children’s believes is “not acceptable.”

Blue Cross recently renewed their contract with Gillette Children’s Specialty Healthcare according to the Star Tribune, however it seems unlikely they will be able to take many patients from Children’s following the potential contract termination. Gillette Children’s is significantly smaller than Children’s Minnesota, and specializes in a different range of services.

“Many of them have tough and challenging healthcare needs that only Children’s Minnesota is uniquely positioned to provide,” Children’s writes on their Stand Tall For Small website. “They don’t need to be forced by an insurance company to travel to another state to get the care their child could receive right here in Minnesota. Specialty care that could be made available if Blue Cross chose to do the right thing.”

Contract battles between health care providers and insurance providers are not uncommon. However, the battle between Children’s and Blue Cross has garnered a unique level of public attention.