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Health insurer drops Children’s Hospitals in Minnesota from network

ST. PAUL -- Children’s Hospitals and Clinics are out of network for patients with Blue Cross and Blue Shield insurance, effective Wednesday.

The Minnesota-based hospital network and insurance provider did not reach a contract agreement by July 5, the deadline for negotiations set after a March dispute.

The disagreement was over Medicaid payment prices, but all Blue Cross policyholders — insured through Medicaid or their employers — are affected.

Minnesotans with Blue Cross insurance now must now go elsewhere for their child's care, or pay the higher out-of-network costs for care at all Children’s locations, including its two hospitals, 12 primary and specialty care clinics and six rehabilitation sites.

Children’s Minnesota said it could not accept Blue Cross’ proposed 31 percent cut to Medicaid reimbursements, arguing it was not sustainable.

“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,” Children’s Minnesota CEO Bob Bonar said in a prepared statement.

Blue Cross argued in a statement that it pays Children’s Minnesota already higher rates, and Children’s has pushed for a “substantially higher price well above market standards.”

“Blue Cross has a long history of negotiating in good faith and working through difficult issues even after the renewal date comes and goes,” said Garrett Black, Blue Cross senior vice president of health services.

“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,” Black added.

More than 4,000 patients receiving treatment at Children’s Minnesota through Blue Cross insurance have been approved to continue care at Children’s until they can move to other pediatric hospitals.

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