Deal reached between Blue Cross and Children’s Hospitals and Clinics

Children’s Hospitals and Clinics are in-network again for policyholders with Blue Cross and Blue Shield.

The Minnesota-based hospital network and insurance provider reached a deal Friday after the contract was terminated Wednesday following a month’s long payment dispute, Attorney General Lori Swanson announced at a news conference.

Children’s Minnesota became an out-of-network provider for everyone insured by Blue Cross when the deadline for negotiations passed Wednesday without an agreement. Patients face paying more for medical care at out-of-network locations.

Blue Cross had proposed a 31 percent cut to Medicaid reimbursements, which Children’s Minnesota said was an unreasonable reduction it could not accept.

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

Swanson stepped in to mediate between the two parties after the contract ended Wednesday. She said she got involved because she heard from patients and parents concerned about losing care at Children’s Minnesota locations.

“I really want to commend the two CEOs of Children’s and Blue Cross for coming together and doing this in the Minnesota way,” Swanson said at the news conference. “They were just incredibly productive in their conversations.”

The chief operating officers of Children’s Minnesota and Blue Cross announced their new contract was a three-year deal, but declined to comment on the specific terms of the agreement.

The CEOs also did not answer questions about how the new deal would affect prices for policyholders, agreeing only that they are committed to affordable health care.

Children’s Minnesota CEO Bob Bonar called the deal “fair and equitable,” however, and said “both entities are pleased.”

Blue Cross CEO Michael Guyette said the two organizations worked together to make sure “virtually no child” was denied treatment due to Children’s Minnesota’s two-day stint out of the Blue Cross network.

The deal affects an estimated 66,000 patients.