Children's Minnesota terminates contract with Blue Cross and Blue Shield of Minnesota

Wednesday, March 8, 2017 Child Health News
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MINNEAPOLIS, March 8, 2017 /PRNewswire/ -- Children's Minnesota announced today that it

is ending its contract with Blue Cross and Blue Shield of Minnesota and Blue Plus (Blue Cross). The result of the termination is that Children's will become an out-of-network provider for all Blue Cross health plans.
This change will be effective as early as July 5, 2017, or if Blue Cross chooses to extend the current contract, December 31, 2017.

Families considering their health plan options as part of a special enrollment process currently underway for certain Medical Assistance/Medicaid plans may want to be aware that Children's Minnesota will not be an in-network provider for Blue Cross members as soon as July 5, 2017, unless a new agreement is reached.

"We strive always to put children and families first and we understand that potentially disrupting the continuity of care for the children we see runs counter to that," said Bob Bonar, chief executive officer, Children's Minnesota. "Unfortunately, while we have negotiated in good faith with Blue Cross for more than six months, we have not been able to reach an agreement that preserves the level of payment required to offer the full range of services we provide as the region's largest pediatric health care system."

Children insured through Blue Cross accounted for more than 70,000 unique patient visits to Children's Minnesota's hospitals and clinics since 2016.

"The reductions to Medical Assistance/Medicaid reimbursement rates proposed by Blue Cross would be financially crippling for Children's," said Todd Ostendorf, chief financial officer, Children's Minnesota. "Accepting the proposed rates would threaten the viability of Children's Minnesota and unfairly compromise the quality of care our patients and their families have come to expect from us. Unfortunately, the only option we felt we had was to terminate the contract and appeal to Blue Cross for reasonable reimbursement rates."

Blue Cross is demanding an exceptionally large double-digit reduction in payments that Children's receives to provide care for patients insured through Medicaid. On average, Children's currently receives from payers about 70 cents for every dollar of cost actually incurred to provide care for patients insured through Medicaid. "With payment rates that are already well below our cost to provide care, the massive reductions demanded by Blue Cross are unheard of and would be devastating to Children's and impact care provided to all patients," said Ostendorf.

"We recognize the financial pressures and uncertainties that all health care providers and payers are facing. But while the cost of providing care has continued to increase, Blue Cross has not offered us offsetting reimbursement rate increases for Medical Assistance enrollees in recent years," said Ostendorf. "Meanwhile, the magnitude of the reductions Blue Cross has proposed would greatly diminish our ability to serve the children in our community and state."

This termination of the contract will not affect families receiving care at Children's Minnesota until July 5, 2017, or December 31, 2017 if the current contract is extended by Blue Cross. "In light of the special enrollment process currently underway for some Minnesota families covered by Medical Assistance/Medicaid and the uncertainty of our relationship with Blue Cross, we are letting people know that Children's Minnesota may not be an in-network provider for those covered by Blue Cross after our contract ends," said Ostendorf.

Without a contract in place between Blue Cross and Children's, Blue Cross members covered by a Medical Assistance/Medicaid or MinnesotaCare plan will not have insurance coverage for most services provided at Children's Minnesota hospitals and clinics.

Because the current Blue Cross agreement covers both Medical Assistance/Medicaid and Commercial/Employer health plans, families with commercial coverage through Blue Cross will also be affected if a new agreement is not reached.

In the next two weeks, Children's Minnesota will be mailing information to families insured through Blue Cross to make them aware that unless an agreement is reached, Children's Minnesota will not be an in-network provider for Blue Cross members.

For additional information, current Blue Cross customers can contact Blue Cross at the customer service phone number found on the back of their member ID cards.

More information for patients and families and answers to some common questions are available at

Children's also has set up a helpline, 952-992-5400, to answer general questions from patients and families.

About Children's Hospitals and Clinics of MinnesotaChildren's Hospitals and Clinics of Minnesota is the seventh largest pediatric health system in the United States and the only health system in Minnesota to provide care exclusively to children, from before birth through young adulthood. An independent and not-for-profit system since 1924, Children's serves kids throughout the Upper Midwest at two free-standing hospitals, 12 primary and specialty-care clinics and six rehabilitation sites. Children's maintains its longstanding commitment to the community to improve children's health by providing high-quality, family-centered pediatric services and advancing those efforts through research and education. This work is made possible in large part by generous philanthropic and volunteer support from individuals and organizations throughout the state and region. An award-winning health system, Children's is regularly ranked by U.S. News & World Report as a top children's hospital. Please visit


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SOURCE Children’s Minnesota


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