July 5, 2017 (Eagan, Minnesota) – In a decision effective today, Children’s Minnesota (Children’s) has ended its contract with nonprofit insurer Blue Cross and Blue Shield of Minnesota (Blue Cross), leaving members to seek care with other children’s health providers in Minnesota. Children’s chose to terminate its contract with Blue Cross even though they could have continued to treat patients at current rates while negotiating a new contract. Such contracts are designed to ensure providers and insurers can negotiate without affecting patients.
In anticipation of today’s contract expiration, the clinical team at Blue Cross has been working closely with the clinical team at Children’s— as well as other leading pediatric care providers across the state — to manage the transition of care for patients and their families.
“We know many families value having access to Children’s and are rightfully concerned by this news,” said Garrett Black, senior vice president of health services at Blue Cross. “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.”
Driving more affordable care for members is critical to the nonprofit mission of Blue Cross. Children’s is among Minnesota’s most profitable care systems; and Blue Cross says Children’s is demanding increases in reimbursement rates which exceed what other hospitals and physicians in Minnesota have been accepting. Blue Cross has come to the table with many alternative offers and continues to be rebuffed by Children’s.
“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,” said Black. “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.”
Black says Blue Cross offered Children’s a contract with above-market prices for 2017, reflecting the value Children’s provides. “Children’s rejected our contract offers and has continued to push for a substantially higher price increase well above market standards,” said Black.
Throughout this process, Blue Cross has stressed the need for everyone in Minnesota’s health care system to address unsustainable increases in medical costs. Blue Cross is still committed to resolving this negotiation, as it has done with every other provider in its network. For example, Blue Cross recently announced a contract extension through 2020 with Gillette Children’s Specialty Healthcare. The new agreement reflects a commitment by both organizations to make health care more affordable, while creating new opportunities to collaborate and develop innovative approaches to improving the overall quality of care for patients and their families.
While negotiations with Children’s continue, Blue Cross is focused on continued patient care.
“Our clinical leaders at Blue Cross are in regular conversations with our counterparts at Children’s to ensure that every patient has a plan for either ongoing care at Children’s or a safe transition to continued care elsewhere,” said Dr. Glenn Pomerantz, chief medical officer at Blue Cross. “The clinical teams at Blue Cross and Children’s are taking our shared responsibility very seriously. While our organizations may have different perspectives on business matters, we know that people are counting on us to work together and make sure that no one goes without the care that they need.”
Blue Cross has agreed to approve continued treatment at Children’s for eligible Blue Cross members based on clinical criteria that Children’s provided to Blue Cross for ongoing medical care. As a result, more than 4,000 Blue Cross members will continue their care at Children’s. These patients will be transitioned to other pediatric hospitals only when it is medically safe and appropriate.
“We also have been working closely with other pediatric hospitals and care systems in Minnesota and have confirmed they have the capacity and resources to manage the care of patients for any transitioned patients or patients who need care going forward,” said Pomerantz.
Minnesota is fortunate to have hospitals located throughout the Twin Cities and in Greater Minnesota that provide excellent pediatric care. In fact, in June 2017, one of these hospitals, University of Minnesota Masonic Children’s Hospital, was nationally ranked in five specialties by U.S. News and World Report in the annual “Best Hospitals” rankings.
To date, Blue Cross has been in communication with the following in-network free-standing pediatric hospitals, all of which have the clinical abilities and capacity to serve Children’s patients:
- University of Minnesota Children’s Masonic Hospital
- Gillette Children’s Specialty Healthcare
- Mayo Clinic Children’s Center
- Sanford Children’s Hospitals
- Shriners Hospitals for Children
In addition to these pediatric hospitals, more than 1,200 pediatricians and pediatric nurse practitioners remain in the Blue Cross network.
Blue Cross is committed to helping members with this transition. If Blue Cross members have any questions regarding their care or need additional assistance, they are encouraged to call the dedicated Children’s Minnesota phone number at (855)-579-7657, or call the number on the back of their insurance card. Members may also find answers to their questions online at www.bluecrossmn.com.