Hospital, health insurer locked in Medicaid rate dispute

A contract dispute between a Minnesota health insurance company and the state's largest pediatric hospital system could result in the loss of in-network access for about 70,000 patients.

Children's Minnesota, the state's largest pediatric hospital system, said it is ending the contract with Blue Cross and Blue Shield of Minnesota, but will continue to negotiate for higher reimbursement rates before the current contract runs out this summer.

Blue Cross said it pays Children's at rates that are well above market standards, and those rates need to be cut. Children's Minnesota said the amounts Blue Cross pays are already below the cost of providing care, and lowering rates would be financially crippling.

Unless the parties come to an agreement, Children's Minnesota would become an out-of-network provider for Blue Cross patients as soon as July 5. Patients could still go to the pediatric hospital in an emergency, but likely would pay much higher rates for scheduled health care.