Blue Cross, Children's MN hospitals reach coverage deal

Updated 1:50 p.m. | Posted 1:17 p.m.

Minnesota's largest individual health insurer and its largest children's hospital system have ended a standoff affecting more than 66,000 patients.

Blue Cross and Blue Shield of Minnesota and Children's Minnesota hospitals had been unable to reach a new contract by Wednesday's deadline, meaning that thousands of patients and their families faced significantly higher costs because Blue Cross would treat Children's hospital operations as out-of-network for health coverage.

Children's had blamed the impasse on Blue Cross demands that the health system said would have resulted in a 31 percent Medicaid reimbursement cut and a stop to inflationary increases. Blue Cross had argued that Children's was already among the state's most profitable and wanted bigger reimbursement increases than other Minnesota hospitals and physicians.

The impasse had thrown families into turmoil as they struggled to figure out next moves for their children and their health care.

On Friday, though, after meeting with Minnesota Attorney General Lori Swanson, Blue Cross and Children's leaders said they'd come to agreement on a three-year deal, although they declined to talk specifics of how this agreement will affect customers.

No other information was immediately available.

"I think where we landed is a fair and equitable contract," said Children's CEO Bob Bonar.

"Both entities are pleased that parents are going to be able to continue to get great care, where their doctor is, where they want to get care," he added. "I think Blue Cross and Children's are peaceful, at peace, with where we landed on the rates and I think that's what's most important so we can make sure we take care of kids and families."