Minneapolis-based Children’s Minnesota has terminated its agreement with Eagan-based Blue Cross and Blue Shield of Minnesota, a decision that could outcome in more than 70,000 sufferers losing in-network access to the services of hospital.
Minneapolis-based Children’s Minnesota claimed that the change will be effective as early as July 5 for all BCBS health policies — involving individual and employer-based commercial policies — unless the parties put a new contract in place. If BCBS of Minnesota decides to extend the organizations’ current contract, the termination date will move to the end of this year.
The hospital stated that the termination is a result of 6 months of failed negotiations over reimbursements through Minnesota’s Medicaid program, Medical Assistance. Todd Ostendorf, CFO of Children’s Minnesota, stated BCBS of Minnesota “is demanding a remarkably large double-digit reduction” in Medicaid payments and “the massive reductions claimed by Blue Cross are unheard of and would be devastating to Children’s and affect care provided to all patients.”
In an interview with the Star Tribune, Eric Hoag, vice president of provider relations at BCBS of Minnesota, claimed that the reduced reimbursements were intended “to bring Children’s in line with what other health systems, and what the market really is [like], on Medicaid payment rates.” He stated that the insurer yet has offered to pay “a premium to Children’s, identifying the unique services that they provide.”
Mr. Ostendorf told that the hospital is “hopeful” the 2 parties can resolve the dispute and reach a new contract that does not interrupt care of patients.
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