Thousands of patients at Children’s Hospitals and Clinics of Minnesota have been asked to make backup plans to see new doctors if they get their health insurance from Blue Cross and Blue Shield of Minnesota. The deadline for the contract is nearing and the dispute between Blue Cross and Children’s Minnesota persists.
Children’s Minnesota, Blue Cross Contract Dispute: Highlights
The Heated Deal
The dispute between Blue Cross and Children’s Minnesota are due to a heated contract. This contract would determine whether the Blue Cross Network would include the hospitals and clinics run by the pediatric health care provider.
Blue Cross Customers Will Not Be Covered If No Deal
If the deal is not reached around 66,000 Children’s Minnesota patients who have Blue Cross insurance would have to face higher medical bills to be treated by doctors who would be out-of-network. Hence people would be forced to search for care elsewhere.
Existing Agreement Due To Expire Soon
The existing network agreement would expire on July 5. The contract negotiations are still running, in March some of the talks had spilled over into public view. This happened when Children’s Minnesota issued a news release announcing its plans to cancel its contract with Blue Cross and Blue Shield effective July 5. The cancellation included commercial Blue Cross plans and Blue Plus plans, which are supported by Minnesota’s Medicaid program, Medical Assistance.
Children’s Minnesota Decision Is “Unilateral” And “Shocking”
- In a blog post this week, Blue Cross said that the hospital’s decision was “unilateral” and “shocking” — the latter as the existing contract had no expiration date. Blue Cross’ Black wrote,
“Children’s could have continued to serve Blue Cross members at existing in-network payment rates indefinitely.”
- According to Black’s post, Children’s Minnesota wanted to increase its charges for both patients on Medicaid and patients under employer-sponsored and individual plans.
- Black also pointed that the insurer has offered “above-market rates” for the Medicaid patients plus a “modest price increase” on employer-sponsored and individual plans.
Black wrote,
“That’s the offer Children’s rejected, putting thousands of Children’s patients at risk of losing access to their doctor.”
Contracts Without Expiration Requires Negotiation
According to an email from Dr. Marc Gorelick, president and chief operating officer of Children’s Minnesota, Blue Cross knows that even contracts without expiration dates need to be renegotiated regularly. Gorelick said,
“Because costs do change and therefore rates need to be adjusted as well.” He added “We were effectively forced out of our contract, driven by Blue Cross’ ultimatum that we accept a 31 percent cut to our Medicaid rates or receive no commercial rate increases indefinitely,” further added “They believe paying 50 cents for a dollar of actual cost incurred to care for sick kids insured through Medicaid is a fair proposition, which is disappointing.”
According to Gorelick, Children’s cares for some of sickest pediatric patients across the state. But it has per-patient operating costs which are 2.5 percent lower than other free-standing children’s hospitals.
Gorelick criticized Blue Cross
Black said that Blue Cross is working meticulously with the hospital on transition-of-care plans for thousands of patients. But Gorelick criticized the insurer for being “unprepared to safely manage the transition of care for many of those who are very sick.”
Date: June 19, 2017