Contract Terminated Between Children's Minnesota, Blue Cross

MINNEAPOLIS (WCCO) -- The deadline for contract negotiations between Children's Minnesota and insurance giant Blue Cross and Blue Shield has passed. After months of negotiations, the contract between both sides has been terminated.

Starting Wednesday, thousands of families will be paying much more for the care they receive there.

In a statement published early Wednesday morning, the insurance company's senior vice president of health services says the vast majority of their "negotiations with physicians and hospitals are resolved thoughtfully and reasonably." They go on to say they "find it disappointing Children's would choose to walk away from our network instead of working with us collaboratively to negotiate a new agreement."

Throughout the course of this dispute, those at the hospital say Blue Cross gave them an impossible ultimatum when it came to these negotiations, claiming they would have to accept double-digit reductions to Medicaid rates, which in turn would cut services.

"We're disappointed that Blue Cross has been unwilling to find common ground given the scale and scope of vital pediatric services that we provide in this community," Children's Minnesota CEO Bob Bonar said.

For its part, the insurance company says they have tried to work with the hospital by putting forth alternative offers that have been continually turned down.

Blue Cross has agreed to continue approved treatments at Children's for more than 4,000 insured patients based on their need for ongoing medical care. Those patients will be transitioned to other hospitals only when it is medically safe and appropriate.

"I was crying all flipping weekend, because I was like, 'What am I going to do? What am I going to do?" said Adair Grommesh, whose son has spina bifida and a complicated 16-year health history.

The Grommesh family has insurance through Blue Cross Blue Shield, and are now learning they will no longer have in-network coverage. Grommesh says it was a hard concept for her son to grasp.

"He said, 'Mom, what happens now? Because all these doctors know me. Now I have to go places where they don't know me,'" she said.

Children's launched a social media campaign called "Stand Tall for Small" pleading on the public to help.

Daniel Zismer, a former professor at the University of Minnesota and an expert in the economics of health care says there is still hope.

"I would expect they'll come to terms," he said. "I would expect the parties will come back to the table. There's a lot at stake here for Blue Cross. There's a lot at stake for Minneapolis Children's."

The Grommesh family is applying to be one of the 4,000 families whose coverage will be extended.