MINNEAPOLIS - A dispute over reimbursements has led to the termination of a contract agreement between Children's Minnesota and Blue Cross Blue Shield of Minnesota.

Children's sent out an announcement Wednesday maintaining that the health insurer is demanding a large double-digit reduction in the payments it makes to Children's for patients insured through Medicaid. Children's claims it currently receives on average only 70 cents per dollar of care it provides for those patients, and cannot afford to absorb more of the cost.

Without a contract in place between Blue Cross and Children's, Blue Cross members covered by a Medical Assistance/Medicaid or MinnesotaCare plan will not have insurance coverage for most services provided at Children's Minnesota hospitals and clinics. If a new agreement is not reached Children's will become an out-of-network provider for all Blue Cross health plans on July 5, 2017.

Last year 70,000 unique patient visits to Children's hospitals and clinics were covered by Blue Cross.

"The reductions to Medical Assistance/Medicaid reimbursement rates proposed by Blue Cross would be financially crippling for Children's," said Todd Ostendorf, chief financial officer, Children's Minnesota. "Accepting the proposed rates would threaten the viability of Children's Minnesota and unfairly compromise the quality of care our patients and their families have come to expect from us. Unfortunately, the only option we felt we had was to terminate the contract and appeal to Blue Cross for reasonable reimbursement rates."

In the next two weeks, Children's Minnesota will be mailing information to families insured through Blue Cross to make them aware that unless an agreement is reached, Children's Minnesota will not be an in-network provider for Blue Cross members.

For additional information, current Blue Cross customers can contact Blue Cross at the customer service phone number found on the back of their member ID cards.

Children's also has set up a helpline, 952-992-5400, to answer general questions from patients and families.