MINNEAPOLIS - A Minnesota health insurance company and the state's largest pediatric hospital system failed to meet a deadline for a new contract, which could result higher rates for about 66,000 patients.

Children's Minnesota and Eagan-based Blue Cross and Blue Shield of Minnesota (BCBS) could not make a deal before the July 5 deadline, making Children's Minnesota an out-of-network provider for Blue Cross patients.

"We find it disappointing that Children's would choose to walk away from our network instead of working with us collaboratively to negotiate a new agreement," said Garrett Black, senior vice president of health services at Blue Cross, in a statement.

“Blue Cross gave Children’s an impossible ultimatum, knowingly threatening our ability to care for the kids and families that rely on us every day and the vitality of our organization,” said Bob Bonar, CEO at Children’s Minnesota, in a statement. “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.”

Other pediatric specialty care providers in the Twin Cities, like Shriners in Minneapolis, have said they're willing to take on displaced Blue Cross customers as in-network patients. The University of Minnesota and Gillette Children's Hospital could also absorb some of Children's BCBS patients.