Blue Cross Blue Shield cut payments, hospital organization alleges

Blue Cross and Blue Shield of Minnesota is accused of slashing payments to hospitals by the Minnesota Hospital Association.

The organization represents most of Minnesota's hospitals. Lawrence Massa, President and CEO of the association, says Blue Cross will change its payment system for at least a dozen hospitals by May 1 from a negotiated discount to a rate unilaterally set by Blue Cross.

The new reimbursement rates will be below-cost or marginally above-cost, Massa said.

"They have huge market share in greater Minnesota for commercial products, and if there are going to be issues between Blue Cross and rural hospitals it's going to have some access problems for many communities and I don't think that's what either side wants to happen," Massa said.

An emailed statement from Blue Cross and Blue Shield of Minnesota, read the company "strongly disagrees with the statements made by the Minnesota Hospital Association. We have long been involved in conversations with all hospitals on the need to enhance the affordability of care." The statement goes on to say. "Our new payment approach is a less arbitrary and more transparent way to pay hospitals based on the specific needs of the people they treat."