Anthem Blue Cross and Blue Shield in Connecticut confirmed Monday morning that its provider contract with the Connecticut Children's Medical Center has expired.
The two sides have been in contract talks for more than a year but failed to come to an agreement on new terms.
Children's Medical Center is asking for higher reimbursement rates than Anthem is willing to offer. As a result, Anthem customers will be forced to pay higher, out of network rates or be forced to choose a different hospital.
In a statement released Friday, Children's Medical said "tens of thousands of children covered by Anthem," could be impacted by the standstill. They say Anthem is failing to provide adequate rate increases necessary for them "to continue to meet the growing need for its care and services throughout the state."
In its statement, Anthem said its "current payments to the hospital more than cover its costs and allows the hospital to earn a significant profit on the services rendered to Anthem's members."
Anthem also says it has proposed increases over the current payment rates.
In fiscal year 2011, Children's Medical Center's revenues exceeded expenses by more than $15 million. The hospital's total margin was 6.92 percent, making it one of the best performing hospitals in the state. The hospital's operating margin was 2.62 percent.
The termination of the Anthem contracts applies to patient and family services at the Medical Center in Hartford and all of its other locations.
The terminations also apply to the Neonatal Intensive Care Unit at the University of Connecticut Health Center and inpatient pediatric services at Saint Mary's Hospital in Waterbury.