The 11th-hour agreement ends months of uncertainty for tens of thousands of Blue Cross members who might have had to change doctors and hospitals.
A day before their contract was due to expire, Blue Cross and Blue Shield of Minnesota and Fairview Health Services pulled back from the brink and signed an agreement that runs through 2009.
The new contract ends a month of uncertainty for tens of thousands of Blue Cross members who had been told they might soon have to find doctors outside of Fairview or pay higher out-of-network charges.
The old contract ends today for Fairview clinics and on Oct. 28 for Fairview hospitals.
"We had many good and useful discussions that helped us develop a mutually acceptable contract," said Mark Eustis, Fairview president and chief executive.
As is usually the case, contract negotiations had stumbled over prices. Blue Cross said Fairview was asking for rates that were higher than those of other providers. Fairview said it sought the same prices being paid by other major insurers.
Both sides claimed partial victory Thursday.
Eustis said the new contract would allow Fairview to "make appropriate investments so we can continue to provide exceptional patient care and service."
Colleen Reitan, Blue Cross president and chief operating officer, said the insurer had "made progress in keeping health care more affordable."
Blue Cross is the state's biggest health insurer, with 2.9 million members. Fairview is the third-largest clinic and hospital group and owns the University of Minnesota Medical Center, Fairview.
Blue Cross estimated that 30,000 to 50,000 of its members went to a Fairview Clinic in the last 12 months.
For most healthy people, the task of finding a new doctor in a state full of good ones is a minor inconvenience. But for those with chronic or rare conditions, finding a new doctor they like can be a full-scale endeavor.
Carol Miletti of Mound has primary immune deficiency disorder, commonly known as "boy in the bubble" disease. She sees a primary care doctor at University of Minnesota Medical Center, Fairview at the university's main campus.
Miletti, 59, infuses herself daily with plasma that provides antibodies to help fight common infections. Her doctor coordinates her care with more than 10 specialists, including an endocrinologist, a rheumatologist, a gastroenterologist, a hematologist, a pulmonologist and an ophthalmologist.
When Miletti heard Fairview might no longer be part of the Blue Cross network, she moved up tests she had scheduled for October to mid-August, including a mammogram, a gynecological exam and a bone density scan. As contract talks dragged on, Blue Cross assigned her a case manager and gave her a three-month extension on care at Fairview.
Told Thursday there was a new contract, Miletti said she was so happy she "had chills."
"I'm immensely relieved that I don't have to turn my life upside down to re-establish care elsewhere," she said.