Phoenix Children's is out of network with Blue Cross Blue Shield of Arizona as of Oct. 31.
BCBS Medicaid plans are not affected by the negotiations, according to Phoenix Children's.
In a statement on its website, BCBS Arizona claimed Phoenix Children's turned down an $80 million increase in payments over three years.
"To avoid disruption for our members, AZ Blue agreed to Phoenix Children's financial demands. Phoenix Children's still said no and turned down an $80 million raise," the company said. "While we are hopeful that they will reconsider their decision, at this point, your family is our top priority."
In a statement to ABC affiliate KNXV, Phoenix Children's said the raise was closer to $43 million when accounting for several factors, including wrongful denials.
Phoenix Children's also told the news outlet a contract agreement seems unlikely in the near term.
"As with previous contract discussions — where we have successfully fought for our patients — Phoenix Children's is focused on ensuring payer agreements put kids first and address the specialized nature of pediatric healthcare," the hospital said in its statement.
Phoenix Children's has gone out of network with other major insurers in recent years. In August 2023, the provider split with Aetna. The two sides reached a new agreement in October 2023.
The health system warned it could split with Cigna and UnitedHealthcare in 2023, but reached agreements before the previous contracts expired.
Phoenix Children's operates a 533-bed children's hospital and several outpatient clinics, urgent care centers and other locations.
Public disputes between payers and providers are becoming more common, according to data from FTI consulting. In the third quarter of 2024, there were 37 disputes covered by media outlets, the highest number since the first quarter of 2022.
Of the 37 disputes, 12 failed to reach a timely agreement according to FTI consulting.