New Jersey hospitals take legal action to try to stop Horizon tiered network

Seventeen hospitals in New Jersey have taken legal action this week to stop one of the state's biggest insurers from unveiling a tiered provider network they claim excludes them unfairly. 

The insurers filed suit against the Department of Banking and Insurance, claiming that it failed to act in the public's best interest when the agency approved Horizon Blue Cross Blue Shield of New Jersey's tiered Omnia Health Alliance network, according to The agency approved the plan two weeks after the insurer submitted it. 

Under the plan, there would be 36 hospitals assigned to Tier 1, which would receive the bulk of enrollee business, while those assigned to Tier 2 would treat far fewer patients and therefore receive less business. The 17 hospitals that were assigned to Tier 2 are taking the legal action.

"The entire plan is designed to encourage members to choose Tier 1 hospitals over Tier 2, and is based on projections that patient volumes at Tier 1 hospitals will increase as patients migrate from Tier 2 hospitals," according to the litigation, reported. "A loss of patients with high quality commercial health insurance will likely endanger the financial viability of the Tier 2 hospitals."

Steven Goldman, the attorney who represents the hospitals, told that those Tier 2 hospitals were never told of the criteria behind Horizon's decisionmaking process. "We think a model of quality and low-cost (healthcare) services is a good thing for New Jersey consumers. But a level playing field to approve it was not given here," he told the publication.

The process has drawn the attention of New Jersey lawmakers, who recently asked the Federal Trade Commission to investigate Omnia's construction and selection process to determine if there are any anti-trust issues

But Horizon CEO Bob Marino has said that the Omnia initiative will allow the insurer to provide coverage to enrollees with lower out-of-pocket costs and higher quality of care.

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