Horizon chose tier 1 providers based on size, not quality, hospitals say

Hospitals suing Horizon Blue Cross Blue Shield of New Jersey over its controversial line of tiered network plans say they obtained documents that refute the insurer's claims about how it chose which facilities earned the coveted tier 1 status, according to NJ.com.

Horizon's Omnia plans have faced a slew of criticism since they were introduced last year, resulting in lawsuits from hospitals that were designated as tier 2 and inquiries from state officials, some of whom have begun to explore ways to regulate tiered plans.

Horizon's CEO, however, told FierceHealthPayer that the company chose its tier designations primarily based on factors such as clinical quality and commitment to value-based care, adding that "religious affiliation, tax status or other governance arrangements were not considered via the evaluation criteria."

Yet documents obtained through the discovery process "confirmed some of our suspicions" that six of the hospitals suing Horizon met its safety and quality standards for tier 1--and were still designated as tier 2, their attorney Michael Furey tells NJ.com. Horizon had sought, unsuccessfully, to block the hospitals from obtaining the documents.

Thus, the hospitals argue that Horizon picked the largest hospital chains for tier 1 in order to force more expensive network hospitals to lower their prices. Furey adds that the tier 2 designations have damaged his clients' reputations.

For Horizon's part, spokesman Tom Vincz tells NJ.com that the hospitals' allegations--both new and old--are baseless. "Horizon will continue to fight to lower the cost of healthcare for people who are being crushed by outrageous medical bills," he says.

The insurer has further hit back against its critics by suing two hospitals over their billboard campaign against Omnia.

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