Horizon Blue Cross Blue Shield of New Jersey has prevailed in a legal challenge from providers that claimed the insurer established an arbitrary tiered network that left some hospitals unfairly relegated to a lower tier.
The ruling, issued by the Superior Court of New Jersey Appellate Division, affirmed a decision by the New Jersey Department of Banking and Insurance to approve Horizon's tiered plans known as Omnia. The insurer debuted its Omnia plans last year and was immediately met with resistance from hospitals. They also claimed the state acted "arbitrarily, capriciously and unreasonably" in approving the Omnia network.
Still, a panel of three judges ruled that the state's decision to approve Omnia adhered to the "current statutes and regulations applicable to its review," and any changes to how tiered benefit networks operate should be addressed by the legislature.
An attorney for the hospitals that challenged the state's decision told the Asbury Park Press that they would "weigh their legal options in the coming days."
Horizon BCBSNJ CEO Bob Marino previously told FireceHealthPayer that Omnia was derived from market research that showed consumers were being "crushed" by healthcare costs, and that the insurer primarily used objective clinical quality metrics to select tier 1 providers.
Documents obtained through the discovery process in another lawsuit against Horizon indicated that six hospitals were designated to tier 2 even though they met the quality standards for tier 1, according to the plaintiffs' lawyer. However, one of the hospitals involved in that lawsuit, Trinitas Regional Medical Center, told NJBIZ.com it was dropping out of the suit after announcing a new value-based partnership with Horizon that will target patients with congestive heart failure.