Horizon's tiered network model: Hospitals, docs at odds over Omnia plan

The drama over Horizon Blue Cross Blue Shield of New Jersey's intention to offer a health plan that features a tiered model of hospitals and doctors continues as providers accuse the insurer of secret negotiations that will place second-tiered hospitals at a disadvantage.

The plan and its payment model have divided New Jersey hospitals, providers and lawmakers and has led to lawsuits, public hearings and a dozen bills, The Wall Street Journal reports. Indeed, Betsy Ryan, president of the New Jersey Hospital Association, told the publication that she can't remember another issue in her history of working in healthcare policy that has generated so much passion and discord.

The Omnia Health Alliance aims to cut healthcare costs and help transition to value-based care by offering lower deductibles, premiums and copays to members who choose Tier 1 providers, Bob Marino, CEO of Horizon BCBSNJ, told FierceHealthPayer last year. Tier 1 includes six value-based health systems, one large physician group and 14 additional Tier 1 hospitals to expand members' geographical access to care. But those who choose one of the 27 Tier 2 providers will have to pay higher out-of-pocket costs.

The problem, according to the Tier 2 providers, is that unlike their Tier 1 competitors, Horizon never negotiated price and quality benchmarks with them, WSJ reports. Opponents said the deals were made in secret and are meant to provide incentives to members to choose large hospital networks instead of independent facilities.

"We applaud lower costs, but we all have to be in the game. We all have to be competitors," Michael Maron, president of Holy Name Medical Center, a Tier 2 facility, told the paper.

Indeed, he says a Horizon analysis indicates the Tier 2 hospitals could lose an average of $1 million each in lost business.

Tier 2 providers have sued the insurer to make public an internal report on how it scored New Jersey hospitals and providers. Judges in two counties ruled the insurer should disclose the information but BCBSNJ is appealing the ruling.

Meanwhile, New Jersey physicians have slammed the insurer for a new policy that requires them to explain to patients enrolled in the plans how much money they can save by using a preferred network of doctors, NJ.com reports.

If they fail to discuss the difference between Tier 1 or Tier 2 doctors and hospitals, they may be subject to termination from the network, according to the article. The publication reportedly obtained a copy of the health insurer's newsletter to providers, which says Garden State doctors must note in the patient's medical record that they had the discussion.

The Medical Society of New Jersey, a physician lobbying group, told NJ.com the directive is a deep concern, particularly if a physician doesn't think a Tier 1 provider is in the patient's best interest.

"It's highly unusual and offensive an insurer will dictate to a physician the contents of their medical records and mandate conversations with patients," Larry Downs, executive director of the lobbying group, told the publication. Doctors, he said, "are not compensated to be insurance counselors."

However, a spokesperson for Horizon told NJ.com that physicians have always been expected to discuss treatment options within their insurance coverage with patients, such as the use of out-of-network providers.

To learn more:
- read the WSJ article
- here's the N.J.com article

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