Hospitals suing the state’s largest insurer over a controversial plan they allege unfairly manipulates the market received a green light Friday for a weakened case to move forward.Following a court decision in Middlesex County, where Saint Peter’s University Hospital brought a similar lawsuit against Horizon Blue Cross Blue Shield of New Jersey, Superior Court Judge Robert Contillo ruled that the case originally brought by seven hospitals — now reduced to three — can proceed without an injunction against the OMNIA plan, denying Horizon’s motion to dismiss the whole case.
But Contillo did dismiss several counts.
“Having lost more than half of its plaintiffs, the capital case has now lost half its allegations. The ruling is a win for the hundreds of thousands of people who have chosen OMNIA and a clear rebuke to the remaining three plaintiffs,” Tom Wilson, director of public affairs at Horizon, said. “The hospitals’ case was effectively gutted, and what remains amounts to no more than a garden-variety contract dispute. We will continue to focus on providing high-quality, affordable health insurance that transforms the health care system to one focused on the quality of outcomes and the value of care.”
The remaining hospitals in the suit are CentraState Medical Center, Holy Name Medical Center and Valley Hospital.
And an attorney for the hospitals disputed Horizon’s claim of victory.
“As it has throughout this litigation, Horizon is attempting use its vast public relations resources as a substitute for the evidence of what occurred here,” Michael Furey said. “Horizon’s claim that the court’s decision is a ‘victory’ is nothing more than an effort to spin a rejection of its arguments and avoid the implications of the decision. The hospitals intend to continue to press on and expose what actually occurred to demonstrate that the public is not benefitting from OMNIA.”
Horizon rolled out its OMNIA tiered network plan last year, which divided the hospitals in the state into two categories: Tier 1 and Tier 2. Tier 1 offers lower copay and premium rates to customers and includes mostly suburban hospitals that are part of the state’s largest health systems. Tier 2 includes many independent, urban or safety net hospitals and offers regular in-network rates to consumers.
In creating the plan, Horizon shifts patient volumes away from the Tier 2 hospitals, according to the hospitals and industry experts.
Judge Contillo’s decision was a victory for consumers and the independent hospitals that serve them,” Furey said. “The court ruled that these hospitals have the right to present their proofs that Horizon misled the public about the quality and cost of care provided by Tier 1 hospitals as compared to them, and Horizon violated their contract rights in selecting the Tier 1 hospitals for OMNIA. We have also learned that Horizon had preselected its partner hospitals before the evaluation of hospitals for OMNIA supposedly began, and the scoring protocol was biased in favor of the large hospital systems that Horizon had already preselected.”
In addition to the tiered network, Horizon also announced its OMNIA Alliance — a group of partner hospitals and health systems, including the state’s largest multidisciplinary practice, Summit Medical Group — focused on lowering the cost of care.
Hailed at the time as a paradigm shift in the traditional payer-provider relationship by Horizon, there has since been no additional information. Horizon has not responded to multiple requests by NJBIZ on the status and creation of the alliance and its governing body.
Contillo’s order is the first sign of hope for the hospitals that unsuccessfully brought a suit against the state’s Department of Banking and Insurance for approving the tiered network earlier this year.
Of the original seven hospitals in the suit, Horizon has struck deals with four for value-based payment programs.
The court agreed to hear arguments pertaining to the hospitals’ claims of defamation and breach of contract, and the hospitals anticipate the network case will go to trial.
“Finally, the court’s decision means that a trial is likely and, as a result, the secrecy Horizon has maintained surrounding the selection process will finally be removed,” Furey said. “The hospitals are confident that, ultimately, the public will learn the truth about OMNIA, and that the court will rule in favor of the hospitals.”