A panel of Appellate Division judges voted to allow the state’s largest insurer to keep pages of a highly sought-after report private in two ongoing cases.Horizon Blue Cross Blue Shield of New Jersey will not have to reveal certain portions of a report from the consulting firm McKinsey & Co. that helped structure the controversial OMNIA tiered network plan.
The decision pleased Horizon CEO Robert Marino, who reiterated his stance on the plan.
“The Appellate Court’s ruling is another in a long line of wins for the consumers of New Jersey,” Marino said. “The status quo is simply not sustainable and we should all be working together to address the cost crisis in health care. Horizon’s goal is, and will always be, to provide high quality, affordable health coverage to New Jerseyans who are demanding, and who deserve, nothing less.”
The two cases against Horizon involved a total of six hospitals: St. Peter’s University Hospital in a separate lawsuit, and a coalition of five health care providers including: Capital Health, Holy Name Medical, Valley Health, JFK Health and CentraState.
Lawyers for the hospitals were disappointed by the ruling.
“We were surprised at the decision because we expected the Appellate Division would follow the decisions of two respected, experienced trial judges who had studied the issues and ruled in favor of the Hospitals,” Steve Goldman, a former Department of Banking and Insurance commissioner who represents the coalition, said. “But, we need to remember that Horizon still has to produce the McKinsey Report and the Alliance Agreement template, albeit in redacted form, which it sought to avoid.”
Jeffrey Greenbaum, an attorney for St. Peter’s, said the hospitals were entitled to more than what was granted by the three judges, but it was no surprise that the decision came down the way it did.
Like Goldman, however, he expressed disappointment that the Appellate Division overruled the two trial judges. Greenbaum said he still believes the pages offered are enough to prove his case.
Horizon’s attorney, Michael Kassak, also said the decision was not a surprise, following the previous decision by the same panel of judges in a suit against the Department of Banking and Insurance.
He added this decision should act as a guide for the judges in the lower courts in Middlesex and Bergen counties.
With both cases currently in the discovery phase, attorneys in one have seen the redacted versions, and in the other, the attorneys haven’t. This ruling by the Appellate Division remands the order to produce the redacted pages, which would reveal the fee schedule negotiated by other hospitals with Horizon.
Horizon has repeatedly categorized this information as proprietary and confidential.
The judges’ decision states:
“The agreements clearly state that Horizon is permitted to establish new networks, in which the hospitals may participate if they meet ‘all criteria and standards established and evaluated by Horizon.’ Thus, on its face, the plain language of the agreements does not appear to support the hospitals’ claims that Horizon was required to place them in Tier 1 of the new program, or give them the opportunity to apply for inclusion in that specific tier. As required by the agreements, all of the hospitals involved in this litigation participate in the OMNIA network, albeit as Tier 2 providers.
“The nonexclusivity provisions of … the agreements also gave Horizon the opportunity to enter into new contracts with other hospitals, including competitors of St. Peter’s (University Hospital) and Capital (Health). Thus, the agreements do not require Horizon to treat all hospitals the same in terms of future products.”
The pages in the McKinsey report that have already been produced in discovery of the cases — which define the selection process for Tier 1 — will remain a part of the cases. But any other pages, which would have been redacted — and which Horizon deemed confidential and proprietary — will not be revealed, Kassak said.
All pages in the report remain available only to the lawyers and certain hospital executives, in one trial currently, and will not be available to the public.
Kassak said the plaintiffs in both cases do still have an option to appeal and ask for a Supreme Court review of the appellate decision, but statistics and history point to a slim chance of that being successful.
Greenbaum said the next step is yet to be determined, while Goldman said the hospitals ”intend to appeal,” but also later said they “are looking carefully at whether they should seek review in the Supreme Court and will continue with the depositions of Horizon witnesses and the production of documents from Horizon.”
