Hospitals take next step in fight with state over OMNIA health plan

Eric Strauss//February 18, 2016

Hospitals take next step in fight with state over OMNIA health plan

Eric Strauss//February 18, 2016

A coalition of New Jersey hospitals and health systems said it has filed its first substantive brief in a lawsuit against the state Department of Banking and Insurance over Horizon Blue Cross Blue Shield of New Jersey’s controversial OMNIA Health Plans.The hospitals were designated as “Tier 2” in the new tiered health plan from the state’s largest insurer, as opposed to a “Tier 1” designation that allows for greater savings for patients.

The group is not suing Horizon, however, but challenging the state’s approval of the plan in September 2015.

“We believe that DOBI has not ensured that the OMNIA plan has met network adequacy requirements and is not in the best interest of New Jersey’s health care system,” Steven M. Goldman, an attorney representing the coalition, said in a prepared statement. “The OMNIA plan, as approved, risks the stability and quality of the New Jersey hospital system. The approval of this plan ultimately does not benefit New Jersey residents and, therefore, the decision to approve the plan should be reversed.

“By its own admission, DOBI has stated that no analysis was done to ensure that the insurer’s method of operation is not contrary to the public interest,” Goldman, a former DOBI commissioner, added. “The way in which this plan was approved is even more concerning for the public interest because Horizon is the largest state insurer and many of the Tier 1 hospitals are the largest hospital systems in the state.

“While the concept of low cost/high value plans (is) praiseworthy, the OMNIA plan is not properly designed to achieve that goal. We are confident that the appellate court will agree with our assertions and will reverse the decision of DOBI by putting the public interest ahead of the interest of the state’s largest insurer.”

Horizon spokesman Kevin McArdle responded, criticizing the suit:

“Tiered plans have been offered in New Jersey for five years without any evidence of provider hardship. Lawsuits, billboards and websites aren’t going to lower the cost of health care in New Jersey. Opponents of change continue to ignore a very basic reality: The status quo in New Jersey is not sustainable for our state’s small businesses, families and taxpayers.

“This suit seeks to take choices away from consumers, particularly the tens of thousands of previously uninsured, who want and need affordable health insurance and quality care, and it is reckless and wrong.”

DOBI spokesman Marshall McKnight said that, due to the pending litigation, the department could not comment.

The hospitals and health systems involved in the challenge include:

  • Capital Health System;
  • Centrastate Medical Center;
  • Community Hospital Group;
  • Holy Name Medical Center;
  • JFK Hospital Center;
  • Kennedy Health;
  • Our Lady of Lourdes Health Care Services;
  • St. Francis Medical Center;
  • St. Luke’s Warren Hospital;
  • Trinitas Regional Medical Center;
  • Valley Health System; and
  • Virtua Health.

The case is before the Superior Court of New Jersey’s Appellate Division.

Horizon is also the defendant in two separate lawsuits over OMNIA, and the plaintiff in another.