fbpx

Update Legislation that could halt OMNIA rollout for a year introduced in Senate

Anjalee Khemlani//December 7, 2015//

Update Legislation that could halt OMNIA rollout for a year introduced in Senate

Anjalee Khemlani//December 7, 2015//

Listen to this article

The rollout of Horizon Blue Cross Blue Shield’s controversial tiered plan could be halted for a full year if a measure introduced Monday becomes law.(Editor’s note: This report was updated at 11:20 p.m. with comments from Horizon Blue Cross Blue Shield of New Jersey.)

The rollout of Horizon Blue Cross Blue Shield’s controversial tiered plan could be halted for a full year if a measure introduced Monday becomes law.

State Sens. Joe Vitale and Nia Gill introduced four bills during a Senate session to address concerns with the process of approving tiered networks in the state.

The bills are a direct response to the controversy surrounding Horizon’s OMNIA tiered network product — regarding levels of transparency in creating tiered networks as well as Department of Banking and Insurance regulations.

If they pass as written, they would place a moratorium on the implementation of the OMNIA plan as well as other tiered networks introduced during the 2015 calendar year until Jan. 1, 2017. According to the proposed bill, anyone who already has signed up for these tiered plans would be allowed a special 30-day open enrollment period to switch health plans.

But in order for that to happen, the bills would have to clear a Senate committee, gain the full Senate’s approval, pass into an Assembly health committee, get Assembly approval and then finally hit Gov. Chris Christie’s desk for a signature.

“The tiered plans were established in a way that leaves patients without adequate access to care and health care providers in our most challenged areas vulnerable to closure. It is imperative that we halt implementation until a process is in place that ensures fairness for residents and hospitals in the state,” Vitale (D-Woodbridge) said in a release.

“These bills create a framework for the creation and approval of tiered plans to ensure they meet adequate coverage standards but also that the placement of providers in tiers is based upon measurable criteria.”

Horizon said in a statement: “Any effort to deny thousands of uninsured New Jersey families their ability to purchase insurance for the first time in their lives during the holiday season is reckless and wrong. 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, consumers and taxpayers. Horizon will continue to move forward — not backward — on addressing the sky-high cost of health care in New Jersey.”

The moratorium is just the first of the four bills in Vitale and Gill’s package.

  • Another bill, modeled after 2007 New York standards, ensures transparency in creating tiered networks, including a disclosure of selection standards, and calls for an appointed oversight monitor to review compliance.

“The process undertaken to create and approve Horizon plans demonstrated a critical need to establish clear standards for tiered plans, which the Department of Banking and Insurance has unfortunately chosen not to appropriately regulate,” said Gill (D-Montclair). “These new requirements would provide that the establishment of Horizon’s plans, and any other tiered plans, is done in an open and transparent process that better protects patients and health care providers across New Jersey.”

Horizon’s Kevin Conlin recently told NJBIZ that the state’s largest insurer has been more transparent that its competitors about selection criteria.

“We are not the only offerers of tiered products in the state. It’s certainly not new science from a national standpoint,” he told NJBIZ. “We have been much more transparent, even before this conversation, on the criteria we used, than any of our competitors.”

  • A third bill addresses some of what critics believe are glaring issues in the DOBI regulations for approval of the tiered networks. It would prohibit the commissioner from issuing conditional approval of network adequacy, and plans could not be approved based on a specialty-by-specialty basis.

During a joint Senate committee hearing in October, DOBI said that Horizon had been two percentage points off of required coverage, and as a result had compromised by offering to cover a certain specialty as Tier 1, but the remainder of services at the same health care facility would remain Tier 2.

Network adequacy rules are supposed to consider geographic service area and access to medical specialists for any network.

After the Oct. 5 hearing, Gill said it was clear DOBI did not fulfill its duties, and the current set of bills addresses that.

“Given DOBI’s approval process, it is evident the department is not capable of and has chosen not to address the newer tiered plans,” she said. “The Legislature now needs to step in to ensure stronger oversight and clearer standards. These bills will better make sure that the health care of our residents does not suffer as a result of a business model that prioritizes profits. They will create standards under which fairness is the priority and access to care the goal.”

  • A final bill requires carriers to report on their website the tiered plan’s documents and actuarial value of the plan, and requires that a state-owned facility like University Hospital automatically be designated as part of the top tier.

“The cost sharing amount associated with the lowest or least preferred tier of the health benefits plan would have to be, at a minimum, actuarially equivalent to the cost sharing associated with a level of coverage for a silver health plan offered in the Health Insurance Marketplace created through the Affordable Care Act. Finally, the bill would require that any tiered network plan include University Hospital, and any other hospital that is designated an instrumentality of the state, in the highest or preferred tier of the network,” according to the statement from the senators.

Vitale said the bills address some of the inadequacies seen in Horizon’s plan.

“As constructed, Horizon’s plans leave consumers vulnerable to a flawed structure that could make care, particularly in emergency situations, cost-prohibitive. It also creates winners and losers among health care providers in the state, leaving hospitals largely in urban areas at risk,” he said.

However, Wardell Sanders, president of the New Jersey Association of Health Plans, expressed concerns about the proposed legislation. He said that, “while a conversation about updating standards for tiered products may be productive, we have initial concerns that the bill package may immediately and unnecessarily reduce the availability of lower-cost health insurance options and reduce consumer and employer choice.”

“We are further concerned that if the moratorium referenced in the press release means that consumers must cancel their current coverage and be forced into another product or to go uninsured — this will cause market disruption and would need to be reviewed for compliance with federal standards for termination of coverage,” Sanders said. “We look forward to working with the sponsors and other stakeholders on addressing the standards that apply to tiered-network products.”