Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
November 20, 2015 12:00 AM

New Jersey hospitals challenge state's approval of health plan

Lisa Schencker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Seventeen New Jersey hospitals are challenging the state's approval of a healthcare plan that they say harms them and patients by relegating the hospitals to a lower-tier network.

    The hospitals allege in a brief filed Thursday in state court that the New Jersey Department of Banking and Insurance didn't follow proper procedures for approving Horizon Blue Cross Blue Shield of New Jersey's OMNIA Health Alliance and Health Plan. The department “failed to comply with its own regulations concerning network adequacy and abdicated its responsibility to ensure that the OMNIA Plan was not contrary to the public interest,” according to court documents.

    The hospitals want the department to put the plan on hold pending review of the approval process. If the department refuses, the hospitals will challenge that in court.

    The plan divides hospitals into two tiers, with one cheaper tier for plan members. The 17 hospitals were placed into the more expensive tier, which they argue will prevent plan members from accessing certain services. The hospitals also argue the plan could destabilize the New Jersey hospital system as a whole by endangering the financial health of hospitals in the lower tier, which may lose large numbers of patients.

    “If some of these hospitals that have been pushed into Tier 2 suffer enough economic damage so that they can't survive, you are potentially jeopardizing the access to care for a lot of people, particularly poor and minority groups that live in urban areas,” said Steven Goldman, a partner at Kramer Levin Naftalis & Frankel who is representing the hospitals.

    Horizon spokesman Thomas Rubino responded to the lawsuit in a statement: “New Jersey has some of the highest health care costs in the nation and consumers are demanding relief. It is unfortunate that these lawsuits aim to preserve the high-cost status quo in New Jersey, which is neither sustainable nor acceptable.”

    The state's banking and insurance department declined to comment.

    The hospitals also note in their brief that OMNIA leaves out all but one of the state's Catholic hospitals from the top tier “thus severely limiting the opportunity for healthcare consumers to choose faith-based institutions for care.”

    Goldman said it's possible religious discrimination might be at play, but added that their exclusion likely has more to do with their missions.

    “I'm not saying because they're Catholic hospitals and because they serve the needy they're excluded, what I'm saying is because of that mission and their service to those communities they were apparently not … given the same opportunity to participate in the Tier 1 group,” Goldman said, noting that the excluded hospitals weren't part of big systems. “They were excluded because the driving principle of this program was an exchange of patient volume for lower reimbursements.”

    The hospitals and systems include Capital Health Regional Medical Center; Centrastate Medical Center; Holy Name Medical Center; JFK Medical 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. Some of those systems have several hospitals within them.

    The legal action follows a lawsuit filed against Horizon by St. Peter's University Hospital in New Brunswick over the same issue earlier this month. That hospital claims it was wrongly excluded from the cheaper tier. Horizon's Rubino said in a statement earlier this month; “It is unfortunate St. Peter's, one of our long-standing network hospitals, would choose litigation instead of conversation on how we can work together to provide those we both serve with access to lower cost healthcare.”

    In recent years, insurers have faced a number of lawsuits over so-called narrow networks brought by customers, consumer groups and hospitals. Children's hospitals and cancer hospitals have sometimes been left out of narrow network plans because of their higher costs.

    In California, customers filed a class-action lawsuit last year against Anthem, Blue Shield of California and Cigna for allegedly deceiving customers about participating hospitals and doctors in their networks. Earlier this year, the New York state attorney general's office settled with EmblemHealth, requiring the insurer to cover anesthesiology services that accompany in-network screening colonoscopies.

    States, such as New Jersey, must decide how to handle issues related to narrow networks, said Mark Garriga, a partner at Butler Snow, who represents providers. Some states have addressed the issue through so-called “any willing provider” laws.

    Insurers have opposed these laws, saying they could reduce their power to negotiate rates and keep premiums down. Garriga, however, said states must decide: “What's best for the population at large, not what's best for Blue Cross but how do we make sure that the average citizen has access to a wider range of providers? That should be the focus.”

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    20160830_Mike_Pykosz_mm0146(1).jpg
    Q&A: Oak Street Health CEO on growth plans after CVS Health deal
    Rapid growth predicted for hospital-at-home market
    Rapid growth predicted for hospital-at-home market
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing