A New Jersey appeals court ruled against of group of hospitals Tuesday that alleged state regulators wrongly allowed Horizon Blue Cross and Blue Shield, the state's dominant insurance carrier, to put them in a lower-tier network.
The hospitals had argued that the New Jersey Department of Banking and Insurance “arbitrarily, capriciously and unreasonably” approved Horizon's OMNIA Health Alliance. That plan divides hospitals into two tiers, and patients visiting providers in the first tier would have lower out-of-pocket costs. The 10 hospitals challenging the plan, which were placed into the lower tier, argued that the OMNIA would create inadequate networks that were not in the public's interest.
The court, however, disagreed with the hospitals Tuesday, upholding the department's decision to approve the OMNIA plan.
Steve Goldman, an attorney for the hospitals, said in a statement the hospitals will weigh their legal options in coming days to determine next steps.
"While we are deeply disappointed in the outcome, our clients continue to believe that the Department’s decision to approve the plan was arbitrary, capricious and unreasonable, and will have serious consequences for New Jersey patients and providers,” Goldman said.
Horizon spokesman Kevin McArdle praised the decision in a statement.
“This decision is another win for consumers seeking relief from skyrocketing medical bills,” McArdle said. “Healthcare costs are a problem for New Jersey employers and patients and while some are content to be part of the problem, Horizon is committed to being part of the solution.”
The hospitals had argued that the plan could destabilize the state's health system as a whole by endangering the financial health of hospitals in the lower tier, which could lose patients. The hospitals also noted in court documents that OMNIA left 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.”
The hospitals and systems that filed the lawsuit are: 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.