Capital Health System and JFK Medical Center have both exited a lawsuit in New Jersey state court alleging state regulators shouldn't have allowed Horizon Blue Cross and Blue Shield to place them in a lower-tier provider network.
JFK Medical Center confirmed on Wednesday that it had dismissed its claims against the state's top health insurer without prejudice. Capital Health made a similar move on July 8, according to court filings.
“We are very pleased that Capital has decided to formally end its involvement in the lawsuit,” Horizon spokesman Kevin McArdle said. “We look forward to continuing on our long history of collaboration with Capital to meet the healthcare needs of our members.”
Seventeen hospitals initially sued Horizon Blue Cross, arguing the New Jersey Department of Banking and Insurance ignored its own regulations when it approved Horizon Blue Cross and Blue Shield of New Jersey's Omnia Health Alliance and Health Plan.
The insurer's plan divided hospitals into two tiers, and the hospitals in the suit were placed in the more expensive, second tier. The hospitals claimed the tiered system could destabilize New Jersey's health system by jeopardizing the financial health of hospitals in the more expensive tier.
Last month, a New Jersey appeals court ruled against the hospitals and upheld the state regulator's decision to approve the Omnia plan.
Only Holy Name Medical Center, Valley Health System and CentraState Medical Center remain in the lawsuit as others have dropped their claims. None of the hospitals that left the suit have been moved into the less expensive tier 1 of the Omnia plan.
Capital Health and JFK can refile their allegations in court at a later time.
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.