The Supreme Court of New Jersey declined to review a case this week that alleges state regulators shouldn't have allowed Horizon Blue Cross and Blue Shield to relegate hospitals to a tiered network.
The decision by the higher court deals a blow to the three hospitals part of the suit. It was the latest attempt by the hospitals after a New Jersey appeals court in June ruled against their case, upholding the state's decision to approve the plan.
The hospitals allege in a brief filed in November 2015 that the New Jersey state insurance regulators didn't follow legal mandates when it approved Horizon Blue Cross and Blue Shield of New Jersey's OMNIA Health Alliance and Health Plan.
The Omnia plan divides hospitals into two tiers. Patients with providers in the first tier pay lower out-of-pocket costs. The three hospitals part of the lawsuit, which were placed in the more expensive second tier, claim the plan would financially harm them because they could lose a large number of patients seeking lower individual costs. The hospitals also pointed out in the suit that only one of the state's Catholic hospitals was part of the top tier, "limiting the opportunity for healthcare consumers to choose faith-based institutions for care.”
Initially, 17 hospitals sued the state department, but most dropped their claims. Only Holy Name Medical Center, Valley Health System and CentraState Medical Center remained in the lawsuit.
In a prepared statement, Steven Goldman, an attorney that represented the hospitals, said, “We are disappointed with the Supreme Court's decision to deny our petition. We remain hopeful that the state legislature will swiftly act on pending legislation to ensure that greater fairness and transparency is required in the design of health plans in order to properly protect consumers, lower healthcare costs and avoid potential negative consequences in the healthcare marketplace.”
Horizon CEO Robert Marino commended the court's move. He said in a statement, “The Supreme Court's decision is another win for OMNIA and for consumers seeking relief from skyrocketing medical bills. Healthcare costs are a major 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 state's insurance regulators declined to comment.