Capital Health Drops Out of OMNIA Tiered Network Suit

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Another hospital has dropped out of a lawsuit mounted by several New Jersey hospitals against Horizon Blue Cross Blue Shield. Capital Health joined Trinitas Regional Medical Center and St. Luke’s Warren Campus in withdrawing from the lawsuit over the insurance giant’s new tiered hospital networks, leaving only four complainant hospitals.

The remaining hospitals object to the tiered OMNIA plan, in which ‘Tier 1’ hospitals would offer discounted rates and co-pays and ‘Tier 2’ hospitals would not. Their attorney Steven Goldman said in a statement that he doesn’t believe the hospitals’ decision to leave undermines the others’ case.

“The interests of the hospital group continue to be fully represented by the remaining hospitals and, if successful, the lawsuit will equally benefit all original members of the hospital coalition,” Capital Health’s withdrawal from the suit is unrelated to the merits of the case, but rather involves circumstances unique to Capital Health. We continue to believe that Horizon should be transparent to New Jersey consumers and providers with respect to information that impacts their health care decisions.”

A representative from Horizon also weighed in on Capital Health’s move.

“We are very pleased that Capital has decided to formally end its involvement in the lawsuit,” the insurer said in a statement. “We look forward to continuing on our long history of collaboration with Capital to meet the health care needs of our members.” 

The tiered networks have caused controversy among the public and state lawmakers, with Senators Nia Gill (D-34) and Joe Vitale (D-19) calling on the Attorney General to establish “a permanent oversight mechanism for the process for tiering and rating health care providers in New Jersey” last year.

The Attorney General subsequently said that Horizon had not violated any state laws in structuring its new plans.

Senate President Steve Sweeney has spoken in favor of both the tiered networks and greater transparency between the state and its largest insurer.

“I support requiring insurance companies to disclose the criteria they use in developing tiered products,” Sweeney said in March. “I also support requiring insurance companies to fully educate consumers about their cost share obligations. I don’t believe this type of transparency will hurt any current products, increase cost, or threaten consumer choice.

“[We] can no longer afford a health care system that rewards the number of patients who enter a hospital or doctors’ office — almost like a sports team is rewarded for bringing fans into the stadium. The idea is to keep patients out of the hospital, not to bring them in.”