Horizon Blue Cross Blue Shield of New Jersey — the state's largest insurer — on is defending its new Omnia Health Alliance while lawmakers probe criteria it used to select which providers can participate in the network, according to a Philly.com report.
Horizon BCBS last month announced the formation of the alliance, which intends to lower costs for consumers with six hospital systems (representing 22 hospitals) and a multispecialty physician group.
By choosing from these health systems, as well as an additional eight "Tier 1" hospitals designated by Horizon, patients will have lower out-of-pocket costs on co-payments, deductibles and coinsurance, the insurer says.
Beginning next year, Horizon BCBS intends to sell Omnia plans with monthly premiums 15 percent lower than its standard plans, according to the report.
"Instead of paying for the amount of services provided, our goal is to pay for keeping our members healthy, improving the quality of care, enhancing patient satisfaction and lowering total cost of care," Robert Marino, CEO of Horizon BCBS of New Jersey said during a daylong joint hearing of the Senate Commerce and Health, Human Services and Senior Citizens Committees.
While some lawmakers praised the insurer's efforts to lower healthcare costs for consumers, others question the criteria Horizon used to choose its partners, expressing concern that "Tier 2" hospitals will be disadvantaged, since patients who receive care there will have higher out-of-pocket payments, according to the report.
"People absolutely have the opinion based on what you folks have put out there that Tier 1 hospitals are better, not because of what it costs, but because of the quality of the care," said State Sen. Diane Allen (R-Burlington).
Horizon executives told legislators they analyzed CMS data and hired a consultant to assess criteria, including quality of care, service offerings, consumer preferences and scale of the organization. They did not provide all of the information Horizon used to select partners, saying it was proprietary, according to the report.
Richard P. Miller, Virtua Health System CEO, said in an interview his hospital met Horizon's criteria but was not invited to join the alliance.
"I'm scratching my head about why we've never been asked, because we have the largest geographic coverage in the tri-county area. We're the only hospital in BurlingtonCounty that provides maternity care," said Mr. Miller, according to the report. He added, "I hope this isn't done in some back room where the big hospitals in the state and Horizon got together and said, you know, 'These are the providers we want.' "
Mr. Marino said Horizon projects 250,000 of its 3.8 million customers will choose the new plans in 2016, and an additional 40,000 people who are currently uninsured will be able to afford the Omnia plans, according to the report.