17 NJ hospitals sue state over Horizon BCBS tiered health plans

Seventeen New Jersey hospitals will file an appeal challenging Gov. Chris Christie's (R) administration's approval of a new set of discounted health plans by the state's largest health insurer, Horizon Blue Cross Blue Shield of New Jersey, according to NJ.com.

Claiming the state "abdicated its responsibility" to act in the public's best interests, 17 hospitals want the State Department of Banking and Insurance to rescind its decision to allow Horizon BCBS to sell the OMNIA tiered network of plans. The plans are set to take effect Jan. 1, 2016. If the state does not overturn its decision, the hospitals will ask an appellate court to intervene, according to the report.

The hospitals' appeal is the latest and most serious challenge to Horizon's new line of insurance products, which Horizon says will offer consumers significant savings if they agree to seek care from hospitals that have been chosen for the network and that have agreed to accept lower reimbursement rates. Trenton, N.J.-based Saint Peter's University Hospital has sued to be included among OMNIA's "Tier 1" network, while lawmakers are also asking state and federal authorities to probe potential antitrust violations.  

The 11 health systems consisting of 17 hospitals filing the appeal have been relegated to "Tier 2" status, according to the report.

"The entire plan is designed to encourage members to choose Tier 1 hospitals over Tier 2, and is based on projections that patient volumes at Tier 1 hospitals will increase as patients migrate from Tier 2 hospitals," court documents said, according to the report. "A loss of patients with high quality commercial health insurance will likely endanger the financial viability of the Tier 2 hospitals."

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