Horizon Blue Cross Blue Shield of New Jersey has signed an agreement with 34 of the largest hospitals which will accept lower reimbursement in exchange for higher patient volume — presumably achieved by employees who choose “tier one” hospitals and get cheaper premiums. But hospitals left out of Horizon’s top tier are crying foul because their consumers will face higher co-pays and deductibles.
Linda Schwimmer, the CEO of consumer advocacy group the New Jersey Health Care Quality Institute, said the Christie administration needs to be more involved in vetting the plan and its impact on consumers and the hospital landscape.
Participating hospitals include some of the largest in the state, such as Barnabas, Atlantic Health, Hackensack and Robert Wood Johnson, but excludes most Catholic and city hospitals, which historically treat the largest number of poor and uninsured people. Burlington County and Trenton have no “tier one” hospitals at all.
The centerpiece of Horizon’s new plan is the creation of the Omnia Alliance, with 22 of the 34 tier-one hospitals earning more if they show they are providing quality care by keeping people healthier at a lower cost.
Insurance companies in the state and across the country are already offering “tier network” plans to hold down costs, and cost-conscious consumers benefit from them, Schwimmer said. But there are others to consider, such as people who don’t have transportation to tier one hospitals, and who those want to remain with a hospital they trust but no longer may be able to afford.
Schwimmer said state departments responsible for insurance and hospitals should examine how Horizon created this new plan and share that information. Banking and Insurance spokesman Marshall McNight said the department “has reviewed the Omnia-tiered plan and found that it satisfies network access requirements.” He did not elaborate on how Horizon met these state regulations. “While the department does not have discretion to approve or deny a plan based on considerations outside of the scope of the regulation, we are aware of the concerns raised by legislators and members of the Trenton community and have encouraged Horizon to address these concerns directly,” McNight added.
The Department of Human Services did not review the plan because Medicaid recipients will not be enrolled in it, department spokeswoman Nicole Brossoie said. Schwimmer said the Horizon plan will hurt hospitals that derive a large share of their patients from Medicaid. If the city “workhorse” hospitals, which see a large number of uninsured or Medicaid patients, lose their patients with private insurance, “what happens to them?”
Horizon officials have said they expect the transition will be gradual with an estimated 250,000 people joining in 2016. Alarmed state lawmakers said they would push for more information about the impact of Horizon’s plan.
“We need to make sure the safety net system is there for them,” Schwimmer said. “That is a state responsibility.”