17 hospitals sue New Jersey to block Horizon's OMNIA plan

Claiming abdication of responsibility by the state of New Jersey to act in the public interest, 17 hospitals filed an appeal yesterday, challenging the state administration's approval of Horizon Blue Cross Blue Shield of New Jersey's new line of discounted health plans, New Jersey Advance Media reported.

The hospitals are demanding that the state Department of Banking and Insurance (DOBI) rescind its decision allowing the state's largest insurance company to sell the OMNIA tiered network of plans before they came into effect in January.

They would ask an appellate court to intervene if the decision was not rescinded, according to court documents.

It was the latest and most sweeping challenge to Horizon's new line of insurance products, which its executives say would offer consumers substantial savings if they used hospitals that had agreed to receive substantial cuts to their reimbursement rates.

One hospital was suing for inclusion among OMNIA's "Tier 1" network, while state lawmakers had asked state and federal authorities to investigate whether the plan violated anti-trust and false advertising laws.

Spokesman for Horizon, termed the lawsuit "unfortunate" for consumers.

"New Jersey has some of the highest health care costs in the nation and consumers are demanding relief. It is unfortunate that these lawsuits aim to preserve the high-cost status quo in New Jersey, which is neither sustainable nor acceptable," Rubino said.

According to commentators, it was the most serious action yet against Horizon's high-profile effort to bring value-based care to New Jersey on a large scale.

OMNIA combined a population health alliance in six major health systems and a network of physicians that required partners to make investments in technology and information sharing.

The partners would contract to meet accountability measures that could result in shared savings.

Consumers who enrolled for OMNIA would pay lower premiums and have smaller out-of-pocket expenses for using hospitals and physicians in the preferred tier.

They could still use other hospitals that accepted Horizon, but would pay more.