Hospitals relegated to tier 2 have sued Horizon to be admitted to OMNIA's top tier in fear of losing money.
TRENTON -- Horizon Blue Cross Blue Shield of New Jersey has agreed to admit three more hospitals to the top tier of its popular, lower-cost OMNIA health insurance plans -- a designation other hospitals have sued to acquire to get an edge in the state's cut-throat health care marketplace.
The new "tier 1" hospitals - Raritan Bay Medical Center in Old Bridge and Perth Amboy and HackensackUMC Palisades - are owned by Hackensack Meridian Health. The decision announced by Horizon and hospital officials Wednesday means all 11 acute care hospitals in the chain will be part of the top tier in 2017, according to the announcement.
OMNIA Health Plan premiums cost about 15 percent lower than other Horizon insurance products, and OMNIA policy holders who use tier 1 hospitals and medical providers pay lower out-of-pocket costs.
Horizon is the state's largest insurance company, serving 3.8 million of its nearly 9 million residents. There were 280,000 people enrolled in OMNIA plans in 2016, its inaugural year, surpassing the company's first-year estimate of 250,000, Horizon announced Wednesday.
"Horizon continues to listen to consumers and we're responding to their call for more affordable choices and better quality plans," said Tom Wilson, Horizon's director of Public Affairs.
Horizon selected only about half of New Jersey's hospitals to be included in tier 1, a strategy which required the hospitals accept deep discounts to their reimbursement rates in exchange for an anticipated flood of new consumers.
From the moment Horizon unveiled the OMNIA products in September 2015, hospitals who were allowed to remain the OMNIA network but as tier 2 facilities cried foul, saying the designation hurt their reputations. They also said the competition would drive them to close or merge with other hospitals to stay alive.
A group of hospitals sued the Christie administration to overturn its insurance department's approval of the OMNIA plans and lost. St. Peter's University Hospital in New Brunswick and a group of seven hospitals -- now down to three -- also sued separately accusing the Horizon of breaching its contract with them by not inviting them to join OMNIA's top tier.
Horizon then sued tier 2 hospitals Valley Hospital in Ridgewood and Holy Name Medical Center in Teaneck for an advertising campaign that implies OMNIA coverage is somehow deficient or dangerous.
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"Providing our communities with patient-centered, affordable, quality care has always been the goal of Hackensack Meridian Health," Patrick Young, president of Population Health for Hackensack Meridian Health said in a statement. "By broadening our collaboration with Horizon, we're able to further advance our mission of delivering integrated care while providing affordable access to more OMNIA health plan members."
Both the Raritan Bay medical centers and the former Palisades Medical Center are recent acquisitions by Meridian and Hackensack, respectively. Then in June, Meridian and Hackensack merged, creating the second-largest hospital system from Bergen County to the Jersey shore.
"Horizon and Hackensack Meridian Health share a commitment to working collaboratively to transform the delivery of health care to lower costs, improve quality outcomes, and enhance the patient experience," said Allen Karp, Horizon's senior vice president for Healthcare Management.
In keeping with the buying frenzy, Hackensack Meridian officials announced last week they would also acquire JFK Medical Center in Edison. It was not immediately clear if or when JFK would be added to the tier 1 network. Both sides are still working out the details of what they are calling an "affiliation" which then it must be approved by the state.
Hackensack Meridian Health general acute care hospitals are HackensackUMC in Hackensack; Jersey Shore University Medical Center in Neptune; Ocean Medical Center in Brick; Riverview Medical Center in Red Bank; HackensackUMC Mountainside in Montclair; HackensackUMC Palisades in North Bergen; Raritan Bay Medical Center in Perth Amboy and Old Bridge; Southern Ocean Medical Center in Manahawkin; Bayshore Community Hospital in Holmdel; HackensackUMC at Pascack Valley in Westwood.
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.