A judge Monday ordered a hearing between Horizon Blue Cross Blue Shield of New Jersey and St. Peter's University Hospital to determine why the state's largest health insurance carrier excluded the city hospital from a new line of discounted health plans.
NEW BRUNSWICK -- A judge Monday ordered a hearing between Horizon Blue Cross Blue Shield of New Jersey and St. Peter's University Hospital to determine whether the state's largest health insurance carrier illegally excluded the city hospital from a new line of discounted health plans.
Declaring the case had "a public interest component on both sides," Superior Court Judge Judge Frank M. Ciuffani decided Horizon must turn over information explaining why it decided against including the New Brunswick hospital in the preferred network.
"Restraining health care costs is very important, the services doctors and hospitals provide are very important," Ciuffani said.
Attorneys for St. Peter's argued that Horizon violated their longstanding contract by not inviting the Catholic hospital to participate in the OMNIA Health Alliance health plans.
St. Peter's is not among the 36 OMNIA and "Tier 1" network of hospitals that will save policyholders 15 percent more on their premiums than other Horizon plans.
The community hospital, which provides some $39 million in charity care and other health services to uninsured and low-income people, could suffer catastrophic financial losses if they were not allowed to participate, attorney Jeffrey Greenbaum told the court.
The hospital estimated these loses could range from $4.3 million to $39 million -- the amount it generates from Horizon managed care policy holders.
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Noting Horizon's dominance in the health insurance market, serving nearly half of the people in the state, Greenbaum said: "I don't think they should have the power to decide who are the winners and losers here."
The judge granted the hospital an expedited hearing to make its case that it meets Horizon's criteria of "quality-based and value-based care."
But the judge denied St. Peter's request to block Horizon from marketing and launching the OMNIA Health Alliance and the two-tier hospital networks in January.
"Our reputation is getting damaged every day when they repeat these claims" that OMNIA and Tier 1 hospitals "have the best quality and safety records," Greenbaum argued.
The judge said he would not grant such an "extraordinary" request. "The ramifications of stopping the program are pretty dramatic and draconian."
"We will give you your day in court," he said, ruling from the bench after a 90-minute hearing.
Horizon spokesman Thomas Rubino said the company was pleased with the judge's decision to let OMNIA move ahead.
"We appreciate the court's decision to deny St. Peter's University Hospital's attempt to stop Horizon Blue Cross Blue Shield of New Jersey from offering the new lower cost OMNIA Health Plans to consumers," Rubino said. "The court's decision ensures more affordable health insurance options will be available to New Jersey consumers, including the projected 40,000 currently uninsured who be able to afford OMNIA Health Plans in 2016."
"It is unfortunate that St. Peter's, one of our longstanding network hospitals, would choose litigation instead of conversation on how we can work together to provide those we both serve with access to lower cost health care. Horizon will vigorously defend its ability to offer the people of New Jersey innovative low cost health insurance," Rubino added.
In previous interviews, Horizon said OMNIA and Tier 1 hospitals agreed to accept deep reimbursement cuts in exchange for greater market share, presumably from patients who decide against Tier 2 hospitals to save money. OMNIA's core 22 hospitals will also share in the savings by providing more preventive care and keeping people healthy.
Greenbaum said during the hearing that Horizon and hospital executives had met to discuss the OMNIA plans, but excluded them without explanation. He surmised Horizon invited the six largest chains including 22 hospitals, including St. Peter's direct competitor in New Brunswick, Robert Wood Johnson University Hospital, and added in the 14 others to fill out the geographic map to reach its customers.
"They discriminated against all independent hospitals, and all of the Catholic hospitals are independent," Greenbaum said. "They are in the inner cities...serving the underprivileged."
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.
