Continuing the barrage of legal attacks against the state's largest insurance company, a group of hospitals filed a lawsuit against Horizon Blue Cross Blue Shield of New Jersey Thursday for wrongly excluding them from a new line of discounted health plans and harming their reputations.
TRENTON -- Continuing the barrage of legal challenges against the state's largest insurance company, a group of hospitals sued Horizon Blue Cross Blue Shield of New Jersey Thursday for wrongly excluding them from a new line of discounted health plans and harming their reputations.
By not inviting them to join the OMNIA "Tier 1" network, seven hospitals accused the insurance giant of violating their contracts that require 60-days notice of any new product launches, according to the lawsuit.
Consumers who buy OMNIA plans will pay 15 percent less in premium costs and save potentially thousands of dollars more in copays and deductibles by using 36 "tier 1" hospitals and medical professionals, which have agreed to accept lower reimbursements in exchange for higher patient volume. Consumers can use "tier 2" hospitals and doctors but they will pay more to do so.
But just calling them "tier 2" facilities besmirches their reputations, said Steven Goldman, one of the attorneys representing the hospitals. Horizon has aggressively and misleadingly pitched OMNIA's tier 1 hospitals as providing the best care at the most competitive price, according to the lawsuit.
The hospitals are also seeking an injunction to stop the advertising campaign, Goldman said.
The hospitals suing Horizon are Capital Health System in Trenton and Hopewell; Centrastate in Freehold; Holy Name in Teaneck; JFK Medical Center in Edison; St. Luke's Warren Hospital in Phillipsburg; Trinitas Regional Medical Center in Elizabeth and Valley Hospital in Ridgewood.
Horizon spokesman Tom Rubino called the latest lawsuit "disappointing" and "meritless."
"Horizon Blue Cross Blue Shield of New Jersey received both state and federal approvals with respect to our low-cost, high-quality OMNIA Health Plans, so it is unfortunate that certain hospitals are now working against us -- rather than with us -- in our mission to provide relief to residents from the crushing cost of health care in New Jersey," Rubino said.
"We are disappointed by the actions of these network hospitals, but we will vigorously defend consumers against another meritless lawsuit, as we have successfully done thus far."
The seven hospitals that filed the lawsuit in Superior Court in Bergen County Thursday are among the 17 that sued the state Department of Banking and Insurance for approving the OMNIA plans in a rush without a thorough review.
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The 17 hospitals -- relegated to "tier 2" status without explanation -- contend the eventual loss of patients flocking to cheaper coverage will drive them out of business.
So far, the 17 hospitals have not succeeded in overturning the state's approval. A judge earlier this week granted a hearing but declined to grant an injunction against the OMNIA plan's launch on Dec. 26 for state employees and Jan. 1 on the commercial market.
Saint Peter's University Hospital in New Brunswick is also suing Horizon for excluding it from the "tier 1" category.
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.
