Hospitals appeal state approval of tiered health care group

A dozen medical groups are appealing the state's approval of a new alliance formed by its largest health insurer.

The groups, including Capital Health Regional Medical Center, Trinitas Regional Medical Center and Virtua Health, filed their appeal against the Department of Banking and Insurance on Thursday in Superior Court. They say the department approved Horizon Blue Cross Blue Shield's OMNIA Health Alliance without holding public hearings, among other objections.

The appeal also says the OMNIA plan did not meet network adequacy requirements.

Horizon public affairs director Thomas Rubino called the appeal "unfortunate."

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

The issue stretches back to September, when the department approved Horizon's OMNIA plan, which uses a tiered network and is touted as a money-saving way to cover health care.

Then, in October, the Democrat-controlled state Senate held a hearing on the alliance after which two senators raised concerns over the plan, including wanting to set up a way to oversee how health insurers rate health care providers when they set up tiered systems.

Under the plan, patients will have low or no copays or deductibles for using preferred hospitals and higher out-of-pocket expenses for using other ones.

The hospitals that are appealing worry the alliance is "demoting" them to Tier 2 and that Tier 1 hospitals likely will get more patients because of lower costs.

Horizon says the average premium will be about 15 percent lower than current plans it offers and copays and deductibles also will be lower. The company says that, factoring in premiums and out-of-pocket costs, patients would at worst have the same health care costs as they do now if they use non-preferred hospitals.

A banking department spokesman has not replied to a message seeking comment.

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