Hospitals appeal tiered OMNIA health plan recently granted state approval in New Jersey. Several medial groups have now filed their appeal in Superior Court against the Department of Banking and Insurance which they say approved the Horizon Blue Cross Blue Shield’s OMNIA Health Alliance despite the health plan not meeting several requirements concerning network adequacy.
Horizon’s OMNIA plan was approved back in September and it is based on using a tiered network in order to save money when covering health care. But more than a dozen hospitals are suing the Department of Banking and Insurance for having approved the tiered plan without holding public hearings and without listening to several objections raised concerning the network OMNIA had.
While the OMNIA plan was granted approval in September, a hearing on the new health plan was held by the Democrat-controlled state Senate in October. Two senators used the opportunity to voice some concerns they had regarding OMNIA, including the necessity of setting up a way to oversee how health care providers were rated by health insurers when these health insurers established new tiered health care systems.
And the way health insurers rate health providers when they are offering tiered plans is exactly what has prompted more than a dozen New Jersey hospitals to sue the Department of Banking and Insurance in the first place. The hospitals that are appealing the decision to approve the OMNIA health plan are concerned that the new tiered system will demote them to Tier 2 facilities.
The hospitals are worried that being classified as Tier 2 health providers will lead to them losing patients as Tier 1 hospitals are likely to get more patients due to lower costs associated with them. Hospitals may have some reasons to be concerned about the tiered plan because customers covered by OMNIA will have low or no co-pays and will be charged no deductibles for using preferred hospitals and medical institutions but will have higher out-of-pocket expenses for using other hospitals.
This would mean that patients would have to pay more if they chose to seek medical assistance in Tier 2 hospitals. More than a dozen medical groups worried about the demotion to Tier 2 have filed an appeal. Among these groups are the Capital Health Regional Medical Center, the Trinitas Regional Medical Center and Virtua Health.
Representatives for Horizon have called the appeal unfortunate and have stated that these lawsuits aim to preserve high-cost health plans in New Jersey, which has some of the highest health care costs in the country, and that these plans are not sustainable.
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