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Horizon's OMNIA Could Change Maternity Patterns in New Jersey

Mary K. Caffrey
Two separate lawsuits have challenged the health insurance plan, which seeks to give some hospitals lower reimbursements in exchange for directing large numbers of patients their way. After business hours, the attorney for a group of hospitals said regulators declined to stay their approval of the tiered network.
An effort by Horizon Blue Cross Blue Shield of New Jersey to introduce population health on a widespread basis could redirect expectant mothers away from 2 of the state's busiest maternity units, including one that has received national recognition for caring for some of the most fragile newborns.

As Horizon faces 2 separate legal challenges to OMNIA, the tiered network formed to implement its cost-cutting initiative, state regulators weighed whether they would reverse their approval. Today was the deadline for the NJ Department of Banking and Insurance (DOBI) to respond to a lawsuit from 17 hospitals left out of the preferred tier, known as Tier 1. At the close of business, Steven M. Goldman, attorney for the hosptials and a former DOBI commissioner, reported that the department had denied a stay of its approval.

“Today’s decision by DOBI is disappointing but not surprising. We intend to continue to pursue a stay of DOBI’s decision in the appellate division and correct what our clients believe to be a flawed process and network,” Goldman said in a statement.

Horizon’s effort has drawn attention at managed care meetings nationwide, as resistance to OMNIA has grown. While the attempt to expand value-based care initially attracted praise, it also drew resistance from urban mayors and legislators who said the state’s largest insurer had no right to dictate the future of New Jersey’s health insurance landscape.

Horizon has 3.8 million members and covers more than 50% of the New Jersey market. However, it lost ground in the small group market in 2014, and company officials have said that OMNIA is designed to cut costs for small businesses, individuals, and the uninsured in one of the country’s most expensive insurance markets.

Directing Where Mothers Go

An examination of NJ Department of Health and CDC data suggests that OMNIA could have far-reaching effects on where babies are born, including the state’s above-average number of twins and triplets. CDC figures from 2011-2013, the most recent years available, show that New Jersey has the highest rate of twins in the nation (44.3 per 1000 live births), and the second-highest rate of triplet or higher order births (174.9 per 100,000). Just over 93,500 babies were born in hospitals in 2014, according to the NJ Department of Health.

However, 2 hospitals that have handled high numbers of twin births in recent years may not be financial options for women expecting a multiple birth. St. Peter’s University Hospital of New Brunswick, which received a Silver Beacon Award from the American Association of Critical Care Nurses for its neonatal intensive care unit (ICU), has been the busiest maternity unit in its central New Jersey market the past 2 years, but has gone to court over Horizon’s OMNIA plan. Virtua Hospital Voorhees, which is a state-designated regional perinatal center and neonatal ICU, serves the southern part of the state. Both were left out of Tier 1 when Horizon announced the OMNIA network September 10, 2015.

St. Peters, which has also received top perinatal scores from The Leapfrog Group, reports it is already seeing a transfer of maternity cases for women due to deliver in 2016, as a result of “unfavorable medical insurance status,” according to Edwin Guzman, MD, chair of obstetrics and gynecology at St. Peters.

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