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In Creating Tiered Networks, How Much Transparency Is Fair?

Mary Caffrey
As the fallout over Horizon BCBS of New Jersey's OMNIA tiered health plan continues, the legislature weighs the question: how much transparency will protect consumers and safety-net providers while ensuring a vibrant market that drives down costs?
New Jersey Senator Ray Lesniak gave reporters his imitation of President Lyndon Johnson Monday when he hiked up his pants—one leg at a time—to show off his surgically repaired knees.

Lesniak’s visual highlighted the quality care from his hometown Trinitas Hospital—but on this day when the conversation was about transparency in healthcare, it raised the question: how much is too much information?

Legislators spent hours discussing just how much insurers should have to disclose—and how specific criteria should be—as they debated bills inspired by OMNIA, the alliance and tiered network plan that is Horizon Blue Cross Blue Shield’s vehicle for expanding population health in New Jersey.

To Lesniak, “Where there’s secrecy there’s suspicion.” The veteran legislator was among those who want Horizon to share more than it has about the selection process that created OMNIA, to protect consumers and to ensure that safety net hospitals treating high numbers of poor, non-English speaking patients aren’t treated unfairly.

But the day also brought testimony from the state’s most powerful Democrat—Senate President Steve Sweeney—who said the needs of everyday consumers have been forgotten amid the lawsuits, press conferences, and demonstrations.

The creation of OMNIA has attracted national attention for its scope and the controversy it has generated in trying to take on the second-highest healthcare premiums in the country. All agreed Monday that low-cost, high quality healthcare is needed, but the route to get there has upended politics as usual in New Jersey.

OMNIA is both a healthcare alliance that demands contractual obligations from 6 major health systems and a physicians’ group, and a tiered health plan that offers lower premiums and out-of-pocket costs to enrollees who stick with certain providers—especially hospitals in the preferred tier, known as Tier 1. A second group of hospitals, known as Tier 2, can still be reimbursed by Horizon, but if consumers have OMNIA coverage they will pay more. The population health piece requires the alliance partners to make investments in electronic health records, and they must agree to alternate payment models that feature lower rates upfront with the promise of shared savings on the back end.

At Monday’s hearing, business leaders and labor unions were united in demanding lower healthcare costs for employers and workers. Meanwhile, advocates for the poor and safety net hospitals, including the Catholic Healthcare Partnership of New Jersey, found themselves allied with the Medical Society of New Jersey, which yesterday announced plans to join a lawsuit seeking to overturn OMNIA’s regulatory approval.

Bills discussed yesterday would require more transparency in creating tiered health plans, set standards for creating tiers, give providers rights to appeal, and add the Department of Health to oversight process. While the head of the New Jersey Association of Health Plans (NJ-AHP) embraced some proposals for improved consumer education and plan disclosure, the bills raise questions: how much information should insurers have to disclose in a competitive environment? And should all criteria for a preferred tier be purely objective?

Sweeney, a likely candidate for governor next year, said he wants “transparency” to extend to doctors and hospitals. “I support requiring insurance companies to disclose the criteria they use in developing tiered products,” Sweeney testified. “I also support requiring insurance companies to fully educate consumers about their cost-share obligations. I don’t believe this type of transparency will hurt any current products, increase costs, or threaten consumer choice.

New Jersey, he said, “can no longer afford a healthcare system that rewards the number of patients who enter a hospital or doctors’ office—almost like a sports team is rewarded for bringing fans into the stadium. The idea is to keep patients out of the hospital, not bring them in.”

He called on each of New Jersey’s 72 hospitals to send him information on their “pure profit margin.” To which Sister Patricia Codey, SC, Esq., president of the Catholic Healthcare Partnership, requested that the state’s insurers do the same. All but one of New Jersey’s Catholic hospitals were left out of the preferred tier.

Between Sweeney, who is a labor official, and the state’s public employee unions, worker groups were visible at Monday’s hearings. Long before the OMNIA controversy, Sweeney has been among those looking for ways to retain benefits while keeping them affordable and making New Jersey more competitive.

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