Horizon and New Jersey insurance officials have slightly different reasons why it was OK for the insurer to roll out its high-profile population health and cost-saving effort 5 days before the network plan was approved. A critic of the plan says it should be stopped.
Horizon Blue Cross Blue Shield of New Jersey launched a high-profile marketing campaign of its OMNIA Health Alliance 8 days before a key regulator signed a letter stating it met tiered network requirements, and 5 days before the state informed CMS the tiered network was approved.
A letter obtained by The American Journal of Managed Care through an open public records request offers the latest twist in the effort to bring value-based care to New Jersey on a widespread basis. Horizon’s September 10, 2015, rollout of OMNIA, which put about half the state’s hospitals in a preferred, or Tier 1, network and the rest in Tier 2, has been met with scorn from hospitals whose users would not enjoy lower co-payments—the reaction in some circles has been fierce.
At the same time, however, business interests have welcomed the chance for small groups or the self-employed to cut their insurance costs, since New Jersey is among the most expensive states for health coverage.
The letter from Holly Gaenzle, (click here) chief of the Office of Managed Care within New Jersey’s Department of Banking and Insurance (DOBI), states that DOBI “has completed its review of Horizon Blue Cross Blue Shield of New Jersey’s application to establish the OMNIA Network. This network is approved state-wide as of September 15, 2015. On that date, the Department advised (CMS) that it was revising its (Qualified Health Plan) certification to indicate that the OMNIA network was approved.”
DOBI spokesman Marshall McKnight said that the September 18 correspondence “was merely a letter confirming the action taken by the Department on September 15 in advising CMS that the network was approved.” Insurance laws do not prohibit carriers from marketing plans before all regulatory approvals are in place, he said, but products cannot be sold before the networks are found to be adequate. Sales prior to final approval, not marketing, would trigger enforcement, McKnight said.
Gaenzle’s letter goes on to state that any changes to the network that depart from Horizon’s application must be approved by DOBI.
Horizon BCBSNJ, for its part, said yesterday that the September 10 rollout of the OMNIA Health Alliance was an announcement of its contractual relationships with its various partners to launch a population health initiative, and that DOBI has no regulatory authority over this—a point on which the Department agrees, and the statutes confirm. However, along with the announcement came a list of which hospitals were included in Tier 1, which quickly became a point of concern for those that failed to make the list. Several state media outlets reported full lists of which hospitals made the cut.
An all-day hearing on October 5, 2015, at the state Senate before committees that regulate insurance and health policy ended with a call for an investigation by New Jersey’s acting attorney general.
Horizon was criticized for a lack of transparency in how it selected the hospitals included in Tier 1, and for overlooking some well-known and publicly available data sets such as hospital safety scores by The Leapfrog Group. Critics of Horizon’s plan say some hospitals with high scores were left out of Tier 1, while hospitals with lower scores were included.
Additional materials obtained in the records request shed light on how close to the wire Horizon was in providing information to DOBI before the alliance was presented to the public. Even though the initial filing came in mid-June, it was not clear for some time whether the hospital network was the same or different from an earlier network plan called Advance, which was not marketed as heavily and did not draw the scrutiny that OMNIA has.
As late as September 3, 2015—a week before the rollout—Gaenzle was pressing Horizon officials for a “hospital table” and asking whether the OMNIA network differed from the old Advance network. Emails show Gaenzle’s frustration at the rapidly changing information, which culminated in a September 15, 2015, email regarding Horizon’s efforts to secure obstetrics services in Burlington County in response to DOBI’s demands, because there was no Tier 1 hospital. The efforts to get obstetric services in Burlington County were discussed at length by Director of Insurance Peter L. Hartt in his testimony at the Senate hearing.
On Friday in Palm Harbor, Florida, Leah Binder, president and CEO of The Leapfrog Group, said Horizon’s approach, and specifically its decision to not consider hospital safety scores in its selection process, made no sense in light of consumers’ known preferences. Binder was the keynote speaker at the fall meeting of the ACO and Emerging Healthcare Delivery Coalition, an initiative of The American Journal of Managed Care.
Binder took note of the press coverage Horizon had received, particularly a story of about leaving out all but 1 Catholic hospital from the preferred network: “You don’t get worse press unless you’re the Duggars.”
Sister Patricia Codey, SC, JD, president of the Catholic HealthCare Partnership of New Jersey, called on regulators to halt the OMNIA rollout yesterday.
"Based on this new information, I have serious concerns that Horizon may have breached New Jersey’s regulatory process in announcing their new OMNIA Health Alliance network. Horizon’s new tiered system will have serious consequences for New Jersey patients and hospitals, and the Administration should not abdicate their regulatory responsibility by whitewashing the approval process,” she said. “The Department of Banking and Insurance should halt the rollout of this plan until the full criteria and impact of the Horizon OMNIA Health Alliance is thoroughly reviewed and considered."
Yesterday, Horizon reacted strongly to Binder’s criticism. “Clinical quality was very much a part of the criteria used for developing the OMNIA Health Alliance,” said spokesman Thomas Vincz. “While we did not use Leapfrog, it does include patient safety measures. CMS Process of Care Scores incorporates measures that overlap with Leapfrog, such as surgical infection prevention and appropriate discharge planning.” Horizon also used readmission rates and outcomes measures reported to CMS.
How did Horizon get to this point? Some observers have suggested that the insurer is the victim of its own marketing blitz. OMNIA is far from the first effort at tiered networks in the state, but prior efforts, including Advance, involved smaller health systems and a much lower profile. There was little fear that large numbers of patients would flee safety net hospitals for suburbia. The trouble with the OMNIA rollout, critics said, was that its boldness reached healthcare consumers with coverage other than Horizon, who quickly gained awareness whether their hospital was Tier 1 or Tier 2, and the latter instantly carried a stigma.
As Democratic Senator Joseph Vitale told Horizon officials at the hearing, “It wouldn’t matter if you were some obscure insurance company. It matters when Horizon does something.”
In her talk Friday, Binder explained the phenomenon is part of the tension that is increasing as consumers are asked to bear more of the burden for their healthcare. An employer who is buying healthcare for 1000 workers seeks a plan that is best for “most” of the staff, but an individual consumer wants value for “me.” An employer might suggest a physician that offers great diabetes care, but the consumer says, “I don’t care—I don’t have diabetes.”
In the case of OMNIA, while the concept might be great for the state as a whole and wonderful for many small businesses, it has been poorly received by some key “me” stakeholders—legislators on the committees that oversee Horizon. Several represent districts home to safety net hospitals left in Tier 2, and Vitale has overseen legislation to pour state dollars into shoring them up to serve the needy. At the hearing, he asked whether OMNIA would threaten taxpayer investments in these facilities.
On the flip side, however, OMNIA is likely attractive to State Treasury officials seeking answers to New Jersey’s ongoing cash crunch. Governor Chris Christie has seen 9 credit downgrades on his watch, and his signature plan to fix retiree benefit obligations has collapsed. The hearing revealed 2 budget plums in OMNIA: first, the state saves $5 million for every 1000 state workers who enroll in OMNIA, and the plan offers a way out of the “Cadillac” tax it faced under the Affordable Care Act.
Of note, there is no mention of OMNIA on the DOBI website. But it’s prominently featured on the page for the State Health Benefits Program.