New Suit Cries Foul Over Marketing of Horizon's OMNIA Plan

The latest suit is the third involving the health plan, which lets consumers pay less premium and lower out-of-pocket expenses if they use only preferred, or "Tier 1" hospitals.

Seven hospital groups already trying to cancel approval of the OMNIA plan from Horizon Blue Cross Blue Shield of New Jersey today filed a new suit over the way it’s been marketed to consumers.

The latest suit claims Horizon committed contract violations and is damaging the hospitals’ reputations by putting them in a non-preferred category, known as Tier 2. Under OMNIA, consumers pay less premium and have lower out-of-pocket costs if they use preferred, or Tier 1, hospitals. The suit seeks to block what it says is misleading advertising and get to the bottom of how its hospitals were left out of the preferred tier.

Horizon’s marketing campaign implies that hospitals left out of the preferred tier offer lower quality care, the suit claims. OMNIA’s tiered network plan was approved in September alongside the creation of the OMNIA Alliance, a series of contractual relationships with 6 large health systems and a physicians’ network to deliver population health on a widespread basis.

“In all of its marketing, regardless of media, in all of its direct mail and email communications to existing or potential customers and in all of the public statements made by its executives, Horizon has been loudly beating the same drum—Tier 1 hospitals and the Alliance provide the highest quality of care and the cost of that care to its insureds will be less than at Tier 2 hospitals through lower premiums, lower deductibles, and lower co-pays,” said the suit, which was filed by Michael K. Furey on behalf of the hospitals.

The hospitals taking this action are: Capital Health System; CentraState Medical Center; JFK Medical Center; Holy Name Medical Center, St. Luke’s Warren Medical Center; Trinitas Regional Medical Center; and The Valley Hospital. They are part of a broader group of 17 hospitals denied a stay Monday of OMNIA’s original approval from the NJ Department of Banking and Insurance. That matter will be appealed, but no hearing has been set, according to Steven M. Goldman, the former DOBI Commissioner who is handling that matter.

When asked, Goldman declined to say what damages the hospitals have experienced since OMNIA was unveiled on September 10, 2015. However, St. Peter’s University Medical Center, which has filed a separate suit against Horizon, previously told The American Journal of Managed Care that women who would have otherwise used its well-known maternity services are moving their care elsewhere for 2016 due to insurance reasons.

Both St. Peter’s and the hospitals suing today say it's unfair to place hospitals in a non-preferred tier without telling them the criteria for how they ended up there. In addition, St. Peter’s has also asked to join Tier 1.

Horizon, in a statement, reiterated that it had received approvals at both the state and federal level. "It is unfortunate that certain hospitals are now working against us--rather than with us--in our mission to provide relief to residents from the crushing cost of healthcare in New Jersey," the statement said. "We are disappointed by the actions of these network hospitals, but we will vigorously defend consumers against another meritless lawsuit, as we have successfully done thus far."