A June 27 article in The Star-Ledger and on NJ.com,
"Confidential documents suggest Horizon misled
public on how it picked hospitals for OMNIA
program," discussed confidential reports and related
documents that have been obtained in connection with a lawsuit
brought by three New Jersey-based hospitals against Horizon Blue
Cross Blue Shield of New Jersey. Day Pitney's Mike Furey was
quoted in the article.
The hospitals alleged that Horizon breached its obligations by
limiting its selection of Tier 1 hospitals to the largest hospital
systems. In April 2018, the Supreme Court of New Jersey granted a
motion by Advance Local Media LLC, which intervened in the lawsuit,
to obtain these confidential materials. According to the article,
the confidential materials suggest that Horizon invited two of the
largest and most expensive hospital systems to join the exclusive
OMNIA network—even before Horizon hired a consultant,
McKinsey & Co., to evaluate hospital quality and cost.
"They had already decided they wanted Barnabas and Hackensack
to be the partner hospitals. They told the Legislature and the
public they selected the best hospitals in the state who provided
the lowest cost care, and they said they did it on the basis of
what McKinsey told them," said Mike, who represents the three
plaintiff hospitals, Centrastate Medical Center, Holy Name Medical
Center and Valley Hospital. "But we uncovered they were
already having these discussions in 2013 and early 2014 before they
began the selection process."
The article also reports that Horizon and McKinsey developed six
criteria, each weighted differently, to select Horizon's
preferred hospital partners. Leadership and quality each account
for 25 percent of the score, which Horizon officials have argued
demonstrates its commitment to choosing the best partners. Quality
measures earned more weight in later versions of McKinsey's
report.
Mike contended that other categories benefit larger hospitals and
hospital chains. Services "across the care continuum"
reward hospital chains, because what one hospital may lack in
specialty or outpatient care can be complemented by another in the
same system, he said. "Consumer attractiveness" favors
the big-name institutions that can afford to wage aggressive
marketing campaigns. In addition, the article states, based on the
confidential materials, that cost was ultimately not considered in
selecting Tier 1 hospitals. Horizon officials, according to court
records, said they did not judge hospitals based on what they
charge now because OMNIA intends to create a
"value-based" payment model, which rewards hospitals for
keeping people well. However, Mike said Horizon is still paying
hospitals the old-fashioned way, so cost should matter.
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