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Critics Accuse Horizon of Snubbing Catholic Hospitals For OMNIA Tier-1 Slots

Head of Catholic hospital group says Horizon’s Tier-1 choices do not follow industry safety scores, despite insurer saying quality was considered

Add the state’s Roman Catholic hospitals to the healthcare providers who feel they’ve been unfairly excluded from the OMNIA Alliance launched last month by Horizon Blue Cross Blue Shield of New Jersey.

According to Sister Patricia Codey, president of the Catholic HealthCare Partnership of New Jersey, Horizon designated only one of its 12 member-hospitals as a Tier 1 facility -- St. Joseph’s Regional Medical Center in Paterson.

OMNIA includes three dozen Tier 1 hospitals.

Under the insurance giant’s plan, patients who opt to be treated at a Tier 1 facility would pay less out of pocket than those who choose a Tier 2 hospital. This has led to widespread concern among Tier 2 providers that they will lose business to facilities in the top tier, and, in worst-case scenarios, be forced out of business themselves.

A very early indication of how things could play out may come as soon as tomorrow, when state workers can begin choosing a tiered health plan aligned with OMNIA.

The alliance is aimed at lowering costs and improving quality through closer coordination and management of patients’ healthcare.

According to Horizon officials, “quality” was one of several factors they took into consideration when designating top-tier facilities.

But it wasn’t the only factor, and those left outside of this “Tier 1” are questioning whether quality was given enough consideration by the insurance giant – and by state regulators, who have found that the plans meet state requirements for healthcare access.

Codey noted that Tier 1 diverges from the Leapfrog Group hospital safety scores, a highly regarded measure of hospital performance.

Among hospitals that were scored, only 36 percent of Horizon Tier 1 hospitals received an “A” from the Leapfrog Group, while 57 percent of Tier 2 hospitals and 45 percent of Catholic hospitals got an “A.” A searchable database of all hospitals, their Horizon tier status, their safety scores, and whether they’re Catholic is available online.

Codey said that Horizon should be more transparent in the criteria it used to determine who it would invite into the OMNIA Health Alliance and Tier 1. Until that occurs, it remains an open question why so few Catholic hospitals were included.

“Without really knowing the criteria that Horizon used, it’s a mystery,” Codey said.

Company representatives have defended the selection criteria, which they said was focused on a shift away from paying providers for the volume of services they deliver to paying them for the value they provide to patients based on measurements of quality, patient satisfaction, and cost efficiency.

“Horizon BCBSNJ engaged in a thoughtful and deliberate process in choosing the OMNIA Health Alliance based upon an understanding of the desire, ability, and demonstrated commitment by those health systems to move from fee-for-service to fee-for-value healthcare,” Horizon spokesman Thomas Vincz said in a statement.

“We did not consider in our criteria the health systems’ tax status, religious affiliation, or governance structure,” Vincz said, adding that the hospital systems didn’t play a role in choosing the others. “The tier status is not a view of the quality of care provided by an individual hospital, but rather based upon their demonstrated commitment, capacity, resources and ability” to change how they deliver care.

While Horizon officials didn’t directly address the question of why the Catholic hospitals were left out, the reference to “capacity, resources and ability” may be crucial. Partly for historical reasons related to governance structure, many of the Catholic hospitals have evolved as standalone institutions and don’t have as large financial resources as the larger systems that were included in the alliance and Tier 1.

This can be particularly important in a “value-based” purchasing system, since hospitals must wait a longer period of time to receive payments that are based on measurements that must be gathered over many months. Systems with a financial cushion have more time to wait for payments.

However, Codey noted that some of the Catholic hospitals, including the two-hospital Lourdes system and Holy Name Medical Center in Teaneck, have a track record of delivering value-based healthcare, in the form of accountable care organizations.

Assemblywoman Valerie Vainieri Huttle (D-Bergen) offered support to Codey yesterday.

“I sincerely hope that Horizon did not intentionally keep Catholic hospitals out of its Tier 1 plan,” she said, adding that Horizon could quickly dispel the issue by making its selection criteria transparent.

Codey isn’t alone in wanting to see a greater emphasis on quality in the design of insurance tiers. Linda Schwimmer, the new president of the New Jersey Health Care Quality Institute, said there are advantages to insurers using quality measurements like the Leapfrog Group scores.

The safety scores are transparent and allow patients, employers, and insurers to quickly check why hospitals received the score that they did.

“The purpose behind making that safety score available … is so consumers and purchasers can make decisions around quality and around safety,” said Schwimmer, a Leapfrog Group board member.

She noted that insurers sometimes include factors that depend on patients’ perception of hospitals, such as whether they offer single rooms, which may have nothing to do with the quality of healthcare they deliver.

“I don’t think it’s my place to say how they should design their product -- it’s their product,” said Schwimmer, a former Horizon executive, before adding: “We believe that quality should always be a central factor in determining what’s in price- preferred” tiers or networks.

Codey, Schwimmer, and several legislators have called for greater state scrutiny of the OMNIA Health Alliance and Horizon’s Tier 1. But the state has already approved the plans.

State Department of Banking and Insurance spokesman Ed Rogan said the state performed “all of its required due diligence in a timely manner and treated this request for a tiered offering as it has treated all previous tiered offering applications.”

Rogan added that while the department doesn’t have “discretion to approve or deny a plan based on considerations outside of the scope of the regulation, we are aware of the concerns by legislators and members of the Trenton community and have encouraged Horizon to address these concerns directly.”

Sen. Shirley Turner and Assembly members Reed Gusciora and Elizabeth Muoio (all Democrats representing Mercer and Hunterdon counties) have asked for Gov. Chris Christie to intervene to stop the approval of the tiered plans. They cited the state’s authority to regulate “health service corporations” -- a special category of insurer -- to serve the pubic interest.

“We happen to think that they could read their enabling legislation more broadly than they do,” Muoio said of DOBI officials.

The state did not have authority over the tiered plan being offered through the State Health Benefits Program, since it’s a self-funded plan and is regulated by the U.S. Department of Labor. Unlike traditional commercial insurance plans, in which an employer pays an insurer a monthly premium and the insurer must cover all patients’ healthcare costs, insurers ultimately pay all healthcare costs in a self-funded plan.

This issue and others related to the OMNIA Health Alliance are slated to be discussed on Monday at a public hearing hosted by the Senate Commerce and Health, Human Services, and Senior Citizens Committees.

Health Committee Chairman Sen. Joseph F. Vitale (D-Middlesex) and Commerce Committee Chairwoman Sen. Nia H. Gill (D-Essex and Passaic) sent a letter last week to Horizon Chairman, President, and CEO Robert Marino asking him for a 30-day moratorium on the release of OMNIA plans.

Vitale said yesterday that he’s waiting to hear from Horizon, but he is concerned about the level of oversight exercised by the state -- and whether state regulators are “acting in the interest of all consumers, not just the ones who are selected by one particular organization.”

“I’m deeply concerned and deeply skeptical about this product, how it was designed, how it was rolled out, and the effect it will have on consumers around the state,” he said.

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