With just a half-dozen legislative sessions remaining before the summer break, Democratic lawmakers seeking to expand state oversight of certain health insurance coverage in the wake of a controversial Horizon OMNIA plan are again pushing forward with proposals calling for additional industry transparency and patient protections.
But the legislators still need to overcome a major intra-party roadblock: New Jersey Senate President Steve Sweeney (D-Gloucester) has declined to post several measures designed to regulate so-called tiered health insurance networks, which Sweeney has praised for helping to lower the cost of healthcare, his office confirmed Monday.
While a number of health insurance companies have offered tiered-network plans in the past, the OMNIA plan introduced by Horizon Blue Cross Blue Shield last fall immediately sparked concerns among hospitals that were excluded from its premium tier. With tiered plans, insurance companies negotiate with a select group of healthcare providers to pay them lower rates in return for higher patient volume, and then pass some of the savings on to customers. Horizon’s plan also includes a “value-based” element, with financial incentives for providers to keep patients healthier.
The hospitals relegated to Tier 2 have opposed Horizon’s OMNIA plan in court, claiming it was crafted unfairly and will harm them economically as patients migrate to Tier 1 hospitals in search of savings. The case is ongoing, although two of the seven initially involved — St Luke’s Warren Campus and Trinitas Regional Medical Center — have since dropped out and are working with Horizon on new value-based arrangements. Some of the Tier 2 facilities also filed a suit challenging the state’s Department of Banking and Insurance’s approval of the OMNIA plan; a decision in that matter is expected any day.
Horizon has aggressively defended the creation of the OMNIA plan as a critical mechanism that can help reduce health insurance costs for patients in one of the nation’s most costly medical markets. They have said the plan was built in a fair, appropriate manner and have claimed that additional regulation will only reduce competition and increase expenses for the industry, which will in turn drive up premiums for customers.
“OMNIA Health Plans represent a new approach that aligns the interests of all parties – patients, providers and payers – to achieve the triple aim of better outcomes, increased patient satisfaction and reduced costs,” Horizon said in prepared testimony submitted in early March, when the legislation came up for discussion but not a vote. “Legislative initiatives that reduce consumer options or put roadblocks in the way of value-based programs are problematic.”
But Sen. Joseph Vitale, (D-Middlesex), the longtime health committee chair, and Sen. Nia Gill, (D-Essex), have continued to advocate for legislation (S-634) designed to ensure healthcare providers have a fair shot of participating in new tiered network plans. Another measure (S-635) would ensure these tiered networks gave patients adequate access to a range of primary care doctors and specialists, all within a certain proximity to their homes.
[related]While a third, less-controversial measure (S-296) to establish basic parameters for tiered networks did advance Monday in the Senate Commerce Committee that Gill chairs, she made clear the most important work remained to be done. “At this time, it is our understanding that Senate President Sweeney does not support the bills, and therefore has not permitted this committee and our members to vote on this legislation,” Gill announced at the start of the hearing.
While Sweeney has the right to “block all legislation that comes before all committees,” Gill said committee chairs also have the authority to set an agenda. “This is a significant issue to New Jersey consumers. And that is why I’m looking forward to hopefully being able to post these bills on June 16,” Gill said, referring to the next scheduled committee meeting.
Sweeney’s office declined to commit to a timeline Monday, but praised the bill that did pass. “I’ve always said, as it relates to health care, transparency is an essential part of improving our system of coverage here in New Jersey. How can we possibly expect health care consumers to feel confident the system is working on their behalf, if they have no idea what they’re paying for?” Sweeney said. “We must be willing to consider any idea that improves outcomes while also reducing cost.”
Vitale called S-296 “an important bill, but not as important” as the other two proposals. “I am disappointed that we are not hearing those two bills (today) that, in aggregate, are probably some of the most important bills we’ve worked on in the past several months,” he said. All three proposals also have Assembly versions that are working their way through that house.
In addition, the OMNIA debate prompted Sen. Shirley Turner (D-Mercer), to introduce a proposal (S-1075) that would require insurers to include hospitals with diverse geography, patient mixes and other factors in each tier. She also introduced a bill (S-1511) to protect patients from excess costs associated with out-of-network visits and a measure (S-1512) to establish a task force to study tiered networks.
Perhaps the strongest legislative response to the controversy is a bill (S-1934) by Senate Majority Leader Loretta Weinberg (D-Bergen) and Sen. Dianne Allen, (R-Burlington), to freeze future enrollment in any tiered network until new legislation and regulations are in place. The OMNIA plan alone attracted 234,000 patients in the first sign-up period, ending in late 2015.
The bill to freeze enrollment is the top priority for Michael Maron, president and CEO of Holy Name Medical Center, in Teaneck, and a leader of the Tier 2 hospitals’ battle against OMNIA. With another critical sign-up period set to begin in the fall, Maron said the state needs to update the tiered regulations before more consumers are added to OMNIA, which he has called a confusing system for both patients and providers to navigate.
While he praised the bill that did pass the Commerce committee, Maron said he was a “little disappointed” the other critical legislation wasn’t moving faster. “Unfortunately the legislative process has been so slow and painful,” he said. “None of us want to be in this fight.”