Secret scheme kept Catholic hospitals out of N.J.'s largest network, hospitals say

By Susan Livio NJ Advance Media

New Jersey's largest insurance company "schemed in secret" to deliberately exclude Catholic hospitals from participating in a new plan that will lure customers with cheaper premiums, the president of the Catholic HealthCare Partnership said Monday.

Sister Patricia Codey, the partnership's president, said she could draw no conclusion other than religious discrimination to explain why seven out of eight Catholic hospital systems were not invited to join Horizon Blue Cross Blue Shield of New Jersey's new line of health plans available next year.

Most Catholic hospitals scored high on the Leapfrog Group's national safety report card, she noted. And, they are accustomed to running leaner operations while treating more poor people compared to many of the largest hospital systems Horizon invited to join its OMNIA Alliance and the "tier one" network.

"Horizon was not transparent and schemed in secret with select hospital systems while refusing to detail the criteria they used," Codey said. "So in the end, not only did Horizon deliberately exclude Catholic hospitals, but they have chosen some of the most expensive hospitals in New Jersey which will cost their customers even more."

"Insurance companies should not be able to dictate which of our state's hospitals succeed and which ones fail," she said. "However, that is exactly what Horizon – the state's largest insurer – is doing with its plan to designate Catholic hospitals as second-tier facilities. The implication of Horizon's decision is clear to Catholic patients."

Horizon denied religious affiliation had anything to do with the hospitals the selected for their new product.

"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 health care. We did not consider in our criteria, the health systems' tax status, religious affiliation, or governance structure," Horizon spokesman Tom Vincz said.

"Health systems were separately approached to join the Alliance and did not know of or 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 move from fee-for-service to fee-for-value as an organized system of care," Vincz said.

The attack by the Catholic hospital group joins a growing group of critics concerned about the plan announced earlier this month by Horizon, insurance provider for 3.7 million New Jerseyans. Sens. Joseph Vitale (D-Middlesex) and Nia Gill (D-Essex) last week asked Horizon for a 30-day delay before it introduces the new plans to state employees in October. The senators are holding hearing on the plan Oct. 5.

Horizon has signed an agreement with 34 of the largest hospitals, which will accept lower reimbursement in exchange for higher patient volume — presumably achieved by consumers who choose "tier one" hospitals and get cheaper premiums. The centerpiece of Horizon's new plan is the creation of the OMINA Alliance, with 22 of the 34 tier-one hospitals earning more if they show they are providing quality care by keeping people healthier at a lower cost.

Horizon officials have said they expect the transition will be gradual with an estimated 250,000 people joining in 2016.

The biggest players in the state's hospital landscape are included in the alliance, such as Atlantic Health, with its flagship hospital Morristown Medical Center, Robert Wood Johnson University Health, based in New Brunswick, Barnabas Health, based in Livingston, and Hackensack University Medical Center.

The St. Joseph Healthcare System in Passaic County is the only Catholic system participating in the new tiered hospital and physician network Horizon will begin phasing in next year. 

State lawmakers came to the defense of Catholic hospitals in their districts, including Assemblywoman Valerie Vainieri Huttle (D-Bergen).

"As a Catholic and as Chair of the Assembly Human Services Committee, I have seen firsthand the commitment Catholic hospitals have to the communities they serve, such as Holy Name Medical Center (in Teaneck) in my district," Huttle said. "I sincerely hope that Horizon did not intentionally keep Catholic hospitals out of its tier 1 plan. If Horizon wants to quickly dispel this claim, it should be transparent with the criteria it used to select the elite group of hospitals that would participate in this new alliance."

"Often, Catholic hospitals serve poorer communities. These are the residents who are most in need of less costly but still high quality healthcare. If these claims are true, they are unacceptable," she added.

Horizon recently created a web page explaining the plan, including endorsements from health insurance consultants and the chairman of the of the New Jersey Statewide Hispanic Chamber of Commerce.

"Health care costs in the state are especially problematic for our small businesses and present a challenge that many of them simply can't meet any longer. By paying for the value, not volume, of health care being provided to lower costs, as OMNIA will do, it will ease the burden on both working families and businesses in New Jersey and create a friendly, more welcoming environment," Carlos Medina, the chamber's chairman said. "This is a new, innovative way of providing care that should be embraced across our state."

Codey said Horizon's refusal to detail how hospitals were selected and others excluded leaves the insurance giant open to accusations of discrimination.

"Just last week, Pope Francis spoke to Congress and talked about how we need to do more to help our poor and under-served communities. Horizon's decision will undoubtedly make it more difficult for Catholic hospitals to continue our mission of providing access to the healthcare for New Jersey's poor and uninsured citizens," Codey said.

Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.