Horizon Blue Cross Blue Shield’s new health plan has the potential to significantly impact how New Jerseyans get their health care.

For now, the Omnia plan’s impact is still just beginning to be understood -- despite more than 13 hours of legislative hearings, countless private meetings, more than a half-dozen bills, multiple lawsuits and a steady stream of Statehouse press conferences.


“It was new. It was fast. And it was either understood or misunderstood by a variety of different stakeholders and certainly the public and providers for that matter,” said Sen. Joseph Vitale, D-Middlesex.

Here’s what we knew before the plan was announced: New Jersey has the second highest health-care costs in the nation, a point that frustrates consumers and businesses alike.

Six months later, here’s what we’re likely to get next: A lot more disclosure about how tiered health plans are structured and, perhaps, details about other aspects of the state’s health-care sector. Health insurers say they’re fine with it if lawmakers want better transparency.

“Consumers can best utilize and are best-served by their health plan coverage when they understand it,” said Wardell Sanders, president of the New Jersey Association of Health Plans. “While these are complex, complicated products, certainly more can be done in this area.”

Here’s an overview of one of the more complicated topics currently roiling Trenton:

Q: What is Omnia?

Horizon Blue Cross Blue Shield unveiled its Omnia health plan last September and expects about a quarter-million enrollees in this first year. Its goals are to reduce health-care costs and adapt to changes in the health-care market caused by the Affordable Care Act.

Horizon offers five Omnia health plans, with varied monthly premiums and out-of-pocket costs. But the big impact comes in choosing health-care providers. Consumers who go to Tier 1 hospitals and doctors pay lower copays and out-of-pocket costs. They can visit hospitals and doctors classified as Tier 2 but pay higher costs when doing so.

Here are examples: A person enrolled in OMNIA Gold would pay a $10 copay to see a Tier 1 doctor but $30 for Tier 2. An outpatient surgery at a Tier 1 provider would cost $250, compared with 30 percent coinsurance after a $2,500 deductible is met at a Tier 2 provider.

Omnia isn’t the first tiered health plan; they’ve been used in New Jersey for five years. But Horizon accounts for so much of the New Jersey market – at 3.8 million members it accounts for more than half of people with health insurance – that it will have an extensive impact on health care delivery.

Q: So what’s the fuss?

There has been an outcry in large part because hospitals and doctors still don’t fully understand the standards Horizon used to assign health care providers to tiers.

Horizon says it wasn’t required to disclose its criteria. It has said that generally it chose hospitals that scored well on patient safety, quality and satisfaction, though lawmakers have said such assessments should have relied on what’s called the Leapfrog Hospital Survey. Many large hospitals or chains were selected for the preferred tier.

There are 34 Tier 1 hospitals. About two-thirds of those hospitals are part of a "health alliance" that receives higher reimbursements from Horizon for agreeing to change their payment model away from one that pays per service or test provided in favor of one aimed at preventive and quality care.

The 27 Tier 2 hospitals – many of them urban hospitals with a lot of patients who have Medicaid insurance or no coverage at all – say that if Omnia members shift away from them to other hospitals for the discounts, their finances will get shaky. They also say that in addition to not getting a clear answer about why they’re not in the preferred tier, they weren’t given a chance to take part.

“They haven’t been given one iota of transparency under the Omnia plan,” said Sen. Raymond Lesniak (D-Union).

Q: Are the Tier 1 hospitals better?

Horizon says the assignments aren’t a judgment on a facility’s quality of patient care. But that’s certainly an impression left with consumers, say hospitals fearful of losing patients and lawmakers sympathetic to their plight.

“I don’t want to see us embark on a policy that leads to quality places like Valley (Hospital) or Holy Name (Medical Center) losing patients because the patients get the impression that the care they’re going to receive there, on just the impression from the terminology alone, is substandard,” said Sen. Gerald Cardinale (R-Bergen). “It isn’t substandard.”

“I don’t know if it’s called gold and bronze, silver and something else, less filling/tastes great – I don’t know what they use, but that should change,” Vitale said.

Sanders said the tier terminology is commonly used in describing health plans, including by the Centers for Medicare & Medicaid Services, but that the industry would be open to discussing alternatives.

Q: What does the state say about Omnia?

The state Department of Banking & Insurance gave the plan the go-ahead last September. Last week, the Office of the Attorney General said it found no problems when it reviewed the implementation of the new health alliance of six hospital systems and a physician group. Some lawmakers want to expand that oversight to restore a role for the state Department of Health.

Q: Why do lawmakers keep talking about Omnia, and what do they plan to do?

Lawmakers are very focused on it because it’s an important issue. And just as importantly, major institutions in the state, including Catholic hospitals, have made fighting Omnia a priority.

Two committees, one in the Senate and one in the Assembly, held another round of hearings on Omnia Monday. The Assembly panel advanced a bill that would create a task force to study tiered plans. The Senate panel discussed but didn’t vote on three proposals – requiring more disclosure from insurers about tier selections, more public disclosure about costs and biennial reviews by the state.

“These bills are designed to benefit the consumer, to provide transparency,” said Sen. Nia Gill (D-Essex).

Most of the reaction among lawmakers has been allied with the Tier 2 hospitals, but not all. Senate President Stephen Sweeney, D-Gloucester, who has the ability as a legislative leader to decide what legislation is voted upon, sided with tiered health plans in general Monday, although also called for more transparency about how insurers assign hospitals to tiers.

“We can no longer afford a health care system that rewards the number of patients who enter the hospital or doctors’ office – like a sports team is rewarded for bringing fans into a stadium. The idea is to keep patients out of hospitals, not bring them in,” Sweeney said.

Sweeney said he hopes the Legislature is able to adopt transparency reforms regarding tiered health plans by the end of June but said it should go beyond insurance companies to include physician costs and hospital profitability, including salaries of hospital executives.

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