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Confidential Documents Suggest Horizon Misled Public on how it Picked Hospitals for OMNIA Program

Publisher: The Star-Ledger, NJ.com
June 28, 2018

Michael Furey was quoted in an article, "Confidential Documents Suggest Horizon Misled Public on how it Picked Hospitals for OMNIA Program," which was published in The Star-Ledger and on NJ.com. The article discusses confidential reports and related documents that have been obtained in connection with a lawsuit brought by three New Jersey-based hospitals alleging Horizon Blue Cross Blue Shield of New Jersey breached its obligations by limiting its selection of Tier 1 hospitals to the largest hospital systems. In June 2018, the Supreme Court of New Jersey affirmed an order granted by the trial court in response to a motion filed by Advance Local Media LLC, which intervened in the lawsuit, to obtain these confidential materials. The plaintiff hospitals submitted a brief in support of Advance Local Media's application.

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 Furey, 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," he continued.

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 – a fact, Horizon officials have argued in legal documents, that demonstrates its commitment to choosing the best partners. Quality measures earned more weight in later versions of McKinsey's report. Furey 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 cites, 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, Furey said Horizon is still paying hospitals the old-fashioned way, so cost should matter.


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