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CentraState, Horizon end litigation over OMNIA plans

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In a move that seemed to surprise some in the health care community, CentraState Healthcare System said Thursday it was withdrawing as a plaintiff in a lawsuit challenging Horizon Blue Cross Blue Shield of New Jersey’s OMNIA Health Plans. 

The parties issued the following joint prepared statement:

“We are pleased to put our differences behind us and to recognize that working collaboratively to improve the quality of care, lower costs and enhance the patient experience is better than continuing to focus on differences. As part of the agreement, we will accelerate the development of value-based care initiatives at CentraState beginning in 2019 with collaboration on ‘Episodes of Care’ programs for orthopedics and maternity/newborn care.” 

Both parties said specific terms of the agreement would remain confidential. 

In the original lawsuit filed in 2015, the plaintiffs — CentraState, Valley Health System and Holy Name Medical Center — claimed that they were unfairly excluded from Tier 1 status in the OMNIA plans.

Saint Peter’s University Hospital is not part of the Capital Health lawsuit with CentraSate, and Valley Health System, but has filed a separate lawsuit.

A spokesperson for Saint Peter’s told NJBIZ that, “The CentraState settlement in the Capital Health case that is set for trial in Bergen County, has no impact on Saint Peter’s case against Horizon, which is actively proceeding in Middlesex County Chancery Court.”

Horizon’s OMNIA tiered network plan divides hospitals into two categories: Tier 1 and Tier 2. Critics of the plan allege network physicians are incentivized to use Tier 1 facilities due to the elimination or reduction of co-pays and deductibles at the expense of smaller, independent hospitals. Tier 2 plans have co-pays and deductibles that can be higher than under Tier 1.

Michael Furey, an attorney representing Valley Health, told NJBIZ it plans on going forward with the lawsuit that is scheduled to be heard Monday.

At press time, Saint Peter’s University Hospital was preparing a statement in response to the news.

Holy Name Medical Center ended its legal dispute with Horizon in June.

CentraState said that it will continue to accept all Horizon patients, including OMNIA patients, at a Tier 2 level of benefit.

“We look forward to continuing a long-standing partnership grounded in principles of providing value-based care,” John T. Gribbin, president and ceo of CentraState said in a statement.

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Anthony Vecchione

Anthony Vecchione covers health care for NJBIZ. You can contact him at: Avecchione@njbiz.com.

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