CarePoint Health's move to no longer accept Horizon as an in-network provider will drive up consumer costs, insurance officials said.
TRENTON -- Two for-profit hospitals in Hudson County have declined to renew their in-network agreement with New Jersey's largest insurance company, a move likely to make thousands of north Jersey patients think twice about where they can afford to receive treatment.
CarePoint Health, the parent company for Bayonne Medical Center and Hoboken University Medical Center, did not re-sign with Horizon Blue Cross Blue Shield of New Jersey when their contracts expired May 2 and June 2, respectively, CarePoint spokesman Jarrod Bernstein said Thursday.
Christ Hospital in Jersey City, also a CarePoint property, ended its in-network affiliation a year ago, Bernstein said.
CarePoint remains "open to continued negotiations in good faith," Bernstein said. But given what he said was Horizon's insufficient reimbursement level, "being out of network is not a business strategy -- it is a survival strategy," he said.
Representatives from Horizon, and the New Jersey Association of Health Plans quickly released statements Thursday warning consumers their costs will escalate if they continue to use CarePoint hospitals.
They also reminded the public that Bayonne Medical Center has been singled out repeatedly for being the most or among the nation's most expensive hospitals based on their "charges" -- the sticker price people pay who are outside an insurance network that is also used as a negotiating point with insurance companies.
Hospitals may cut ties with Horizon
Horizon members "choosing Hoboken University Medical Center after today will face higher out-of pocket costs," Horizon spokesman Tom Vincz said.
"Out-of-network hospitals generally charge rates well above those agreed to by network hospitals," and state law allows it, he added.
Since Christ Hospital left the Horizon network in June 2015, the hospital has billed Horizon more than $68 million in out-of-network charges, Vincz said. (It was not clear Thursday night how much of that Horizon had paid.)
State law protects patients who are treated in the emergency room from astronomical bills by requiring hospitals to charge negotiated in-network rates. But the costs get passed on to insurance companies, which try to negotiate them down.
The legislature has repeatedly but unsuccessfully tried to change the law to control out-of-network and other "surprising billing."
"The problem of price gouging and surprise billing just got bigger for New Jersey consumers, the State Health Benefits Program, the State Treasury, and public employees," said Wardell Sanders, the insurance association's president.
Horizon is the state's largest insurer, serving 3.8 million members. It also has the largest array of in-network hospitals and hospital systems, with 59 out of 64. The network does not include Palisades Medical Center in North Bergen and and Bergen Regional Medical Center, Paramus, and now all three of CarePoint's hospitals in Hudson County.
That leaves only one hospital in Hudson County in Horizon's network: Jersey City Medical Center, owned by RJW Barnabas, the largest hospital chain in the state.
The insurance market is rapidly changing with the advent of "tiered plans" that offer consumers a smaller pool of doctors and hospitals to choose from but at a better price.
Horizon is driving much of that change by introducing OMNIA, a new line of health plans that offer consumers cheaper premiums as well as fewer out-of-pocket expenses if they choose one of 36 "tier 1" hospitals. CarePoint is in OMNIA's second tier, which would be more expensive for OMNIA members.
Bernstein declined to discuss OMNIA specifically, but said tiered plans in general "stand to drive commercially insured patients away from so-called tier 2 providers like CarePoint Health, further reducing vital revenue from commercial payers that offset the underfunding of government payers like Medicaid and charity care."
CarePoint remains dedicated to serving its patients, Bernstein said.
"Since rescuing our hospitals from bankruptcy when we acquired them, we have invested tens of millions of dollars in technology and programs to care for all that we serve, regardless of their ability to pay."
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.