Saint Peter’s Healthcare System and Horizon Blue Cross Blue Shield of New Jersey have settled a years-long contract dispute, the organizations announced Wednesday.
Effective May 1, New Brunswick, N.J.-based St. Peter’s will become a Tier 1 facility in Horizon’s OMNIA Health Plans, which means members pay the lowest level of cost-sharing for hospital and outpatient surgery services provided by the “best” doctors and hospitals in Horizon’s managed care network. The undisclosed settlement resolves allegations that Saint Peter’s University Hospital was illegally excluded from Horizon’s top OMNIA plan.
“We are pleased to have reached an agreement settling our legal dispute. Instead of continuing to focus on our differences, we look forward to working together to advance healthcare quality, affordability and the customer experience,” the companies said in a joint statement.
Saint Peter’s and several other area hospitals sued Horizon in 2015 after they were placed in the second tier of OMNIA health plans, resulting in higher out-of-pocket costs for patients and narrower networks.
Horizon breached their contracts by allegedly rigging the tiering system to favor certain larger hospitals, which dented their revenue, the hospitals argued in multiple lawsuits. The hospitals claimed that they agreed to lower reimbursement rates in return for sharing the savings expected from OMNIA as well as an increase in patient volume.