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Muoio & Gusciora Bill to Ensure Tiered Health Insurance Networks Operate in Public’s Best Interest Advances

Bill Spurred by Growing Tiered Network Trend Would Create 21-Member Task Force to Study Issue

Legislation sponsored by Assembly Democrats Elizabeth Maher Muoio and Reed Gusciora to create a task force to help ensure that tiered health insurance networks operate in the public’s best interest gained Assembly panel approval on Monday.

The bill was prompted by the growing trend toward the implementation of tiered health insurance networks and seeks to examine whether policies and protections are in place to ensure that these types of networks operate in the public interest. The latest example of these tiered networks is Horizon Blue Cross and Blue Shield’s recently unveiled OMNIA Health Alliance plan, which provides select coverage for its insured at only 22 state hospitals, leaving others with higher premiums and deductibles if they utilize hospitals not designated as “Tier 1.”

Many hospitals throughout the state, including both in the capital city represented by Muoio and Gusciora, have been left out of the plan with little explanation as to how hospitals were selected for inclusion.

“This task force will help address the two main areas of concern we’ve had since day one – a lack of oversight and the absence of transparency – when it comes to rolling out a plan of this magnitude that will have such a widespread impact on healthcare access in New Jersey,” said Muoio (D-Mercer/Hunterdon). “Our goal is to ensure that residents, no matter where they live, have access to quality, affordable healthcare, and that these plans do not affect the viability of hospitals that were left out.”

“Since this issue first came to light in September, we’ve met with state regulators and Horizon officials and held a hearing with various stakeholders,” said Gusciora (D-Mercer/Hunterdon). “In the end, we were still left with more questions than answers and capital city residents, along with many others throughout the state, are still without access to a tier one hospital in their local community. Ultimately, our goal is to ensure that residents, particularly the urban working poor, are not forced to travel great distances to find adequate health care.”

The bill (A-888) would establish the “New Jersey Task Force on Tiered Health Insurance Networks” for the purpose of studying the recent trend towards tiered health insurance networks, identifying the impact on consumers, hospitals, providers, and the health care delivery system, and making recommendations for legislation and strategies to create more effective and efficient policies regarding tiered health insurance networks in the state to ensure that tiered networks operate in the public interest.

The Assembly Regulatory Oversight Committee, chaired by Gusciora, previously held a joint hearing with the Assembly Health and Senior Services Committee in early December to discuss and hear from those in support and opposition of tiered health networks.

The task force would be charged with considering:

1. the competitive environment in the health insurance marketplace in New Jersey and the market share of the insurance companies in the market;
2. whether current protections concerning disclosures and enrollment of consumers are adequate for tiered networks;
3. whether current network adequacy rules need to be revised to address tiered networks and, if so, in what manner;
4. the effects of tiered networks on hospitals, particularly urban “safety net” hospitals, and measures the State should take to address any concerns that are identified;
5. the potential for the State government, as one of the largest providers of health insurance coverage in the State, to influence the manner in which tiered networks function to reflect the State’s policy goals;
6. how the process of creating tiered provider networks can be made more transparent, fair and equitable for both providers and consumers;
7. the role of the Department of Health in assessing the effect tiered networks might have on the financial security of hospitals, particularly urban and “safety net” hospitals;
8. the National Association of Insurance Commissioners’ “Health Benefit Plan Network Access and Adequacy Model Act;”
9. the recommendations of the New Jersey Commission on Rationalizing Health Care Resources in that commission’s Final Report issued on January 24, 2008;
10. whether current network adequacy regulations are adequate to ensure that there is a diversity of health care facilities located throughout the State in the tiered networks, including essential community providers and hospitals which provide significant levels of care to low-income, uninsured, and vulnerable populations, so that tiered networks do not discriminate against underserved or high-risk populations;
11. whether potential limitations on access to out-of-State hospitals in tiered networks is in the public interest and how network adequacy regulations can fairly address access to those facilities;
12. any other considerations the task force deems appropriate towards improving the State’s policies concerning tiered health insurance networks; and
13. the components and efficacy of value-based insurance design.

The task force would be chaired by the Commissioner of Banking and Insurance or the commissioner’s designee, and be comprised of 21 members appointed by the Governor, Senate President and Assembly Speaker representing various health care, business, labor and academic institutions, as well as a citizen/consumer protection representative.

The task force is to report its findings and recommendations to the Governor and the Legislature, along with any legislative bills that it desires to recommend for adoption by the Legislature, no later than 12 months after the date of organization of the task force, at which point the task force will expire.

This act would take effect immediately and would expire upon the issuance of the task force report.

The legislation was approved by the Assembly Regulatory Oversight Committee.