This is the latest controversy involving OMNIA plans, which give customers a break if they use tier 1 hospitals and doctors.
TRENTON -- New Jersey's oldest physician organization has lashed out against Horizon Blue Cross Blue Shield of New Jersey, the state's largest health insurance company, for requiring doctors to explain how patients enrolled in discount plans can save more money by using a preferred network of doctors.
If doctors don't discuss "the cost sharing implications" of using "Tier 1 or 2" doctors and hospitals with their patients who are enrolled in Horizon's OMNIA plans, they "may be subject to consequences, up to and including termination from Horizon BCBSNJ's networks," according to a newsletter Horizon sent doctors last month.
Doctors also must note in the patient's medical file this discussion has taken place, according to the newsletter article on the "OMNIA Tier Awareness Policy" obtained by NJ Advance Media.
The policy does not dictate that doctors base referrals based on cost, nor does it require doctors steer patients to tier 1 hospitals or doctors.
But Larry Downs, the executive director of the Medical Society of New Jersey, a physician lobbying group critical of OMNIA, said this was "especially troublesome if the physician believes a physician who is not in tier 1 is in the best interest of the patient."
"It's highly unusual and offensive an insurer will dictate to a physician the contents of their medical records and mandate conversations with patients," Downs said. Doctors "are not compensated to be insurance counselors."
Horizon spokesman Tom Wilson said doctors have always been expected to discuss treatment in the context of insurance coverage with their patients. Using out-of-network medical providers is one example, he said.
Wilson pointed to UnitedHealthcare's requirement published on its website that physicians must explain to their patients the added costs associated with using out-of-network benefits. Patients are also required to sign a form documenting this conversation. Physicians who do not comply could face penalties that include termination from the network, according to the policy.
"All health insurers require their in-network physicians to help patients understand the financial implications of their choices," Wilson said.
"The Medical Society's sudden opposition to having doctors play a role in protecting patients from surprise medical bills is further proof that they are out of step with both consumer needs and the physicians they claim to speak for, the overwhelming majority of whom help their patients make informed choices every day," Wilson said.
Horizon has never terminated a contract with a physician for not having these discussions, Wilson noted.
OMNIA backlash: Tougher rules pushed
OMNIA has stirred controversy since Horizon announced it in the fall as a way to control the climbing costs of healthcare. The plans offer consumers lower premiums and co-pays if they use "tier 1' hospitals and doctors -- a preferred network of providers selected by Horizon based on a confidential assessment of their services and value. The tier 1 players also have agreed they would accept less reimbursement in exchange for an uptick in patient volume.
Some "tier 2" hospitals have filed court challenges to compel Horizon to disclose its criteria for selecting "tier 1" providers, and to force their way into the top tier. With Horizon insuring 3.8 million people in a state of nearly 9 million, tier 2 hospitals -- many of which are located in cities and serve a large number of low-income and uninsured people -- fear for their future viability.
Sales of OMNIA were brisk in its debut in the fall, with 234,000 signing up, Horizon says.
Linda Schwimmer, president and CEO of the New Jersey Health Care Care Quality Institute, said she did not object to conversations about cost entering the discussion about medical care. But she questioned how far Horizon should go in dictating the content of the conversation or enforcing the policy.
"I think the role of the doctor and patient is changing and they both are now more part of the payment system, with more of the cost is coming directly from the patient," Schwimmer said. "So they need to be educated and given the information."
"Horizon should have the tools on its website and a phone line for both providers and its members so that they can easily figure it what's what," she added.
Downs said the Medical Society intends to bring the matter to the attention of the state Department of Banking and Insurance, which regulates Horizon.
Banking and Insurance department spokesman Marshall McKnight declined to discuss Horizon's policy, or any matter that involves OMNIA, because of ongoing litigation involving the Christie administration.
A group of hospitals has appealed the department's decision that allowed Horizon to sell OMNIA without verifying whether there were an adequate number of tier 1 hospitals. The Medical Society filed a "friend of the court" brief supporting the hospitals' case.
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.