Horizon Blue Cross Blue Shield of New Jersey customers could find Hackensack Meridian Health hospitals out of network this spring, the companies said Thursday, after they were unable to agree to terms on a new contract.
Hackensack Meridian, the Edison-based health care system, has sent letters to patients with Horizon saying the insurer has been offering inadequate reimbursement rates during its negotiation.
“We have been and remain committed to reaching an agreement but must receive fair care reimbursements from Horizon to continue to invest in the care, medical technology and locations that the local communities we serve rely on and expect,” Hackensack Meridian said in a statement.
The battle pits two health care giants against each other. Newark-based Horizon is the state’s biggest health insurer with 3.8 million members. Hackensack Meridian operates 18 hospitals and has 36,000 employees.
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Its hospitals in Monmouth and Ocean counties are: Jersey Shore University Medical Center in Neptune; Bayshore Medical Center in Holmdel; Riverview Medical Center in Red Bank; Ocean University Medical Center in Brick; and Southern Ocean County Medical Center in Stafford.
The contract affects Horizon’s commercial customers. It doesn’t apply to customers covered through Medicaid or its Braven Medicare Advantage plan. And it doesn’t apply to Hackensack Meridian physicians such as primary care providers.
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The stalemate between Horizion and Hackensack Meridian comes as medical costs are predicted to increase this year at their fastest rate in 13 years, according to PwC, a consulting firm.
The two sides have been negotiating a new contract for the past year that would keep Hackensack Meridian hospitals in Horizon’s primary network. Patients typically pay less out of pocket when they visit in-network providers.
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Hackensack Meridian terminated its hospitals from the Horizon network last October. The move takes effect Feb. 1, but patients can continue to receive care until June 1. After that, customers with a terminal illness, a serious or complex condition, behavioral health services, a non-elective surgery, or pregnancy,can continue to receive care for up to 90 days. Other patients could continue to visit the hospitals, but they would pay more out of pocket.
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Horizon said Hackensack Meridian has demanded significant price increases for services and care at its facilities. “High prices at hospitals directly increase members’ out-of-pocket costs and insurance premiums and make health care less affordable,” Horizon said in a statement.
“We continue to work with HMH to reach an agreement for a fair and reasonable increase in the prices that Horizon members pay for care and to keep HMH hospitals in our network,” it said.
Michael L. Diamond is a business reporter at the Asbury Park Press. He has been writing about the New Jersey economy and health care industry since 1999. He can be reached at mdiamond@gannettnj.com.