Bayonne Medical Center (BMC) announced that it has resolved all outstanding issues with Horizon Blue Cross Blue Shield, the largest provider of health insurance in the state of New Jersey. As of Oct. 1, Bayonne Medical Center will be considered in-network for all services for Horizon subscribers.
When BMC came under new management in 2008, the owners sought better financial deals with insurance companies. Thus, the hospital decided not to offer discounted rates to some insurance carriers. That meant that patients covered by those carriers might have to pay out-of-network rates.
Brad Gingerich, an officer of Bayonne Medical Center at the time, said cancelling the contracts would help keep the hospital solvent, while still allowing it to provide heath care to those who need it.
“I am very pleased to report that we have reached an agreement with Horizon with the best interests of our patients in mind.” -- Daniel Kane
Usually, health care providers want insurance companies to steer patients through their doors and are willing to accept the discounted fees set by the insurer. But in many cases, the insurance carriers are aware of how cash-strapped the hospitals have become. Due to this, the insurance carriers offer to settle the claims at a rate drastically below the original contracted price. Hospitals desperate to get cash often agree, and, as a result, also lose money.
Court rules against Horizon
The new agreement may have been prompted by an Aug. 12 court ruling that threw out significant portions of a suit brought against BMC two years ago.
At the time, BMC offered to accept patients at in-network co-payments just to draw them in, a policy they later dropped after Horizon filed suit.
Horizon tried to convince the court that BMC engaged in “fraudulent” bill practices, one of the charges the court rejected.
The court dismissed Horizon’s claims for fraud, concealment, negligent misrepresentation, and ruled that BMC had not acted improperly.
“We always have held firm that insurers should engage BMC in fair reimbursement and payment policies because BMC has at all times acted within the law,” said Daniel Kane, CEO of BMC, in an August letter to the hospital staff.
BMC’s attorneys said the lawsuit, when it was filed, had the potential to hurt patients more than the hospital. BMC said its policy of waiving co-payments and deductibles makes health care more affordable for patients.
Horizon said the suit was settled, though the terms of the settlement remain private. BMC officials said the rate will be fair to the hospital and the patients.
For Bayonne residents – especially school employees and many retirees – this agreement allows them to return to BMC for treatment.
This suit and its aftermath have significant implications not only in Bayonne, but nationwide, since BMC was one of the first hospitals in the nation to challenge insurance companies’ policies. Most expect management of the Hoboken University Hospital to take on similar policies when it is purchased shortly.
“I am very pleased to report that we have reached an agreement with Horizon with the best interests of our patients in mind,” said Kane. “This agreement is a result of our ongoing, good-faith negotiations with Horizon and will allow us to continue providing the highest quality care for our patients.”