Bayonne Medical Center could shut out some Medicaid recipients under new agreement with insurance company

October 4, 2011 - Star Ledger

BAYONNE — After a very bitter and public feud, the Bayonne Medical Center and Horizon Blue Cross Blue Shield of New Jersey announced an agreement last month that made the hospital in-network for subscribers.

The dispute cast a large shadow on a bid by the ownership group of Bayonne Medical Center to purchase Hoboken University Medical Center. Some feared that customers of the state’s largest insurer — Blue Cross Blue Shield of New Jersey — would be shut out of the the Hoboken facility.

The parties said last month's agreement would extend to Hoboken and quelled some of those fears, but the fine print of the agreement has raised new concerns.

Under the agreement, Bayonne Medical Center will not accept Horizon’s NJ Health, an insurance plan available to the neediest residents under Medicaid, according to the insurer.

And it’s unknown whether the Bayonne hospital ownership group will adopt a similar no-Medicaid policy if and when it takes control of the Hoboken hospital. A spokesman for Horizon said the company is in talks with the prospective ownership group about continuing Medicaid managed care coverage at Hoboken.

If so, that would mean roughly 1,000 Medicaid patients a year who rely on the two hospitals for managed care will be forced to look elsewhere, according to state figures of Medicaid populations. Last year, about 7 percent of all patients at the Hoboken hospital were Medicaid recipients.

“While it’s helpful that they will finally be in-network, I am not surprised that they are not including individuals with Medicaid,” said state Sen. Joe Vitale (D-Middlesex) “ For these prospective buyers, its about maximizing profits, not services.”

Vitale said “if this keeps up, then there will be legislation in short order to require all hospitals to accept Medicaid.” Currently, state law requires at least one hospital in each county to provide such coverage.

A spokesman for the ownership group did not immediately return phone calls seeking comment.

All hospitals are required to treat patients on an emergency basis, but they are not required to provide managed care through Medicaid. The reimbursement rates under Medicaid are the lowest.

The New Jersey-based health insurer and the Bayonne Medical Center had been in a protracted legal dispute over a fee structure since the hospital announced that it was no longer going to contract with any health insurance provider.

In May 2009, Horizon filed a lawsuit in U.S. District Court against the Bayonne Medical Center alleging that the hospital’s policy of accepting what the insurer reimburses, and not billing patients for the balance, was unlawful because there was no incentive for patients to use an in-network hospital.

The future of Hoboken University Medical Center still remains much in doubt. The hospital filed bankruptcy on Aug. 1 and has yet to reach a settlement agreement with creditors on $34 million in outstanding debts.