Horizon BCBSNJ Conversion Update

Posted by sys on 05/10/2013 12:00 am  /   The Marketplace

On August 15, 2008, Horizon Healthcare Services, Inc., doing business as Horizon Blue Cross Blue Shield of New Jersey ("HBCBSNJ") filed an application with the New Jersey Department of Banking and Insurance ("NJDOBI") to convert from non-profit to for-profit status.

Conversion Process Status Update
The conversion application since that time pursuant to NJSA 17:48E has been under review by the Commissioner of the New Jersey Department of Banking and Insurance and the Attorney General. The potential conversion has stirred debate within the State from current Horizon members, the provider community, Horizon competitors and State constituency groups such as the New Jersey Hospital Association, Medical Society of New Jersey, the Catholic HealthCare Partnership of New Jersey, Qualcare and the Alliance for Advancing Nonprofit Healthcare. The original application submitted was deemed to be incomplete and resulted in a listing of open questions and documents that Horizon was required to submit prior to the application being deemed complete. In response, Horizon at the beginning of March released hundreds of pages of additional information in response to the state Attorney General’s ruling last year that its application was incomplete. Even with the additional documentation submitted, some still feel that important information pertaining to the conversion and the potential impact on the State remain unavailable for public review and are being maintained as confidential by Horizon.

New Jersey regulators again determined that the application by HBCBSNJ to become a for-profit insurance company still failed to provide sufficient information needed for consideration and continues to remain incomplete in a letter issued May 7. The letters detailing the determination can be found at the DOBI link listed below. DOBI’s determination provided the reminder to Horizon that the task at hand is for them to clearly and fully articulate the case for the requested conversion to for-profit status. That argument needs to include how the conversion will benefit policyholders and with enough supporting evidence to clearly substantiate that the conversion would be in the public interest.

Senate Bill 2532 
Stemming from the debate which began relatively quickly after the application was submitted last August was the introduction of a bill that would add additional oversight to the conversion of all nonprofit health service organizations. Senate Bill 2532 which is sponsored by Senator Loretta Weinberg (D-Teaneck) would allow for:

  • Qualified parties to intervene in conversion applications
  • Additional access to documents related to the application
  • Required fairness analysis to assess the health impact of the conversion
  • Proceeds from the conversion would be required to be placed into a trust
  • Required public hearings (4 state-wide) rather than the current required single meeting as per the statute

The Senate Commerce Committee approved S-2532 with amendments on May 14. The bill modifies P.L. 2001, c. 131, which established the conversion process, by:

  • Increasing the required public hearing from one to at least four to be held on a regional basis
  • Requiring that at least two of the hearings be held after the commissioner receives and makes public all related written reports
  • Increasing the notification period of a public hearing from 45 to 75 days prior to the scheduled hearing.
  • The "intervenor" clause was amended to grant the public advocate intervenor status.
  • Modifies the current fairness analysis to assess the impact of conversion on healthcare subscribers; determine whether adequate costs are addressed; examine the impact on accessible healthcare for underserved and vulnerable individuals; and, determine whether the conversion would meet the needs of all state residents and promote the public interest.

HBCBSNJ did testify against the bill noting that the current statute provided for sufficient public interest protection and also noted opposition for the change from a fairness analysis to a health impact study. The bill now proceeds to the Senate for Second Reading or potential referral to another committee.

New Jersey law provides for a public hearing on the application which occurs once the application is determined to be complete which to date has not occurred. To stay current on the status of the conversion and the information being provided for public consumption, utilize the following links:

Links for Additional Information:

Department of Banking and Insurance Conversion Page
Site provides links to the documents that have been submitted to the State of NJ by Horizon as required by the conversion process and subsequent State responses. It also notes the associated deadlines for filing for each of the documents.

Horizon Blue Cross Blue Shield of NJ Conversion Page
You can sign up by providing your name/e-mail address to get updates from Horizon regarding the conversion process.

Information available at this link also includes: conversion application, Foundation Plan, Non-Privileged Board Materials, Responses to State Questions, Company History, 2007 Annual Report, 2007 Taxes Paid and various other items.

Contribution compliments of Tracy Davison-DiCanto, MBA

Opinions expressed in articles or features are those of the author(s) and do not necessarily reflect the view of the New Jersey Chapter of the HealthCare Financial Management Association, or the Publications Committee. The HealthCare Financial Management Association and the Publications Committee assume no responsibility for the accuracy or content of any article or feature on the website.

Published 18 June 2009