TRENTON -- State lawmakers took action on a package of bills that would impose tougher state regulations on tiered health plans Monday, sparked by a backlash against Horizon Blue Cross Blue Shield of New Jersey's new OMNIA products that steer cost-conscious patients to select hospitals.

The state Assembly Regulatory Oversight Committee approved four bills that would require more disclosure on how hospitals and doctors are chosen to join tiered networks. State regulators would have to insure hospitals that serve low-income people are included in these networks, which offer consumers the choice of paying less if they use hospitals and doctors in the preferred tier.

When Horizon last fall debuted the two-tiered OMNIA plans and the cost-cutting arrangement it had struck with 36 "tier 1" hospitals, it instantly generated outrage among the hospitals relegated to "tier 2" status. Patients could still use them but would pay higher co-pays and have to meet higher deductibles to do so.

Michael Maron, president and CEO of Holy Name Medical Center in Teaneck, a tier 2 hospital under OMNIA, described a grim future for tier 2 hospitals that lose out on Horizon's business. Horizon is the largest insurance carrier in New Jersey, covering 3.8 million people.

"If you chose to do nothing, three to five years out from now, tiered networks go away because there will be no second tier" hospitals left, Maron said.

Maron and other hospital executives have said Horizon's market dominance is so great, tier 2 hospitals would have to merge or close down. Multiple hospitals are suing Horizon for excluding them from OMNIA; 17 filed an appeal of the state Department of Banking and Insurance's decision to approve the OMNIA plans in September.

To Tara Cambria, owner of Cambria Automotive with 115 employees in Edison and Elizabeth, OMNIA is a welcome addition to the insurance marketplace.

"Last year we reached a tipping point in costs to our business where we had to think about dropping coverage altogether," Cambria told the committee at the Statehouse hearing. "Fortunately Horizon provides OMNIA and I could not be more pleased with the results. Our employees are offered remarkably low co-pays when they go to the doctor and no co-insurance."

Horizon and the tier 2 hospitals are also engaged in a bitter public relations battle over the legislation. Assemblyman Benjie Wimberly (D-Passaic) said his office was caught in the crossfire last week, mostly from OMNIA fans. He also noted Horizon data that says 2,500 people in Passaic County who were previously uninsured had signed up for OMNIA.

"As a courtesy to the chairman," Assemblyman Reed Gusciora (D-Mercer), Wimberly said he would vote yes on the bills but he remained undecided about what he'll do when they come to the full Assembly for a vote. Assemblywoman Cleopatra Tucker (D-Essex) also voted yes with reservations.

The bills (A886, A887, A2328 and A2329) each were approved in 3-2 votes.

Gusciora said he remained troubled that Horizon got to pick "winners and iosers" in the hospital marketplace, and was worried about Trenton, which had no tier 1 hospitals at all.

"One of the biggest problems we had with the roll-out of these new tiered plans was the lack of transparency when it came to how insurance carriers selected which providers would be included in their premium network," Gusciora said. "This will change all that."

Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.