Hospitals excluded from Horizon Blue Cross Blue Shield of New Jersey's preferred list have won the right to see a secret report containing the selection criteria and the scores they received.

The hospitals argue the report will show that Horizon had other considerations besides health care quality when it grouped hospitals as "Tier 1" and "Tier 2" when it created a lower-cost health plan.

The New Jersey Supreme Court ruled Monday in favor of four hospitals – Holy Name Medical Center in Teaneck, The Valley Hospital in Ridgewood, CentraState Medical Center in Freehold and St. Peter's University Hospital in New Brunswick – on one aspect of their long-running legal challenge to Horizon's Omnia plan.

It was a small victory about evidence in the case, in which the hospitals argue that Horizon breached its contract with them and damaged their reputations by excluding them from the preferred tier.

Horizon, the state's largest insurer, fought all the way to the state Supreme Court to protect its consultant's report, which provided specifics about how the new tiered health plan would be created. Now the report will be given to the hospitals – albeit confidentially and with some redactions – and the case will resume in Superior Court. A trial date has been set for February.

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In its decision, the Supreme Court said the Appellate Division "exceeded the limits" of its role when it found the report would be irrelevant because the hospitals' case rested on the "slenderest of reeds."

Horizon said it accepts the "procedural ruling" and still believes the case brought by the hospitals is weak. Four of the original seven health systems that filed suit with Valley and Holy Name in December 2015 have dropped out of the case. St. Peter's had filed its case individually.

Horizon urged "this small handful of hospitals to follow the lead of the hospitals that dropped out of this lawsuit and work with Horizon policyholders – not against them.”

The attorney for the hospital group said the institutions want to become part of Horizon's preferred list. "Our hospitals would like to be designated as Tier 1 hospitals going forward," said Michael K. Furey, of the Day Pitney law firm. "And then to be paid damages for what they've lost before they are designated as Tier 1."

Monday's Supreme Court decision was a "step in unraveling the secrecy" about the Omnia plan, he said.

The documents to be released will show that "instead of relying upon objective health care criteria, Horizon pre-selected the state’s largest and most expensive hospitals to be Tier 1 providers," he said. "We are also suspicious that Omnia is not a value-based plan, and Omnia, in practice, is far different from how Horizon has described it publicly."

Horizon sent shock waves through New Jersey's hospital community in 2015 when it announced it would offer new, tiered health plans with lower premiums and lower out-of-pocket costs for customers who seek health care from hospitals and doctors on the preferred, or Tier 1, list. The non-preferred hospitals argued that it would steer patients away from them, and in some cases threaten their very survival. They also feared that it would cause people to think the care at their hospitals was of lower quality.

But Horizon said it was addressing the chief concern of its customers: the cost of health coverage. The Omnia plans provide high-quality coverage at lower cost to the consumer, the insurer said, while also allowing consumers to choose Tier 2 hospitals if they were willing to pay more.

In its first year, the Omnia plans were chosen by nearly 189,000 New Jersey customers who bought coverage through HealthCare.gov, the Affordable Care Act marketplace for New Jersey. The plans covered a total of 234,000 people.

This year, 240,000 people who buy their own coverage chose Omnia plans and an additional 12,086 small and medium-sized groups also selected them. The plan currently covers 70,000 people who previously had no coverage, said Kevin McArdle, a Horizon spokesman.

Email: Washburn@northjersey.com