LAWRENCEVILLE, N.J., Aug. 2 /PRNewswire/ -- Today, in Superior Court of New Jersey, the Medical Society of New Jersey ("MSNJ"), filed an action "in lieu of prerogative writ" against the Honorable Holly C. Bakke, Commissioner, New Jersey Department of Banking & Insurance ("DOBI"), the Honorable Clifford Lacey, MD, Commissioner, New Jersey Department of Health & Senior Services, the State of New Jersey and United Healthcare Inc. ("United").
Under New Jersey State statute, N.J.S.A. 17:27A-12(b), "[t]he filing of an appeal pursuant to this section shall stay the application of any... order...of the commissioner." Through the court action, MSNJ will obtain a "trial de novo" - a new trial - whereby a Judge of the Superior Court of the State of New Jersey will decide whether this acquisition should be allowed to proceed.
On July 29, 2004, a mere 72 hours after closing the public record concerning the Oxford/United merger, Commissioner Bakke approved the $3.7 billion transaction that will directly impact the delivery of health care services for more than 1.4 million New Jerseyans currently insured by these companies. The projected statewide market share of the merged entity approaches 20%, although it will be significantly greater in New Jersey's six northern counties (Bergen, Essex, Passaic, Sussex, Union, Morris) where the vast majority of United's and Oxford's insured base is currently located. The market shares in these regions violate anti-competitive guidelines set by the state Attorney General's office.
"Unlike the state of New Jersey, physicians are accustomed to advocating for patients, which is why we take legal action today," said Michael T. Kornett, Executive Director & CEO, MSNJ. "Patients deserve to get the tests, treatment and prescriptions they need when they need them. People are paying more for their health care, and should demand more. After having to jump managed care bureaucratic hurdles for years, physicians and patients have had enough."
"It is imperative to take back the patient/physician relationship that medicine is founded upon," said Kornett. "How ironic that on the same day New Jersey approves this acquisition, Presidential nominee John Kerry declares to the Democratic National Convention his plan that `patients and doctors - not insurance company bureaucrats, will make medical decisions.' We must kick the managed care company out of the examination room."
In filings submitted to DOBI as part of the application process, MSNJ had encouraged the New Jersey DOBI Commissioner to apply more restrictive New Jersey guidelines to determine whether a merger will substantially lessen competition and be hazardous or prejudicial to the insurance buying public (New Jersey Stat. Ann. 17: 27A-2(d)). In a report accompanying MSNJ's filing, noted healthcare economist Stephen Foreman, PhD, JD, MPA, determined that the New Jersey healthcare market is already highly concentrated among few companies, with substantial barriers to entry for outside insurers. Foreman also concluded that the merger would likely produce even higher health insurance premiums for employers and financial benefit for the insurance companies' senior management, while patient access to care and physician reimbursement would likely decrease.
"To satisfy United Healthcare, DOBI refused to hire a qualified economist to review the situation and gauge the impact on health care," said Kornett. "No agency can responsibly rule on a merger of this magnitude in less than three days. We also question the timing of DOBI's decision, particularly since the New York Stock Exchange was acting on the information at least six hours prior to the public announcement.
"These two companies systematically interfere in the patient/physician relationship, so much so that MSNJ is in court now with both of them for unfair and deceptive business practices," continued Kornett. "This acquisition intensify United's power over patients and providers, leading to even more one-sided contracts and medical decisions made by clerks - not physicians. With less available health care, we will see increased costs to the patients, employers, labor organizations and others who purchase insurance in New Jersey.
"It is quite obvious that this was a pre-determined and politically motivated decision," added Kornett. "We trust that the Superior Court of the State of New Jersey will take a very close look at the far-reaching implications and impacts of this merger and decide in the favor of New Jersey patients."
Medical Society of New JerseyCONTACT: Matthew Stanton of MBI GluckShaw, +1-973-735-0528, or cell,+1-973-699-3115, for Medical Society of New Jersey
