Health Insurance Plan of New Jersey
Health Insurance Plan of New Jersey or HIP of New Jersey was a Health Maintenance Organization in New Jersey that was declared insolvent in 1998 and filed for bankruptcy in 1999. The bankruptcy left some people with no insurance coverage. Jaynee LaVecchia, the State Commissioner of Banking and Insurance proposed legislation to create a fund to pay the costs of future HMO failures in New Jersey.
In 1997 the health maintenance organization entered into an asset purchase agreement with PHP Healthcare Corporation (PHP), a Delaware for-profit corporation. In 1999, the company went bankrupt when the $120 million they were owed by Pinnacle Health Enterprises was never paid.
- V. Fobister (November 23, 1998). "State Declares HIP of New Jersey Insolvent". American Medical News: 11.
- Smothers, Ronald (March 6, 1999). "Spurning Rescue Bid, Judge Orders an H.M.O. to Close". New York Times. Retrieved 2009-03-12.
If the ruling stands, it would end a nearly five-month-long drama that plunged HIP's 165,000 patients into confusion and health providers into a frenzy to recoup the nearly $120 million they are owed by the plan and Pinnacle Health Enterprises, a Virginia company that went bankrupt after entering into a medical management contract with HIP promising to make it more competitive.
- "Health Insurance Plan of New Jersey". Superior Court of New Jersey. 1998. Retrieved 2016-07-08.
- Smothers, Ronald (February 10, 1999). "Failed H.M.O. Is to Be Shut In New Jersey". New York Times. Retrieved 2009-03-12.
In interviews two months ago, state regulators said that the heart of the company's problem was a year-old contract it had with a private company, Pinnacle Health Enterprises, which was supposed to infuse the insurer with new capital and management expertise. In the end, Pinnacle was found to have neither the capital nor the expertise necessary to keep H.I.P. of New Jersey afloat, so the state moved to take it over.
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