Horizon Blue Cross Blue Shield of New Jersey will pay $100 million to settle the state’s largest-ever non-Medicaid False Claims Act allegation. New Jersey officials alleged that Horizon fraudulently induced the state to enter into a 2020 contract to administer its employee benefit programs and then systematically overcharged for health care claims.
A group of private individuals called relators initially sued on behalf of the state under the New Jersey False Claims Act. This law, which imposes civil penalties on individuals or firms that knowingly make false claims for payments from the state, allows private citizens to sue on the government’s behalf and keep a portion of the proceeds if the suit succeeds.
“At a time when everyone is rightly concerned about the cost of their health care, it is simply unacceptable that an insurance company would seek to defraud our state and overcharge us, while driving up the costs of health care for hundreds of thousands of dedicated public servants,” Attorney General Matthew J. Platkin said. “We will not hesitate to hold accountable anyone who breaks the law and harms our residents, no matter how big or powerful you are. I would like to thank our legal team and the Treasury Department for investigating this case and delivering historic relief for our residents.”
State officials alleged that Horizon, which administers public plans that insure more than 750,000 state and local government workers and retirees, had ignored a contract provision that required it to charge the state the amount billed by a health care provider or an amount negotiated between the provider and Horizon, whichever is less. During the bidding process, the insurer concealed the fact that it could not comply with this provision and later ignored it, submitting more than 1,000 false claims to the state, with fraudulent records to support them, state prosecutors said.
Horizon received almost $500 million over the nearly five years under that contract, state officials said. Along with Aetna, the insurer was chosen to act as a third-party administrator for the state plans in contracts awarded last year. Horizon countered that the state mischaracterized the facts of the case.
“This has never been anything more than a straightforward contract dispute, one that Horizon tried to resolve in good faith more than four years ago in the same way it has resolved similar disagreements over the course of our long and fruitful partnership with the state: through a negotiated reimbursement,” Thomas Wilson, a company spokesperson, told the New Jersey Monitor.
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