New Jersey Forces Horizon Blue Cross to Return $100 Million Over Alleged Overbilling of Public Health Plans
New Jersey’s Attorney General announced that Horizon Blue Cross Blue Shield of New Jersey will pay $100 million to settle claims that it overcharged the state for public employee health plans in a landmark move. Horizon was accused of circumventing the “lesser of” provision in a 2020 contract, leading to the settlement. Horizon was contractually required to charge the state the provider’s billed amount or a lower negotiated rate. Horizon allegedly billed the state at the higher negotiated rate, resulting in over 1,000 false claims, according to prosecutors.
Horizon entered the bid despite knowing it could not meet the “lesser of” requirement, which state officials claimed it concealed during contract negotiations. Horizon reportedly earned $500 million from that contract over four and a half years. The company denied fraud, calling it a “straightforward contract dispute.”
Horizon must pay $100 million within 25 days per the settlement. The public health plan commissions will receive $78 million, private whistleblowers will receive $12 million, and New Jersey’s False Claims Prosecution Fund will receive $10 million.
Horizon faces increased oversight under the agreement. To meet “lesser of” standards, it must report claims and financial data daily, quarterly, and monthly. The company will stop misreporting billing information to plan members and follow its new contract’s cost-control provision.
Some parties are unhappy. Public worker unions said the settlement emphasizes the need for tighter health-care vendor oversight. Horizon countered that the Attorney General’s description of its conduct was exaggerated and politically motivated.
The largest non-Medicaid False Claims Act settlement in New Jersey’s history, this case has broad implications for how states contract with third-party administrators in their health benefit programs. Critics say this should warn insurers to respect cost-savings provisions in public contracts, while others blame weak oversight and ambiguous contract enforcement.
The settlement may affect budgets overall. New Jersey’s public worker health plan is struggling, and officials hope recovered funds and transparency measures will stabilize costs.
Sources
New Jersey Monitor
Politico
Bloomberg
New Jersey Globe
PR Newswire
