A health insurance company will pay New Jersey $100 million to settle allegations that it defrauded and overcharged the state while administering health plans for state employees, Attorney General Matt Platkin announced.
Platkin said Horizon Blue Cross Blue Shield of New Jersey would pay the record-setting sum — five times larger than any settlement of its type in New Jersey — at a press conference on Friday, where officials revealed the charges. The investigation, Platkin said, found Horizon lied about its ability to comply with a cost-saving mechanism when it applied for a state benefits management contract that began in 2020.
Horizon, for its part, denies the allegations, saying Platkin turned a standard contract dispute into a “media circus,” calling the accusations “loaded, false and dangerous.”
Platkin said the mechanism in question, known as a “lesser of” provision, required Horizon not to pay more for healthcare services than the amount a provider charged — sometimes insurance firms pay higher “negotiated” rates, but the provision would have barred that. Platkin said the company effectively overcharged the state by tens of millions of dollars by ignoring the provision, and officials said “Horizon never had any intention of adhering to the bid requirements.”
“For years now, the state has paid Horizon hundreds of millions of dollars to run the state’s employee health plans as our third-party administrator, or TPA,” Platkin said. “In this role, Horizon is entrusted with managing the delivery of health care to hundreds of thousands of public servants and their family members. We’re here today because a multi-year investigation revealed that Horizon betrayed that trust and took advantage of the state, and ultimately took advantage of all of us.”
In an emailed statement, Horizon accused Platkin of mischaracterizing the settlement for personal and political reasons. Horizon says it has been in contact with the state about the issue since 2021, and that it “addressed the underlying issues that led to the dispute” in 2023. Horizon said the payments in question account for 0.07% of the claims and 0.46% of the total amount paid to providers.
“The outgoing Attorney General’s statements continue a disturbing pattern of significantly mischaracterizing and distorting facts to falsely allege intentional wrongdoing where none exists,” said Tom Wilson, a Horizon spokesperson. “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.”
Platkin defended his office from any wrongdoing of its own.
“It’s rich that a company that has to pay $100 million back to the State is accusing the State of wasting time and resources,” Platkin told the New Jersey Monitor in a separate statement. “We look forward to receiving their payment within 25 days.”
State Sen. Joe Vitale (D-Woodbridge), the chair of the Senate Health, Human Services and Senior Citizens Committee, applauded Platkin and blasted Horizon in a statement of his own.
“At a time when New Jersey families are faced with double digit health insurance increases and the State Health Benefits Plan is in a death spiral, it is infuriating to see Horizon not only fall short on its obligations to the State, but be accused of actively defrauding and overcharging the State and NJ taxpayers resulting in the State’s largest-ever non-Medicaid False Claims Act settlement,” Vitale said. “Their alleged conduct is truly reprehensible.”
