NJ Extracts $ 100 Million From Horizon BC BS

New Jersey has settled a False Claims Act (of 1863!) qui tam lawsuit against Horizon Blue Cross Blue Shield of New Jersey which alleged widespread overbilling on health insurance claims filed for services rendered to government employees in the state:

https://www.politico.com/news/2025/11/14/horizon-reaches-100-million-settlement-to-new-jersey-stemming-from-health-care-overpayment-allegations-00651966

https://www.njoag.gov/wp-content/uploads/2025/11/2025-1114_NJ-US-ex-rel-Lyon-v-Horizon_Complaint-in-Intervention.pdf

https://www.njoag.gov/wp-content/uploads/2025/11/2025-1114_NJ-ex-rel-Lyons-v-Horizon_Executed-Settlement-Agreement.pdf

Health insurer Horizon settles with New Jersey for $100M stemming from health care overpayment allegations
The state alleged the insurer was charging the state more than what health care providers billed for services. Horizon said the facts were distorted.
By Daniel Han - November 14, 2025

NEWARK, New Jersey — New Jersey Attorney General Matt Platkin on Friday announced a $100 million settlement with Horizon Blue Cross Blue Shield of New Jersey claiming that the insurer fraudulently overcharged the state for health care on its public employee health plans.

The announcement from Platkin stems from Horizon’s contract with the state to administer its multibillion-dollar public worker health insurance programs, which provides health insurance to around 750,000 New Jerseyans. The state alleges that Horizon violated a portion of its contract aimed at saving taxpayers money known as the “lessor of” provision — specifically, that Horizon was required to charge the lesser amount between what health care providers billed for services and the rate Horizon had previously negotiated with those providers in advance.

Instead, the state claims, Horizon charged the higher amount.

“Today’s settlement makes a very clear statement: We send a message to Horizon and to the entire insurance industry that they cannot take advantage of the state,” Platkin said during a press conference. “They cannot make us all illegally pay more for health care. No one is entitled to our business and they are not entitled to New Jersey taxpayer money either.”

Horizon, as part of the settlement, denies any wrongdoing.

Horizon’s book of business with the state and local governments is considerable. In a 4½-year time frame, Horizon received $500 million in fees from New Jersey for administering the State Health Benefits Program and the School Employee Health Benefits Program, according to court documents filed by the state. It also administers health plans for local governments outside the state plan, as well as private businesses.

It was not immediately clear how much Horizon overcharged the state, although Platkin said it was “less than $100 million” and that the state is receiving “substantially more than we paid.” A 2022 Bloomberg report said the state overpaid by $18 million for the top 50 out-of-state claims. Court documents say the state identified “over a thousand false claims.”

Under the terms of the settlement, Horizon’s current contract with the state will not be suspended or terminated if it fulfills the settlement payment — and the settlement has “no bearing” on other contracts Horizon has with New Jersey. Horizon won its current contract while the state’s investigation into the insurer was in its early phases, although one administration official said it would have been premature to prohibit Horizon from bidding on the contract at the time.

The settlement comes as New Jersey’s public worker health plan is on the verge of insolvency — with state officials desperate to find savings for the beleaguered health plan. State officials have said the local government portion of the health plan is in a “death spiral” — with double digit rate increases in the pipeline.

According to Platkin, Horizon bid for the state’s contract to run the health plans in 2019 knowing it could not meet the “lessor of” requirements. Instead of not bidding for the contract or telling state officials it could not meet the requirement, Platkin said the insurer “lied” to receive it.

In one instance, according to court documents, a plan member in 2020 sought care at New York Presbyterian hospital. The hospital billed $674,856, but Horizon requested — and the state paid — over $2 million, an overcharge of around $1.35 million.

State officials began investigating whether Horizon was meeting the terms of its contract in spring 2021, according to court documents. That included adherence to the “lessor of” provision as well as if Horizon was fulfilling a new part of the contract which was meant to save money by steering patients to high quality providers.

While the latter item was subject of an internal state complaint — which sought to claw back $34 million from Horizon to the state — the settlement announced Friday dismisses the internal complaint permanently.

Separately, a complaint was filed under the New Jersey and Federal False Claims Act by private citizens in November 2021, which alleged that Horizon was defrauding the public health plans. Private citizens are allowed to file the complaints if they believe the government is being defrauded.

That lawsuit was filed by Chris Deacon, a former state Treasury official who oversaw the health plans and filed the internal state complaint. Former top officials of the Policemen’s Benevolent Association, who have members on the health plans, and the founders of health benefits consulting firm AVYM filed the initial complaint, which is under seal. The settlement announced by Platkin stemmed from the state intervening in that lawsuit.

In a lengthy statement to POLITICO, Horizon said Platkin was “significantly mischaracterizing and distorting facts to falsely allege intentional wrongdoing” and Platkin was “wast[ing] time and taxpayer resources.” The insurer also said that the settlement represented only 0.46 percent of how much it paid providers over the life of that contract (read more from Horizon here).

“While Horizon’s interpretation of one aspect of the contract differed from the State’s, the settlement makes clear Horizon never retained any portion of monies charged to the State for healthcare provider claims,” the company said. “Horizon paid claims we processed for the State according to the contracts in place with the doctors and hospitals filing those claims.”

In response to Horizon’s statement, Platkin said: “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. We look forward to receiving their payment within 25 days.”

Of the $100 million settlement, $78 million goes to the commissions overseeing the health plans, $12 million goes to the private citizens who filed the Nov. 2021 complaint and $10 million goes to New Jersey’s False Claims Prosecution Fund. Deacon will not receive any settlement funds since she would have been privy to information as a former state official before filing the complaint as a private citizen.

The settlement news is already drawing pushback from public sector unions, who have thousands of members on the health plans.

“The fraud uncovered demands much greater accountability for insurance companies like Horizon that profit so handsomely off of our members and all New Jersey taxpayers,” New Jersey Education Association President Steve Beatty said in a statement. “It is far past time for a much deeper examination of the whole system. That system had been allowed to enrich a few privileged powerbrokers rather than to keep New Jersey residents healthy.”

Deacon said in an interview that the settlement should be a sign that New Jersey should take a close look at its health care vendors to find savings.

“This should be a wake-up call for everybody who got high-single, low double-digit rate increases [for health care],” Deacon said. “There are reasons costs are going up. I would suggest this type of behavior is one of the causes.”

Could similar overpayment practices be occurring in Michigan?