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Horizon Blue Cross Blue Shield of New Jersey will pay $100 million to the state to settle claims that it fraudulently secured a multibillion-dollar public-employee health plan contract and systematically overcharged taxpayers for years, Attorney General Matthew J. Platkin announced Friday.

The settlement marks the largest non-Medicaid False Claims Act recovery in New Jersey history, according to Platkin.

Allegations of Fraud and Overbilling

The state alleged that Horizon violated the New Jersey False Claims Act by misleading officials into awarding it a 2020 third-party administrator contract while concealing that it could not comply with a key cost-saving “lesser of” provision.

Under the provision, Horizon was required to bill the state the lower of either the provider’s actual charge or the insurer’s negotiated rate. According to the complaint, Horizon knew internally that it could not meet this obligation but still submitted a winning bid.

Over the life of the contract, the company allegedly submitted more than 1,000 false claims and sent inaccurate explanation-of-benefits statements to members, the state said.

State Steps In After DOJ Declines

After the U.S. Department of Justice declined to pursue the case, New Jersey intervened in federal court. The state’s newly unsealed complaint includes three counts under the New Jersey False Claims Act:

• Fraudulent inducement

• Submission of false claims

• Submission of false records

The complaint also alleges breach-of-contract and unjust enrichment.

Horizon, the complaint says, discussed potentially issuing refunds if its overbilling was discovered, indicating awareness of the improper charges.

Historic Settlement

Attorney General Platkin highlighted the significance of the settlement, noting that it safeguards taxpayer dollars and underscores the state’s commitment to holding insurers accountable.

The resolution comes after years of scrutiny over how public-employee health plans are administered and billed, shining a light on systemic vulnerabilities in large-scale state contracts.