Horizon to Pay $100 Million in Record False Claims Settlement with New Jersey

MORRISTOWN, NJ - Horizon Healthcare Services, Inc., doing business as Horizon Blue Cross Blue Shield of New Jersey, has agreed to pay $100 million to settle allegations that it fraudulently induced the State of New Jersey into a multi-billion-dollar contract and systematically overcharged the State for healthcare services, Attorney General Matthew J. Platkin announced. The settlement is the largest ever obtained under New Jersey’s False Claims Act outside the Medicaid program.

According to a complaint unsealed this week, Horizon allegedly violated multiple provisions of the New Jersey False Claims Act (NJFCA), including making false claims, submitting false records, and fraudulently securing a 2020 third-party administrator (TPA) contract to manage the State Health Benefits Program (SHBP) and the School Employees’ Health Benefits Program (SEHBP).

“At a time when everyone is rightly concerned about the cost of their healthcare, it is simply unacceptable that an insurance company would seek to defraud our State and overcharge us while driving up the costs of healthcare for hundreds of thousands of dedicated public servants,” said Attorney General Platkin.

At the heart of the allegations is Horizon’s failure to follow a key cost-control mechanism in the 2020 contract known as the “lesser of” provision. This clause required Horizon to charge the State the lower of either the amount a healthcare provider billed or the pre-negotiated rate between the provider and Horizon. Despite promising compliance in its bid, internal records cited in the complaint indicate Horizon knew it could not follow the provision and chose to conceal this from the State.

As a result, the State alleges Horizon submitted over a thousand false claims between 2020 and 2025, misrepresented payments in Explanation of Benefits (EOBs) sent to members, and collected nearly $500 million in TPA fees. The State's Division of Pensions and Benefits began its own investigation in 2021, uncovering widespread discrepancies. Although a federal investigation was declined, the State filed its own complaint in U.S. District Court in November 2025, alongside the settlement.

The agreement requires Horizon to pay the $100 million to the State within 25 days of the settlement's effective date. Horizon has also agreed to comply fully with the “lesser of” provision going forward, as part of its current co-TPA contract awarded in December 2023. Additional oversight measures, including monthly and quarterly verification reports, will remain in place through 2025 to ensure compliance.

As part of the settlement, the State will pay $12 million to five individuals who originally filed a qui tam lawsuit under the NJFCA’s whistleblower provisions. A sixth relator, a former State benefits official, was excluded from the award due to a conflict of interest and lack of supporting evidence beyond the State's pre-existing investigation.

Horizon is one of the largest healthcare administrators in New Jersey, serving more than three million residents, including over 750,000 public employees and their families.

The case was led by Assistant Attorney General Lara J. Fogel and a team of Deputy Attorneys General from the Division of Law’s Affirmative Civil Enforcement Practice Group and Financial Affairs Practice Group.

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