Horizon BCBSNJ to Pay $100M in False Claims Settlement, Whistleblowers to Share Payout

Trenton, NJ – November 14, 2025 – Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ) has agreed to pay $100 million to resolve allegations of fraudulently overcharging the State of New Jersey for employee health benefits administration, the state Attorney General’s office announced today. The settlement, stemming from a qui tam lawsuit filed by whistleblowers, sheds light on potentially problematic pricing practices within the healthcare industry and underscores the crucial role of individuals who come forward to expose wrongdoing.

Under the terms of the agreement, $88 million will be returned to the State of New Jersey, while $12 million will be distributed among five former Horizon employees who initiated the lawsuit. The case alleged that Horizon concealed its inability to comply with a cost-saving provision within a 2020 contract, leading to years of inflated billing and significant financial harm to the state.

The Core of the Allegation: ‘Lesser Of’ Provision

The lawsuit centered around a “lesser of” provision within the contract, which mandated Horizon to bill the state for the lower amount between a healthcare provider’s charged fee and the negotiated rate. According to the complaint, Horizon internally determined it could not consistently adhere to this provision prior to bidding on the contract but proceeded anyway, subsequently overcharging the state and benefiting from inflated administrative fees.

“The state believes Horizon knowingly misrepresented its capabilities and systematically violated the terms of its contract,” said a source close to the investigation. “This settlement sends a clear message that transparency and accountability are paramount when it comes to managing public funds.”

History of Legal Scrutiny for Horizon

This is not the first time Horizon BCBSNJ has faced legal challenges. The insurer previously settled a class-action lawsuit in 2018 for $160 million related to under-reimbursement of out-of-network ambulatory surgical centers. Furthermore, in 2017, a jury awarded over $2.4 million in a healthcare fraud case against parties allegedly defrauding Horizon. These instances highlight a pattern of legal scrutiny surrounding the insurer's business practices.

Whistleblowers and Qui Tam Laws

The case was brought under the qui tam provisions of both the federal and New Jersey False Claims Acts, incentivizing individuals to report fraud against the government. Under these laws, whistleblowers can receive a percentage of the recovered funds. In this instance, the five whistleblowers will share $12 million, representing 12% of the total settlement. While a standard payout is between 15-30%, the State Attorney General stated the lower share was due to the prior investigation into similar practices.

“Qui tam lawsuits are critical for uncovering fraud that might otherwise go undetected,” explained a legal expert specializing in whistleblower litigation. “They empower individuals with inside knowledge to hold powerful entities accountable.”

A Closer Look at the Financial Impact

Horizon BCBSNJ, New Jersey’s largest health insurer with an estimated annual revenue of $2.2 billion, is a significant player in the state’s healthcare landscape. While the $100 million settlement is substantial, analysts believe the financial impact on the company will be manageable. However, the settlement, combined with a separate $1.25 billion conversion payment for its non-profit status, is drawing increased attention to the insurer's financial operations.

“The state is benefiting from multiple financial streams from Horizon right now,” noted an industry observer. “This raises questions about the long-term sustainability of the insurer’s business model.”

Implications for the Healthcare Industry

The Horizon settlement underscores the growing scrutiny of pricing practices within the healthcare industry. The case highlights the potential for conflicts of interest and the need for greater transparency in negotiations between insurers, providers, and pharmacy benefit managers (PBMs).

“This settlement should serve as a wake-up call for the entire healthcare industry,” stated a healthcare policy analyst. “We need to move towards a more transparent and equitable system where costs are justified and patients are protected.”

Looking Ahead

The State of New Jersey will utilize the $88 million recovered from the settlement to fund vital public programs. The case is expected to prompt further investigations into pricing practices within the healthcare industry and strengthen the enforcement of whistleblower protection laws.

“This is not just about recovering lost funds,” concluded a source within the Attorney General’s office. “It’s about ensuring that taxpayer dollars are spent responsibly and that the healthcare system operates with integrity.”

Horizon BCBSNJ declined to comment beyond a brief statement acknowledging the settlement and reaffirming its commitment to compliance with all applicable laws and regulations.