NJ Lands $100M Settlement with Horizon Blue Cross in Fraud Case

Trenton, NJ – November 14, 2025 – The State of New Jersey has secured a $100 million settlement with Horizon Blue Cross, resolving allegations of fraudulent overbilling of healthcare claims for state employees and beneficiaries. The settlement, announced yesterday, marks the largest non-Medicaid False Claims Act recovery in state history and shines a light on the complexities of self-funded health plans and the potential for abuse.

The lawsuit, initiated by whistleblowers under both state and federal False Claims Act provisions, alleged that Horizon intentionally overcharged the state for healthcare services rendered under its administration of the State Health Benefits Program (SHBP). The state intervened in the lawsuit, conducting a thorough investigation that reportedly uncovered a pattern of inflated claims and improper billing practices.

“This settlement sends a clear message that we will not tolerate fraudulent activity that drains taxpayer dollars and drives up healthcare costs,” stated a representative from the New Jersey Attorney General’s Office. “Horizon Blue Cross engaged in a systematic scheme to overcharge the state, and we are pleased to have recovered these funds for the benefit of New Jersey residents.”

The Core of the Allegations

The complaint alleges that Horizon, acting as the administrator of a self-funded plan, fraudulently induced the State into a 2020 contract and then systematically overcharged for healthcare claims throughout the life of that contract. Specifically, the suit alleges Horizon caused the State Benefit Plans to pay more to providers than they were actually billed. The State argues that Horizon’s actions resulted in millions of dollars in unnecessary costs for taxpayers and contributed to the rising burden of healthcare expenses for public employees.

“The fact that this involved a self-funded plan is crucial,” explains a healthcare finance expert who requested anonymity. “With self-funding, the employer – in this case, the state – assumes the financial risk for healthcare claims. That makes it particularly vulnerable to overbilling and fraud, as the money is coming directly from public funds.”

Rising Healthcare Costs and the SHBP

The settlement arrives at a critical time, as healthcare costs continue to climb and strain state budgets. The SHBP, which provides coverage to hundreds of thousands of public employees, retirees, and their families, has experienced significant premium increases in recent years. For Plan Year 2025, a 9.9% increase was recommended, and the projected increase for Plan Year 2026 is a staggering 20.5%. Factors contributing to these increases include medical inflation, expensive prescription drugs, and increased utilization of high-cost services.

“We've been warning for years about the unsustainable trajectory of healthcare costs,” said a representative for the state employee union. “This settlement, while welcome, is just one piece of the puzzle. We need comprehensive reforms to address the underlying drivers of these costs and ensure affordable healthcare for all New Jersey residents.”

A Pattern of Healthcare Fraud?

The Horizon settlement is not an isolated incident. Healthcare fraud remains a pervasive problem across the United States, costing taxpayers billions of dollars annually. According to the Department of Justice, healthcare fraud cases often involve a variety of schemes, including billing for services not rendered, upcoding (billing for more expensive services than those actually provided), and kickbacks.

Several recent cases bear striking similarities to the Horizon settlement. In New York, Independent Health Association agreed to pay up to $100 million to settle allegations of fraudulent billing practices. Similarly, Lincare Holdings Inc. settled for $29 million for fraudulently billing Medicare Advantage and Part B. These cases highlight a pattern of abuse within the healthcare industry, particularly among companies administering self-funded health plans.

“What we’re seeing is a trend,” explains a legal expert specializing in False Claims Act litigation. “Companies are incentivized to inflate claims to increase their profits, and they often get away with it because the system is complex and opaque. Whistleblower lawsuits and aggressive government enforcement are essential to deterring this type of behavior.”

Implications for the Future

The Horizon settlement is expected to have several implications for the future of healthcare in New Jersey. First, it will likely prompt increased scrutiny of self-funded health plans and the billing practices of their administrators. Second, it may lead to calls for greater transparency and accountability within the healthcare system. Third, it could encourage other states to pursue similar legal action against companies engaged in fraudulent billing practices.

“This is a wake-up call,” said a representative from the state Treasury Department. “We need to be vigilant in protecting taxpayer dollars and ensuring that healthcare providers are held accountable for their actions.”

The settlement agreement requires Horizon to implement several corrective measures to prevent future instances of overbilling. These measures include enhanced internal controls, increased training for employees, and regular audits of billing practices. Horizon has not publicly commented on the specific details of the settlement but has stated that it is committed to complying with all applicable laws and regulations.

While the $100 million recovery is a significant victory for the state, experts warn that it is only a partial solution to the problem of rising healthcare costs. Addressing the underlying drivers of these costs will require a comprehensive and sustained effort involving policymakers, healthcare providers, and insurance companies. The Horizon settlement serves as a reminder that vigilance, transparency, and accountability are essential to protecting the financial health of the state and ensuring that all New Jersey residents have access to affordable, quality healthcare.