Jersey City BOE sues Horizon over alleged ‘threat’ to stop paying claims for 14,000 employees

The Jersey City Board of Education filed a lawsuit against the district’s health insurance network last week, alleging it threatened to stop paying healthcare claims for approximately 14,000 district employees. Horizon Healthcare Services, which manages the district’s insurance claims, was planning to stop processing all claims on Nov. 25 after […]

The Jersey City Board of Education filed a lawsuit against the district’s health insurance network last week, alleging it threatened to stop paying healthcare claims for approximately 14,000 district employees.

Horizon Healthcare Services, which manages the district’s insurance claims, was planning to stop processing all claims on Nov. 25 after an ongoing disagreement about payment, according to the lawsuit filed in Hudson County Superior Court.

A judge granted a temporary restraint on Nov. 24, protecting the insured until at least Dec. 17. Horizon has until Dec. 9 to issue a written response to the lawsuit.

The Board of Education contends the insurance company used a bullying tactic to get the district to pay fees that the two parties have been negotiating for a year. Horizon denies the allegation.

“The judge did make the right decision in granting the temporary restraints,” said Khaled J. Klele, the attorney for the Board of Education.

The lawsuit alleges Horizon has been an unfair partner in the past by not complying with a district request to change its out-of-network fee schedule to a lower rate and charging “hidden fees.”

If it had stopped processing claims, any claims that healthcare providers submitted on behalf of the district’s insured members would have gone unpaid. The lawsuit alleges that meant 14,000 Jersey City Board of Education employees would effectively be left uninsured.

“At no time did Horizon ever threaten to terminate the BOE’s coverage and Jersey City Board of Education employees should know that their coverage has remained in place, uninterrupted, while we continue to work with Board staff to resolve the issues preventing them from paying the charges owed under their existing contract,” said Thomas Vincz, public relations manager for Horizon Blue Cross Blue Shield New Jersey.

But the lawsuit alleges this was not the first time Horizon threatened to cut certain services as conversations about unpaid dues lingered or were postponed. Last December, the insurance giant said it would terminate the board’s agreement with Horizon if fees remained unpaid, according to the suit.

The case was first reported by Hudson County View.

The discussion that led to the alleged threat began about a year ago when Horizon informed the district it was charging a fee for repricing out-of-network claims, one that is not included in the parties’ existing administrative services agreement. It would have cost the district more than $1 million, and the district did not pay it, according to the suit.

Negotiations have continued since then, emails show.

Recently, Horizon told the Board of Education to pay $3.6 million in outstanding costs by Nov. 25 or it would stop processing claims, according to an email included in the lawsuit as a legal exhibit.

“It has been about a year since these issues first arose and Horizon is no longer willing to extend this out any longer,” Arpita Bathani, Horizon Blue Cross Blue Shield of New Jersey’s assistant general counsel, wrote in a Nov. 12 email to Klele. “We are asking to meet for one hour before November 25, 2020 and if that cannot be accommodated we will take steps to place JCBOE on pend status until the matter is resolved.”

Bathani sent the email as the two attorneys were working to schedule a meeting date, which Klele said the Board of Education could not accommodate until December.

“Without this relief, Horizon’s sharp tactics would cause significant irreparable harm by effectively leaving over 14,000 people without medical coverage and access to medical care during the COVID-19 pandemic and while New Jersey is experiencing a second wave,” the lawsuit says.

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