Home Sections Education

Jersey City school board sues Horizon Blue Cross Blue Shield

Horizon disputes assertions it attempted to end coverage for 14,000 people

The suit, filed in Hudson County Superior Court, seeks compensatory damages, attorney fees, and more.

The Jersey City Board of Education has filed a suit against the district’s medical insurance administrator, claiming it attempted to end coverage for thousands of district employees during the second wave of the COVID-19 pandemic.

According to the suit filed in Hudson County Superior Court on Nov. 23, Horizon Blue Cross Blue Shield is responsible for administering JCBOE’s self-funded medical plan with set monthly fees for roughly 14,000 people.

The board claims that Horizon has breached its contract by refusing to adjust out-of-network (OON) fee schedules for Medicare and Medicaid causing the school board to incur “millions of dollars in losses.”

Horizon also allegedly charged various “hidden fees” as well as a 25 percent fee for repricing out-of-network claims.

According to the suit, the agreement between the board and Horizon doesn’t state that Horizon is entitled to charge a 25 percent fee for repricing these claims, and as such, the school board has refused to pay them, leading to negotiations between the two entities for roughly a year to resolve the dispute.

According to the suit, the out-of-network claims that Horizon has processed in connection with the plan amount to $56,961,171, which makes up approximately one-third of all claims that Horizon has processed. Horizon has allegedly denied the school board’s request for an audit of the processing of these claims.

Ultimatum issued

Now, after the school board attempted to reschedule a Horizon requested meeting, Horizon instead issued an ultimatum, with Horizon allegedly demanding in a Nov. 17 email that the school board pay $3,359,033.93 by Nov. 25, or Horizon would stop processing all claims.

“Horizon’s hypocrisy in making the ultimatum is glaring, given that Horizon failed to provide information to JCBOE for nearly two months …and has refused to comply with JCBOE’s audit requests,” states the suit. “In addition, the amount that Horizon is demanding …is grossly overstated as the disputed OON Claim Repricing Fee is only $1,159,844.41. JCBOE has not violated any provisions of the agreement, and, aside from the fees in dispute, is current with its payments to Horizon.”

The court ordered preliminary restraints on Nov. 24 as well as ordered Horizon to submit to an audit, but, according to court documents filed by Horizon attorneys on Dec. 1, Horizon disputes the school board’s claims stating the board was “dishonest” in its filing.

In the Dec. 1 filing, Horizon states the school board “blatantly mischaracterized” the agreement “and misrepresented that, absent temporary restraints, thousands of individuals would ‘lose medical access in the middle of a pandemic’.”

Horizon seeks to end the temporary restraints, to not be forced to comply with an audit or disclose documents demonstrating how Horizon determines the repricing fee and hidden fees, including documents demonstrating Horizon’s costs in repricing and negotiating out of network claims for the school board.

In the Dec. 1 filing, Horizon claims the school board “slipped additional language” requiring Horizon to comply with an audit and “produce far-reaching documents.”

Horizon further argues that it has the right under the agreement to pend claims based on school board’s nonpayment of the disputed fees.

“Horizon’s decision to pend claims, after a year of non-payment and delays by JCBOE, is expressly permitted under the terms of the Agreement and would not have resulted in any ‘loss of coverage’ or ‘disruption in medical access’ for the JCBOE teachers or their families,” states Horizon in the Dec. 1 filing.

The school board’s suit seeks to have a judge determine that the board is not required to pay the repricing fees or hidden fees as well as compensatory damages, attorneys’ fees and costs of suit, and any other relief the court deems just and equitable.

For updates on this and other stories check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Marilyn Baer can be reached at Marilynb@hudsonreporter.com.


Exit mobile version