NJ hospital system sues Horizon for $76M; insurer threatens countersuit

gavel and books

A new lawsuit filed by a hospital system against Horizon Blue Cross Blue Shield of New Jersey adds another chapter to providers' history of pushing back against the state's largest insurer. 

This week, three hospitals operated by CarePoint Health filed a complaint against Horizon, claiming the insurer shortchanged the hospitals more than $76 million between June 2015 and Sept. 20, 2016. CarePoint claims Horizon has reimbursed the hospitals just a fraction of its “usual, customary and reasonable rates” for emergency and elective care.

The hospital system further claims that Horizon continues to underpay medical claims, amounting to approximately $4-6 million per week. Horizon countered by reiterating complaints about the system’s high rates, and told NJ.com it would file a countersuit.  

The issue traces back to a bitter back-and-forth between CarePoint and Horizon over in-network rates, which ultimately led the three hospitals to terminate their in-network status with the insurer in June 2015. Since then, CarePoint claims Horizon underpaid or refused to pay out-of-network claims, even for emergency care. Representatives of both organizations told NJ.com they are currently in mediation to sign a new in-network contract.

Horizon’s two-tiered Omnia network has previously drawn fire from providers for excluding some of the state’s largest hospitals, although New Jersey’s Attorney General has said and a state appellate court has ruled that the insurer’s network is legal.