Dallas-based McKool Smith and New Jersey Attorney General Matthew J. Platkin announced Friday that Horizon Healthcare Services Inc. has agreed to pay $100 million to settle a lawsuit McKool Smith filed in 2021 on behalf of several whistleblowers.
The whistleblowers — who served as relators in the litigation — include Christin Deacon, Kevin Lyons, Pat Colligan, Marc Kovar, Mark Flores, and Vince Flores.
The suit, brought under the qui tam provisions of the federal False Claims Act and the New Jersey False Claims Act, alleged that Horizon defrauded the New Jersey State Health Benefits Program and the State Employee Health Benefit Plan.
“This case involved allegations of a multi-year scheme by Horizon to take New Jersey taxpayer money from State employee and school health benefit plans,” McKool Smith principal Jon Corey said in a news release.
Corey and McKool Smith principal David Schiefelbein represented the relators in the case.
The allegations concern Horizon’s role in administering medical benefits for hundreds of thousands of New Jersey government employees. Horizon allegedly submitted false funding claims to the state for years, costing taxpayers hundreds of millions of dollars.
“We applaud our clients for raising the flag on Horizon’s misconduct and thank New Jersey Attorney General Platkin and the excellent lawyers in his office who joined us in holding Horizon accountable,” Schiefelbein added in the release.
Platkin expressed gratitude to the legal team and said that they “will not hesitate to hold accountable anyone who breaks the law and harms our residents, no matter how big or powerful you are.”
“At a time when everyone is rightly concerned about the cost of their healthcare, it is simply unacceptable that an insurance company would seek to defraud our State and overcharge us while driving up the costs of healthcare for hundreds of thousands of dedicated public servants,” Platkin said in a news release.
New Jersey State Treasurer Elizabeth Maher Muoio also expressed gratitude to her office’s Division of Pensions and Benefits for its investigation the past four years.
“The Division has been, and continues to be, laser-focused on enforcing its contracts and ensuring that our health benefits plans and our members are protected,” Maher Muoio said in the release.
The $100 million payment shall be made to the state within 25 calendar days of the agreement’s effective date.
As part of the settlement terms, the state agreed to pay $12 million to be split among five of the six relators who filed the qui tam complaint.
The state declined to provide any portion of this relator’s share to a former assistant director of health benefits at the DPB, Christin Deacon, who was the DPB administrator for the 2020 contract and had become aware of Horizon’s allegedly fraudulent conduct during the course of her duties at the DPB. In addition, this relator’s share amount is less than the statutory share because the state was unable to find support for the relators’ allegations beyond those New Jersey was already investigating prior to the filing of the relators’ lawsuit.
“The outgoing Attorney General’s statements continue a disturbing pattern of significantly mischaracterizing and distorting facts to falsely allege intentional wrongdoing where none exists. This has never been anything more than a straightforward contract dispute — one that Horizon tried to resolve in good faith more than four years ago in the same way it has resolved similar disagreements over the course of our long and fruitful partnership with the State: through a negotiated reimbursement,” Horizon said in a statement to The Texas Lawbook.
“The Attorney General instead chose to waste time and taxpayer resources to achieve the same outcome and now tries to justify his decision to turn a contract dispute into a media circus by hurling loaded, false and dangerous accusations at Horizon for his personal and political benefit. This is particularly disappointing as Horizon entered this agreement in the spirit of good faith and partnership that has always defined our relationship with the State.”
Horizon added that the settlement resolves a contractual dispute over “how a relatively small number of claims should have been paid.”
“The fact is that Horizon had been in discussion with the State since 2021 to resolve this dispute and made significant financial offers to the State to address disputed claims. By 2023, we had fully addressed the underlying issues that led to the dispute and in 2024 were again chosen through competitive bid as an administrator of SHBP and SEHBP benefits,” Horizon said in its statement.
Horizon said that it will continue working with New Jersey.
“While Horizon’s interpretation of one aspect of the contract differed from the State’s, the settlement makes clear Horizon never retained any portion of monies charged to the State for healthcare provider claims,” Horizon said in its statement. “Horizon paid claims we processed for the State according to the contracts in place with the doctors and hospitals filing those claims.”
Windels Marx partner Craig Murphy represented Horizon. He did not immediately respond to a request for comment.
The case was filed in the United States District Court for the District of New Jersey.
The case is Kevin Lyons; Christin Deacon; Patrick Colligan; Marc Kovar; Mark Flores; and Vince Flores, on behalf of the United States of America and the State of New Jersey v. Horizon Healthcare Services Inc. d/b/a Horizon Blue Cross Blue Shield of New Jersey, 2:21-cv-20188.