Plaintiff lawyers are making another attempt at a class-action suit accusing Horizon Blue Cross Blue Shield of an illegal scheme to cut reimbursements to certain health-care providers — and this time they claim to have a smoking gun.
The amended complaint, in Edwards v. Horizon Blue Cross Blue Shield of New Jersey, 08-cv-6160, filed Jan. 30 in federal court in Newark, is the latest salvo in a seven-year-long litigation alleging New Jersey’s largest health insurer under-reimbursed ambulatory surgery/surgical centers outside its provider network.
A proposed $22 million settlement of consolidated similar suits won preliminary approval in October 2010 but fell through when more than 60 percent of the roughly 150 class members refused to be part of it.
With the litigation going forward, the plaintiffs obtained leave to file an amended complaint.
The latest filing includes as exhibits a June 2003 business plan titled "Ancillary Services Out of Network Ceiling," and emails discussing the plan that were turned over in discovery.
Horizon allegedly decided in 2003 that it wanted to save a certain amount of money in reimbursing out-of-network ambulatory care centers and hired a company called Navigant to prepare a new database that would realize those savings, "without regard to the levels of reimbursement that applicable laws, regulations and terms of health benefit plans require Horizon to pay."
The plan acknowledged legal exposure was a risk.
Due to a protective order issued on Jan. 11 by U.S. Magistrate Judge Michael Hammer, the version of the amended complaint accessible to the public is heavily redacted where it discusses the documents, and large portions of the documents themselves are blacked out.
Hammer denied Horizon’s request to redact completely the versions of the complaint and exhibits that were posted on PACER and to partly redact those that were sent to the U.S. Departments of Labor and Treasury, as required for claims against ERISA fiduciaries.
"We have uncovered pretty blatant wrongdoing," says class counsel Bruce Nagel, of Nagel Rice in Roseland. "We believe the federal agencies are obligated to take a hard look at what they’re doing." The federal government could decide to take over the case, he says.
The amended complaint replaces the original class representative, Glen Ridge SurgiCenter, which settled with Horizon, allegedly induced by being allowed to become an in-network provider. In November 2011, U.S. District Judge Jose Linares held that Glen Ridge settled only its own claims and that the case could go forward with a new named plaintiff. North Jersey Ambulatory Surgery Center and Roxbury Surgical Center are the named plaintiffs in the current complaint.
Horizon’s lawyers, Edward Wardell of Connell Foley in Cherry Hill, and B. John Pendleton Jr. of DLA Piper in Florham Park, decline comment.
Thomas Vincz, Horizon’s public relations manager, says, "The amended complaint by the class attorneys is old information repackaged. The class attorneys are presenting no documents that are new to the case since it was last presented to the courts for settlement more than two years ago.
"Horizon BCBSNJ is confident that the new plaintiffs in this case are not adequate class representatives because, among other things, they were not in operation during the period of the alleged under-reimbursements."
The $22 million settlement that won preliminary approval in 2010 would have paid about a third of it to class counsel at Nagel Rice in Roseland and West Orange’s Lampf Lipkind Prupis and Petigrow. Nagel says the agreement was worth an additional $50 to $75 million per year for three years, during which class members would have received higher rates of reimbursement.
Horizon has nearly 59 percent of the market share for small employer health insurance policies in New Jersey, nearly 54 percent for large employer plans and almost 79 percent of the individual policy market, according to Marshall McKnight, a spokesman for the New Jersey Department of Banking and Insurance.