Horizon Blue Cross Blue Shield of New Jersey Inc. has agreed to settle a class action lawsuit that alleges the insurer inadequately reimbursed subscribers for out-of-network services.
Under the terms of the proposed Horizon Blue Cross class action settlement, Horizon will stop using the Ingenix database for the calculation of out-of-network (ONET) claims for covered services for the bulk of Horizon plans. The insurer also agreed to revise the language for all plans sold or renewed by Horizon to more accurately reflect the way reimbursement rates are calculated for ONET claims. Horizon will also update its member handbooks, marketing materials, member portal and website with similar information.
Plaintiff Cathleen McDonough initially filed the Horizon Blue Cross class action lawsuit against Horizon in 2009, claiming that the insurer systematically under-reimbursed Horizon subscribers because the insurer relied on the flawed Ingenix database or a flawed reimbursement schedule to calculate benefits. She accused the company of violating the Employee Retirement Income Security Act (ERISA) by making ONET determinations based on “unauthorized and undisclosed rules.”
Psychologist Barry Helfmann and the New Jersey Psychological Association filed a similar class action lawsuit, alleging that psychologists were systematically under-reimbursed by Horizon for their services. Because the two actions were consolidated, the class action settlement would resolve both disputes if approved.
The parties seek preliminary certification of two sub-classes for class action settlement purposes. The first is a sub-class comprised of all persons enrolled in a Horizon health plan since Feb. 9, 2003, that includes an ONET benefit. The second is a subclass of all ONET health care providers who are not licensed medical doctors or doctors of osteopathy who provided Horizon subscribers with covered services since Feb. 9, 2003, but were paid less than their billed amount for these services.
According to a brief submitted by the plaintiffs, the class action settlement will affect millions of Horizon insurance plan members and out-of-network providers by granting proposed Class Members “significant declaratory and injunctive relief in the form of business reforms as well as the payment of fees and class representative payments.”
Horizon agreed to pay McDonough $20,000 and the New Jersey Psychological Association $15,000 under the terms of the proposed class action settlement agreement. Horizon also agreed to begin phasing out the Ingenix database 60 days after the judge approves the proposed class action settlement.
Notice to potential Class Members will be sent via U.S. mail and will be published in the Newark Star Ledger, The Courier Post, the Asbury Park Press and USA Today. A class action settlement website will also be established. Keep checking www.TopClassActions.com or sign up for our free weekly e-newsletter below for claim filing instructions.
The plaintiffs are represented by Bruce H. Nagel and Randee Matloff of Nagel Rice LLP.
The Blue Cross Out-of-Network Reimbursement class action lawsuit is McDonough, et al. v. Horizon Blue Cross Blue Shield of New Jersey Inc., Case No. 2:09-cv-00571, in the U.S. District Court for the District of New Jersey.
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Top Class Actions is a Proud Member of the American Bar Association
LEGAL INFORMATION IS NOT LEGAL ADVICE
©2008 – 2014 Top Class Actions® LLC
Various Trademarks held by their respective owners
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