State Extends Controversial Benefits Contract

Rewarding incompetence puts New Jersey in the lead for the 2023 World’s Dumbest Plan Sponsor Award. Their crowning achievement to date, reaching the world’s highest pinnacle of incompetence, is the case where a hospital billed $674,856 for a patient’s hospital stay, but the state’s health plan paid over $2 million to the provider instead.

New Jersey extends controversial state employee benefits contract with Horizon BCBS

New Jersey has extended its employee benefits contract with Horizon BCBS despite state officials and media reports alleging that previous contract terms have not been upheld by the payer, Bloomberg reported Jan. 4.

New Jersey has extended its employee benefits contract with Horizon BCBS despite state officials and media reports alleging that previous contract terms have not been upheld by the payer, Bloomberg reported Jan. 4.

Horizon’s contract is worth about $136 million annually and provides health coverage to 600,000 state employees, retirees and their dependents.

In the new contract, the state won’t pay as much in exchange for reduced services, specifically removing a care price comparison tool for employees.

According to a Bloomberg report from June, the former state employee who oversaw the health plan alleged in 2021 that Horizon never provided the navigation tool worth $34 million — a complaint that Horizon “disagrees with and has responded to.”

In December, Bloomberg obtained records showing the state sometimes paid hundreds of thousands of dollars over what hospitals charged for a single hospital stay. 

In one case, a hospital billed $674,856 for a patient’s hospital stay, but the state’s health plan paid over $2 million to the provider.

“It all boils down to when a normal, prudent person should question the mental capacity of a party to a contract.”