Horizon Blue Cross Partner Company Settles Class-Action Lawsuit With Chiropractors

Neither American Specialty nor Cigna, the insurer, admitted wrongdoing in the settlements. Besides the payments, the two defendants agreed to “take reasonable steps to implement certain business reforms,” according to the judge’s opinion approving the larger of the two settlements.

The New Jersey chiropractor who launched the litigation seven years ago said he and his colleagues questioned Horizon’s choice of partner, given the litigation.

“How does Horizon decide it wants to partner with a company that just went through this whole process … a major class action and all these allegations,” asked Dr. Steven G. Clarke, of High Street Rehabilitation in Nutley.

Clarke is a past president of the Association of New Jersey Chiropractors, which is fighting Horizon’s plan to transfer oversight of physical health benefits in New Jersey — including physical therapy, occupational therapy, and acupuncture, as well as chiropractic care — to American Specialty.

He and Dr. Donald C. DeFabio, of DeFabio Spine and Sport Rehab in Berkeley Heights, were the lead plaintiffs in the larger of the two cases, which settled for $11.75 million. That sum is to be divided among 26,000 providers and patients, with Clarke and DeFabio each receiving $10,000 for serving as class representatives.

The chiropractors’ association says American Specialty’s plans to evaluate whether treatment is “medically necessary” after some patients’ fifth visits will reduce the care the chiropractors provide. Their campaign has now generated more than 185,000 emails to Gov. Phil Murphy and lawmakers, the association said this week.

American Specialty sued the association last week over its campaign opposing the new partnership with Horizon. “There have been many false and misleading statements,” said Lisa Freeman, a spokeswoman for the company.

The settlement of the federal lawsuits in Pennsylvania did not require American Specialty to make any changes in its method of determining whether treatments are medically necessary, she said.

The company already manages physical health benefits for 140 health plans covering 36 million people — including 800,000 in New Jersey who have insurance through Cigna and Amerigroup.

Horizon is the state’s largest health insurer, with 3.7 million members. Of these, 2.5 million are in plans that would be affected by the partnership with American Specialty Health, and fewer than 400,000 made use of their physical health benefits last year, Horizon has said.

The arrangement with American Specialty “does not alter the terms in any way of any policy of any Horizon member, nor does it change the number of treatments included in any plan, nor does it create a different standard for reviewing the medical necessity of any treatment,” said Thomas Vincz, a Horizon spokesman.

When treatment is medically necessary and consistent with the medical policies that Horizon has had in place for years, he said, providers “should have no concerns.”

The Horizon contract with American Specialty Health must be approved by the state Department of Banking and Insurance. Horizon has announced that it will take effect on Jan. 1.

(Note: This article originally appeared in the September 9th edition of NorthJersey.com)

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