COVID-19 Leads to Negative Net Profits for Horizon Blue Cross Blue Shield of New Jersey: A Warning to Providers

COVID-19 is producing mixed results for health insurance companies and their bottom line.  Amongst the worst performers in 2020 is Horizon Blue Cross Blue Shield of New Jersey (“Horizon”).  According to a recent report by Modern Healthcare, Horizon has seen its net income fall dramatically year to date for 2020.  The only Blue Cross/Blue Shield plan to have performed worse is Blue Cross and Blue Shield of Kansas City.

Many factors have contributed to the financial results; however, the constant theme amongst all the Blue plans was reduced spending on healthcare benefits during the pandemic.  The one consistent area of spending growth was in general administrative expenses, which grew $12.9 billion total across all Blue plans, representing a 44% increase over 2019.  There are expectations that the coming year could bring about higher healthcare spending as beneficiaries begin to seek treatments that were deferred due to the pandemic. However, with the coming of the second waive of the pandemic, the forseeable future remains uncertain.

A negative net income for Horizon is cause for concern for providers as we look ahead to 2021 and beyond, as Horizon will likely seek alternative ways to recoup some of its losses.  One alternative may include more aggressive auditing and overpayment demands, which will add extra stress to a profession that has seen declining revenue due to the pandemic.  Horizon could also change policies regarding reimbursements, either by limiting certain procedures/tests to specific sub-specialties (e.g., allergy testing limited to allergists) or outright denying reimbursement for a particular service.

Providers should take proactive measures to lower the risk of a large overpayment demand by engaging in a “self-audit” and correct any hidden coding and documentation issues.  Compliance in the coming year will be crucial, but if done right, could be a source of revenue as well.

How Frier Levitt Can Help

Frier Levitt has attorneys experienced in defending audits and overpayment demands, as well as creating compliance plans.  Our attorneys have assisted providers in conducting self-audits and guiding them through the labyrinth of coding issues and regulatory compliance issues that are constantly changing.  Contact Frier Levitt today to discuss how a compliance plan can help your practice avoid a potential large overpayment demand.

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