Horizon Blue Cross Blue Shield of New Jersey

Horizon Blue Cross Blue Shield headquarters in Newark. (Matt Smith | For NJ Advance Media)

As part of a civil lawsuit alleging wage discrimination, a long-time Horizon Blue Cross Blue Shield executive who left the company last year alleges the insurance giant "knowingly and systematically" underpaid claims.

Kim Dans, 50, of Farmingdale, alleges the company "turned a blind eye" to the practice because it knew few members would contest the underpayments.

Dans worked for the company for more than two decades rising through the ranks until a pay dispute and concerns about accounting problems put her at odds with her supervisor, according to the lawsuit.

According to the lawsuit, Dans she witnessed several violations of state regulations, including:

The company refused to correct a computer programming error that led to the chronic underpayment of claims.

The company routinely denied two types of patient claims - those for emergency care and those involving a pre-existing condition - on the premise that only a fraction of customers would fight the denial.

The company was alerted about upcoming state audits.

The Newark-based insurer of 3.8 million New Jerseyans vigorously denied the accusations.

"Horizon is the largest, most scrutinized and most regulated health insurer in New Jersey with a national reputation for excellence," a spokesman said. "Unfortunately, we are sometimes sued by individuals who make dramatic accusations hoping to extract a settlement. The unsubstantiated allegations made here simply have no merit."

The lawsuit, filed in Superior Court in Essex County last month, details a career at Horizon that began in 1987. She proceeded up the corporate ladder until she was promoted to Senior Director of the Service Division, according to the lawsuit.

When she complained she was paid less than her predecessor, she says someone from Human Resources told her, "In this culture, women do not talk about salaries," according to the lawsuit.

Dans said her supervisor was "livid" after she reported the alleged problems to management, and said she was advised by Human Resources to "hide in the Wall office" and to "stay under the radar," according to the lawsuit.

Friction between her and her supervisor continued, according to the lawsuit, with her supervisor eventually telling her, "You're dead to me."

Dans resigned a year ago, and claims she was "constructively discharged," a legal term indicating she left the job because treatment of her was intolerable.

Employment law expert David Zatuchni, of Zatuchni & Associates, Lambertville, said in order for an employee to walk away from a job and still seek damages for discriminatory treatment, the employee must prove "a reasonable person could not tolerate working in these conditions." A judge or jury would determine if that standard had been met, based on each case's facts.

"It is a high standard, and it's meant to be a high standard," he said. "You can't just up and quit because you're not happy about how you're being treated," and still seek damages.

Although nothing in Dans' lawsuit indicates she told state regulators about her concerns, New Jersey's law protecting "whistle-blowers" does not require an employee to alert anyone outside the company about concerns, Zatuchni said.

Dans is seeking money for damages to her reputation and earnings. The insurance company has not yet filed its legal response to the suit.

The N.J. Division of Banking and Insurance, the agency responsible for overseeing insurance companies, did not respond to an inquiry about Dans' claim that Horizon was given advanced knowledge of upcoming audits.

Kathleen O'Brien may be reached at kobrien@njadvancemedia.com. Follow her on Twitter @OBrienLedger. Find NJ.com on Facebook.