Medical Professionals Secure Victory in Insurance Company Fraud Litigation
Louisiana-based doctors win $421 million lawsuit against Blue Cross and Blue Shield of Louisiana following refusal to pay for approved surgeries
In 2017, Witney Arch, a Louisiana resident, experienced chest pain after her toddler accidentally struck her breast. After a series of medical visits and tests, she was diagnosed with early-stage breast cancer, which her doctors warned could be aggressive. By the new year, Arch had decided to undergo a double mastectomy and chose The Center for Restorative Breast Surgery in New Orleans for her procedure. Blue Cross and Blue Shield of Louisiana, her insurer, authorized the surgery, but days before the operation, the company suggested she seek treatment elsewhere, citing cost concerns.
Arch persisted with her original plan and went through five surgeries over the following year. Little did she know that her case would become central to a long-standing legal battle between the insurer and the surgical center's founders, Dr. Frank DellaCroce and Dr. Scott Sullivan. The doctors had accused Blue Cross of approving procedures but failing to pay, either partially or not at all. Additionally, they claimed the company used calls like Arch's to discourage patients from seeking care at the Center for Restorative Breast Surgery.
Internal documents and testimonies later revealed a pattern of behavior where Blue Cross weighed and decided both the rules and the outcomes. The insurance company operates as the dominant provider in Louisiana, under contract with the majority of doctors and hospitals. However, DellaCroce and Sullivan had declined to be part of this network, stating that the offered payments would not cover their expenses. Consequently, their center remained out-of-network, meaning it charged full price. Blue Cross, in turn, set its own payment amounts, typically much lower.
The doctors sued Blue Cross, uncovering internal documents indicating they had been on a special scrutiny list since 2007. Their bills were examined manually, and their cases were flagged, even if patients had received prior authorization. Furthermore, their cases were placed on a "blocked" list, which meant Blue Cross might still decline payment even with prior authorization.
After nearly two decades of legal fights, the case came to trial in 2024. The trial exposed how appeals filed by the center went unreviewed by Blue Cross. When asked about this, a Blue Cross executive admitted that underpayment appeals were not a priority.
The jury sided with the doctors, awarding them over $421 million in damages for alleged fraud committed by the insurance company. One juror expressed the sentiment that a larger award might have been given if asked. As a result of Arch's painful journey and the subsequent trial, the hidden conflict between insurance companies and healthcare providers over control and profit has been brought to light.
Sources:
- Blue Cross Defrauded Breast Cancer Center, Must Pay $421M, Jury Finds
- How two New Orleans surgeons challenged an insurance giant's reluctance to cover patients' bills
- 2024-09-27 Jury Form with Verdict
- The battle between Blue Cross and Center for Restorative Breast Surgery over insurance payments also involved medical-conditions, such as cancer, as one Louisiana resident, Witney Arch, suffered from breast cancer and faced issues with Blue Cross reimbursement.
- The $421 million lawsuit against Blue Cross and Blue Shield of Louisiana, led by doctors Frank DellaCroce and Scott Sullivan, also shed light on finance matters, specifically the company's tendency to offer lower payments to out-of-network providers like the Center for Restorative Breast Surgery.
- The long-running dispute between Blue Cross and the Center for Restorative Breast Surgery also highlighted concerns about mental-health, as the doctors reported feeling disheartened by Blue Cross's tactics, which included deterring patients through false cost concerns. This negatively impacted the health-and-wellness of both patients and business operations at the center.
