A jury has determined that Blue Cross and Blue Shield of Louisiana shortchanged a New Orleans-based surgical center by more than $400 million, according to a Sept. 24 report from NOLA.com.
The jury determined the payout following a seven-year legal fight between the insurer and St. Charles Surgical Hospital and Center for Restorative Breast Surgery, a privately owned surgical center.
BCBS Louisiana was accused of shortchanging the center on thousands of breast reconstruction surgeries. The jury determined that BCBS committed fraud when it authorized around 7,800 surgeries from 2015 to 2023 and then paid only about 9% of the related claims.
The state civil court verdict was the surgery center's third attempt to seek payment, after two previous cases were dismissed in federal court.
According to court documents, BCBS denied that it acted fraudulently, arguing that because the hospital is not a member of its provider network, it had no contractual obligation to pay anything.
In Louisiana, about 93% of all physicians and hospitals belong to the BCBS network, according to the report.
"While we appreciate and value the legal process, we strongly disagree with the jury's verdict. We will quickly appeal and expect to be successful," a BCBS Lousiana spokesperson told Becker's in a statement. "Our mission is to improve the health and lives of Louisianians. Part of that mission is to work with network providers to offer high-quality care at fair reimbursements, ensuring our members access to affordable, quality care. Unfortunately, verdicts like this contribute to increasing healthcare costs for Louisianians who depend on us every day."
St. Charles Surgical Hospital, founded in 2003 by Frank DellaCroce, MD, and Scott Sullivan, MD, is not part of the BCBS network after they had opted out over a decade ago. The surgery center treats about 1,000 cancer patients a year.
Drs. DellaCroce and Sullivan separated from BCBS in 2007, alleging that reimbursement rates were too low. In the following years, the hospital continued to treat BCBS patients because the surgeries were authorized by the insurers, but the surgeons only received a fraction of the charges they billed, Dr. Williams told the jury.
BCBS argued that authorizing a treatment does not guarantee payment. The $421 million award is one of the largest ever in a state that is known for large jury awards, according to the report.
"Health plans will be forced to pay out-of-network non-negotiated providers. And that means whatever that they would like to charge," Jeff Drozda, CEO of the Louisiana Association of Health Plans, told WDSU. "You will have other providers across the state regardless of what health plan it is. And they're going to be looking at the opportunity to bill similar charges for claims reimbursement."