Hospital gets $421m ‘landmark’ verdict after insurer found to underpay claims | US healthcare

The movement to hold US medical insurers to account scored a notable legal victory recently when a Louisiana civil court jury ordered the state’s most prominent health insurance company to pay up more than $400m after underpaying claims to a surgery center that often works with cancer patients.

But the insurer – Blue Cross Blue Shield (BCBS) of Louisiana – has vowed to seek to reduce, if not entirely eliminate, the jury’s award to the St Charles Surgical Hospital and Center for Restorative Breast Surgery on appeal. BCBS can ask both the state’s fourth circuit court of appeal as well as the Louisiana supreme court for relief.

Nonetheless, a co-founder of the hospital hailed the 20 September verdict in his facility’s favor as a “landmark” win “for all those who have felt bullied by big corporate health insurance and the self-serving things they do”.

“We work the long hours, we pioneer advancements, we take care of these women – and we fought back for those who work on the frontline and the patients who depend on them,” Dr Frank DellaCroce told WDSU, the New Orleans NBC affiliate.

As the New Orleans CBS affiliate WWL Louisiana noted, surgeons at the hospital that DellaCroce founded with Dr Scott Sullivan sued BCBS in 2017, alleging that the insurer had not reimbursed them for 9,000 procedures that had been previously authorized over the course of 10 years.

“Blue Cross either slow paid, low paid, or no paid all of those bills,” the hospital’s lead attorney, James Williams of the New Orleans-area Chehardy Sherman Williams law firm, said to WWL.

Named after the renowned New Orleans avenue on which it sits, the St Charles Surgical Center opted out of the BCBS insurance network prior to the dispute. Williams contended that BCBS’s lack of reimbursement was meant to pressure the facility into joining the company’s network, to which the vast majority of Louisiana’s medical service providers belong.

The insurer countered that authorization of a procedure did not mean payment had been guaranteed, as New Orleans’ Times-Picayune newspaper reported. But a jury ultimately voted 11-1 that BCBS owed the hospital more than $421m in reimbursements for unpaid claims.

The St Charles hospital sought only to be made whole for unpaid claims. Its doctors had refused to pass the uncovered costs of the procedures on to patients, and they plan to pay off patients’ balances with the jury’s award.

BCBS issued a statement to multiple news outlets saying it “strongly” disagreed with the jury’s decision, which led to one of the largest ever such awards in Louisiana. The company’s statement predicted letting such an award stand would lead to higher insurance premiums, saying that “verdicts like this contribute to increasing healthcare costs for Louisianans who depend on us every day”.

“We will quickly appeal and expect to be successful,” the insurer’s statement said.

Meanwhile, the chief executive officer of the Louisiana insurance industry’s trade association echoed BCBS’s position. Jeff Drozda of the Louisiana Association of Health Plans told WDSU that the verdict – if left in place – would force health insurers “to pay out-of-network, non-negotiated providers … whatever they would like to charge”.

“You will have other providers across the state, regardless of what health plan it is … looking at the opportunity to similar bill charges for reimbursement,” Drozda said to the station.

As for the plaintiffs, Williams’ partner, Matthew Sherman, said to WDSU: “The jury’s finding of misconduct … shows that the legal system will not allow [BCBS] of Louisiana to put its self-interest ahead of that of its patients.”

“Physicians and patients have a right to expect [BCBS] of Louisiana to uphold their promise to provide fair and accurate payment for services.”

The US is the only wealthy democracy that lacks universal healthcare coverage, and Americans rely predominantly on employer-sponsored private health insurance from companies like BCBS.