“Slow Pay, Low Pay or No Pay” by T. Christian Miller | ProPublica
Blue Cross denied payments for thousands of breast reconstruction procedures, but approved special deals for treatment for executives’ wives | April 12, 2026
Top Line Highlights
Blue Cross Louisiana approved mastectomies and breast reconstructions for women with cancer but refused to pay a hospital’s full bills. For some claims, it paid nothing.
Two New Orleans surgeons blew the whistle and challenged the denials.
Blue Cross denied payments for thousands of procedures involved in breast reconstruction. But it approved special deals for treatment for executives’ wives.
Of the 7,837 medical procedures in dispute in the lawsuit, involving 1,680 patients, Blue Cross paid about $43 million on invoices totaling $500 million. Some 60% of the claims weren’t reimbursed at all.
Verdict for White-Collar Crime: A jury found Blue Cross liable for fraud and awarded the hospital $421 million. The insurance company denied wrongdoing and has appealed.
Read the full investigative report here.
Listen to a summary of the case here:
This report is part of the ProPublica series, “Uncovered: How the insurance industry denies coverage to patients” – read more articles in this series
Read an excerpt>
Blue Cross and Blue Shield
It is one of the quirks of the American health care system that insurers almost never pay the prices for procedures demanded by doctors and hospitals.
To understand why requires a tour of the grand bargain at the heart of the health insurance system. Insurance companies negotiate with hospitals and doctors to discount reimbursements on medical procedures, like office visits or MRI scans. Providers who sign these contracts are in network. Insurance companies like in-network doctors because they can budget for health expenses and set premiums accordingly. Doctors and hospitals agree to be in network because they get a steady stream of insured patients.
DellaCroce and Sullivan held contracts with insurers that resulted in average payments to the center’s doctors in the $20,000 to $30,000 range. But DellaCroce and Sullivan never came to an agreement with Blue Cross. That made them an exception in Louisiana — the insurer is so dominant that 97% of local physicians and hospitals are in network. DellaCroce and Sullivan said the company was not offering them enough money — in some cases not even enough to cover the cost of the surgeries, they argued in court documents. The doctors and their hospital remained out of network, meaning they charged Blue Cross the full price for their procedures.
Such charges are controversial. Insurance companies and many health experts say they are too often inflated and untethered from actual costs. Physicians and hospitals say their fees are justified, reflecting the true price of medical care. In the end, insurers — especially in states like Louisiana, with few competitors — use their market power in negotiations to set reimbursements at what they want to pay, not what doctors charge.
At Blue Cross, Dwight Brower was charged with reviewing the bills from the breast center. He had worked as a physician at a small family practice in Baton Rouge and then at a local hospital before joining Blue Cross as a medical director. He helped oversee prior authorizations. While many patients assume that an approval means an insurer will pay for an operation, it is simply a recognition that a procedure is medically necessary. Federal law mandates that private insurers cover breast restorations for women who undergo mastectomies because of cancer or genetic risk. And patients, in general, are allowed to choose their own doctors.
However, since the center was out of network and had no contract with the insurer, Blue Cross determined how much it would pay for the treatment, and Brower believed that the breast center’s bills were exorbitant. “I did not think that they were reasonable,” he would later testify.
Surgeons doing lung transplants or brain surgery rarely billed Blue Cross more than $50,000 for their work. Why should DellaCroce and Sullivan get so much more? “Don’t get me wrong. The surgeons at the center are extremely skilled,” he acknowledged. The operations were often lengthy. “But so are open-heart surgeries,” he said. “Relative to some of the other extremely complicated surgeries done by other surgeons in other areas of the body, it just seemed like their fee schedule was extremely high.”
Blue Cross Louisiana executives testified that they did not even consider doctors’ invoices when making decisions on what to reimburse because such charges were “unregulated” and “nonstandard.” Instead, they paid “an amount we establish” — unless the doctor’s bill was cheaper. In the end, the insurer said it settled on reimbursing the breast center about the same as in-network doctors performing similar operations, even though DellaCroce and Sullivan did not benefit from having patients referred to them. In practice, that meant the insurer paid out a fraction of the breast center’s bills. Of the 7,837 medical procedures in dispute in the lawsuit, involving 1,680 patients, Blue Cross paid about $43 million on invoices totaling $500 million. Some 60% of the claims weren’t reimbursed at all. The difference between the bill and the payment could be striking. For example, in the case of Arch, Blue Cross paid $8,580 out of $102,722 for one operation. For another, it paid $3,190 out of $34,975.
Executives said the Blue Cross reimbursements were fair, designed to keep premiums low for the nearly 2 million Louisianans who depended on the insurer to cover their health care. Paying the breast center’s full fees would add to its customers’ burden, they said. “If we were to just agree to any rates or any prices set by physicians or any providers, it would cause cost to be exorbitantly high for both the plan and for members particularly, because we wouldn’t be able to forecast or make sure those plans are actually sound,” said Curtis Anders, the vice president of provider networks for Blue Cross. “Premiums would increase.”
For many out-of-network doctors, payments lower than their invoices are an infuriating part of doing business. They absorb the costs, or pass them on to their patients, a practice known as balance billing that can result in medical debt. DellaCroce and Sullivan were the rare physicians with the tenacity to fight. The center collected money from both insurers and patients — but it carried the unpaid portion of invoices on its books. That amount grew every year as it battled Blue Cross.
DellaCroce and Sullivan were convinced that Blue Cross had singled them out for their obstreperousness, but they had no proof. Then, during a phone call one day, an employee for the center was talking to a Blue Cross representative to obtain a prior authorization. The representative let slip that the request required special handling. The breast center’s doctors were flagged on an internal roster. It was called the targeted list.
Read the full investigative report here.
Additional Reading
Wall Street Journal | Trump Administration Retreats From White-Collar Criminal Enforcement: Justice Department backs away from some cases involving foreign bribery, money laundering and crypto markets; defense lawyers brace for slowdown by Dave Michaels, Richard Vanderford and James Fanelli | April 13, 2025
Support ProPublica here.