A surgical hospital and doctors specializing in reconstructive breast surgery won a $421.5 million damages award last month against Blue Cross Blue Shield Louisiana, which was found to have been negligent for fraud and abuse of the plaintiffs’ rights.
An attorney representing the health care insurance provider said the verdict would be challenged on appeal.
Jurors in the New Orleans civil trial handed down their verdict on Sept. 20, concluding that the insurance provider underpaid doctors and health care providers who were not part of the Blue Cross Blue Shield network. The lawsuit filed by the St. Charles Surgical Hospital and Center for Restorative Breast Surgery LLC argued that the insurer concealed internal policies designed to significantly reduce payments and engaged in intimidation tactics.
In its defense, Blue Cross Blue Shield argued that its decision to authorize medical treatments involving the plaintiffs did not guarantee specific payment amounts. The insurer denied it had a specific reimbursement rate for medical providers outside of its network and said it negotiated payments with employers and brokers – a practice common in the industry and not an indication of fraud, according to the Jurimatic website, which reports on trial verdicts.
The insurer successfully defended itself against two similar legal actions brought by the New Orleans surgical hospital in federal court more than a decade ago.
The jury in the case that concluded in Civil District Court for the Parish of Orleans found that a preponderance of the evidence showed that Blue Cross Blue Shield committed fraud and violated the rights of the hospital under state statutes. The jury said the total compensation owed to the plaintiffs was $506.8 million, but since the insurer had already paid out about $85.3 million, the total damages amounted to $421,488,633.
“BCBSLA believes that there were several errors in the verdict,” Blue Cross Blue Shield of Louisiana’s attorney, Dennis Blunt of Phelps Dunbar LLP, told the Louisiana Record in an email. “Our clients plan to appeal. We look forward to vigorously defending BCBSLA during the appeal process to the end to get this right for our clients, their members, businesses in Louisiana and the industry as a whole.”
A BCBSLA statement provided to the Record said that though the insurance provider values the legal process, it strongly disagrees with the jury verdict.
“Our mission is to improve the health and lives of Louisianans,” the statement says. “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 health care costs for Louisianans who depend on us every day.”
The plaintiffs, however, argued that they were subject to a pattern of underpayment for more than 10 years. Being the dominant health insurer in the state, BCBSLA used its market power to intimidate and harass the plaintiff, the 2022 lawsuit contends.
The insurer’s actions led to the disruption of the plaintiffs’ medical practices and hurt their ability to provide needed medical care to breast cancer patients, according to the lawsuit.