Prior authorization has long been a contentious issue in healthcare, specifically, what does it actually mean for patients and providers? In the case of Witney Arch, she thought that meant she could go to the Center for Restorative Breast Surgery in New Orleans for her double mastectomy, and her insurance would cover the procedure despite the center being out-of-network. She specifically chose this medical facility because she wanted a natural approach to her reconstructive surgery; the two surgeons who founded it, Dr. Frank DellaCroce and Dr. Scott Sullivan, had pioneered techniques that used a woman’s own body tissue to form new breasts post-mastectomy. A week before the surgery, though, it seemed as if Blue Cross and Blue Shield of Louisiana had different plans.
In an article published by ProPublica, Arch details receiving a call from an insurance agent at Blue Cross trying to convince her to have her surgery performed at an in-network facility that would cost less. She didn’t know this at the time, but that phone call would become a crucial piece of evidence in an 18-year legal battle between Blue Cross Blue Shield of Louisiana and Dr. DellaCroce and Dr. Sullivan that ultimately ended with a jury finding Blue Cross Blue Shields liable for fraud and awarded the largest ever verdict to a single medical facility outside of a class action suit. Additionally, the proceedings of this court case revealed a highly questionable pattern in which Blue Cross Blue Shield shortchanged its patients and attempted to deter them from using certain out-of-network providers so that it could avoid absorbing those costs.
Prior authorization is a process that requires providers to obtain pre-approval from insurance companies before providing certain services to a patient. It’s meant to be a cost-controlling measure to ensure that expensive procedures and medications are medically necessary and financially appropriate for patients. Insurance companies feel they shouldn’t have to cover unnecessary, overpriced procedures. However, medical providers argue that the unclear criteria and policy behind making such decisions are susceptible to corruption, which ultimately leads to their patients suffering the most. They are also given a more favorable legal standing in these cases because federal and state insurance regulators lack enough resources to pursue individual complaints against companies like Blue Cross Blue Shield of Louisiana, whose market share accounts for nearly two-thirds of the state’s health insurance industry.
With such a stronghold on the Louisiana insurance market, a trial of this magnitude provides critical insight as to how health insurance companies like Blue Cross Blue Shield can wield their power and cherry-pick when prior authorization means a patient is guaranteed coverage for their procedure, and when they aren’t. From 2015 to 2023, Blue Cross Blue Shield of Louisiana paid less than 9% of the charges billed by the Center for Restorative Breast Surgery for more than 7,800 individual medical procedures, despite being granted authorization for all of them. In some cases, the claims were never paid at all. Blue Cross executives testified that their policy contained a clause stating that prior authorization only acknowledges that the procedure is medically necessary, not that coverage was guaranteed. As such, they claimed the center had a history of questionable charges for their procedures.
When women look to have breast reconstruction surgery, they have two choices. They can get breast implants, a relatively straightforward surgery, or they can get a more invasive procedure known as autologous tissue reconstruction, where doctors take fat from one part of the body and use it to rebuild the breast. As specialists in their field, Dr. DellaCroce and Dr. Sullivan opened the Center for Restorative Breast Surgery to further pioneer this procedure. And they are the only medical practice in the country that is solely devoted to breast cancer patients who have received mastectomies, a significant chunk of whom come from out of state.
Being in such a highly specialized area of surgery, the doctors had long felt Blue Cross Blue Shield was systematically targeting them and not fairly reimbursing them for these procedures, and they were right. Corporate documents revealed that executives established secret processes for approving medical procedures and reimbursing providers, resulting in reduced fees and delayed payments. In fact, a national company policy allowed Blue Cross Blue Shield of Louisiana to take a portion of the savings achieved in paying the center on behalf of out-of-state Blue Cross patients. In other words, the less the insurer paid out to the center, the more it earned.
Dr. Sullivan and Dr. DellaCroce had attempted to fight Blue Cross Blue Shield for fair compensation many times over the course of nearly 20 years to no avail. In 2017, they launched their third lawsuit accusing the insurance company of fraud. They stated that for years, the company issued prior authorization to their patients with no intention of actually paying those bills. In December 2023, they found the smoking gun they’d been waiting for. Among the thousands of documents obtained through discovery, their attorney found a spreadsheet dated June 2007, a year after the doctors filed their first lawsuit alleging nonpayment, labeled “Targeted Provider List.” They were the first doctors listed on this document. Not only that, they were also part of a “blocked list”
Blue Cross Blue Shield’s defense relied on its policy that prior authorization did not mean a guarantee of payment. They contended that this policy “usually” meant payment, but not in specific situations. They also stated that they never even considered appeals from the Center for Restorative Breast Surgery because there was no appeals process in place for underpayment in the first place. The justifications for their surreptitious reimbursement policy and the reasoning behind why they took issue with the center’s billing failed to convince the jury. Blue Cross Blue Shield of Louisiana was found liable for fraud and was ordered to pay over $421 million in damages to the center.
In totality, this highlights the ongoing discussion regarding the meaning of prior authorization and when it should be required. This also raises the question of who should have the ultimate authority in determining when a surgery is medically necessary. Insurance companies feel the decision should be left up to them as a means of cost control that ultimately benefits the patient. Doctors believe that the decision should be left to them because, often, the unclear definition and policies regarding prior authorization are manipulated to provide as little coverage as possible for their patients, and by extension, to secure fair reimbursement for themselves. Regardless, patients ultimately suffer because their medically necessary procedures can be delayed for months. Ultimately, there needs to be a balance between cost control to root out bad actors and allowing doctors to provide the best care possible to their patients.
The current administration, in consultation with major health insurers, is working to strike this balance. On June 23rd, 2025, US Health and Human Services Secretary Robert F. Kennedy Jr and Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz met with Aetna Inc, Blue Cross Blue Shield Association, Centene Corporation, Humana Inc, Kaiser Permanente, and many more to discuss key reforms aimed at streamlining and improving the prior authorization process for government-sponsored and commercial health insurance plans. Of the topics discussed, participants of this meeting pledged the following:
Similar efforts to enact these reforms have been made in the past with little success. However, with the increased scrutiny and spotlight on cases like this one, experts on both sides of the issue hope that this renewed urgency can serve as an incremental step towards creating more fundamental reforms that are necessary to address the unique barriers to care imposed by insurers across the healthcare industry as a whole.