QUARTERLY NEWSLETTER | SPRING 2025 – #52
THE HIGH COST OF DENIAL:
How Health Insurers’ Payment Practices Harm Hospitals and Patients By Joy Stephenson-Laws, Managing Partner For years, a troubling pattern has emerged in the healthcare industry: health insurance companies are increasingly resorting to complex tactics to deny, delay, or drastically underpay legitimate claims from hospitals and other healthcare providers. This is not a matter of isolated incidents or administrative hiccups. Rather, it is a systemic issue that undermines the financial stability of hospitals and places patient care at risk. Several major legal cases illustrate just how far some insurers will go
to avoid reimbursing healthcare institutions fairly— and the consequences these actions have for the broader healthcare ecosystem Case Study 1:
St. Charles Surgical Hospital & Center for Restorative Breast Surgery vs. Blue Cross Blue Shield of Louisiana
In 2024, a Louisiana jury delivered a stunning $421 million verdict against Blue Cross Blue Shield of
Louisiana. The lawsuit was brought by St. Charles Surgical Hospital and the Center for Restorative Breast Surgery, who alleged that the insurer had systematically underpaid for more than 9,000 procedures over a ten-year span. What made the case especially egregious was the fact that these procedures had been pre-approved. Despite verifying coverage and issuing prior authorizations, Blue Cross Blue Shield failed to reimburse the hospitals adequately, instead opting for dramatically reduced payments that ignored customary or contractual