On a late afternoon in November 2017, Witney Arch told her 1-1/2-year-old son to stop playing and come inside. Upset, he grabbed her right breast when she picked him up. She experienced a shock of pain but did not think it was anything serious. A week later, however, the ache had not subsided. After trips to several doctors, a biopsy revealed that Arch had early-stage breast cancer. Her surgeon told her that it was likely invasive and aggressive.

By the end of January, she had made two critical decisions. She would get a double mastectomy. And she wanted her operation at the Center for Restorative Breast Surgery in New Orleans, a medical facility renowned for its highly specialized approach to breast cancer care and reconstruction. The two surgeons who founded it had pioneered techniques that used a woman's own body tissue to form new breasts post mastectomy. The idea of a natural restoration appealed to Arch. "I don't judge anybody for getting implants, especially if you've had cancer," she said. "But I felt like I was taking something foreign out of my body, cancer, and I did not want to put something foreign back in."

Arch was a 42-year-old preschool teacher for her church, with four young children, living in a suburb of New Orleans. The 1-1/2-year-old had been born with Sturge-Weber syndrome, a rare neurological disorder. Caring for him consumed her life. By nature upbeat and optimistic, Arch felt blessed that her son's act of defiance had led to an early diagnosis. "We're going to pray about this and we're going to figure it out," she told her husband.

Arch asked her insurer, Blue Cross and Blue Shield of Louisiana, for approval to go to the center for her care, and the company granted it, a process known as prior authorization. Then, a week or so before her surgery, Arch was wrangling child care and meal plans when she got a call from the insurer. The representative on the line was trying to persuade her to have the surgery elsewhere. She urged Arch to seek a hospital that, unlike the center, was in network and charged less. "Do you realize how much this is going to cost?" Arch remembered the agent asking. Arch did not need more stress, but here it was — from her own health plan. "I feel very comfortable with my decision," she replied. "My doctor teaches other doctors around the world how to do this." Over the next year, Arch underwent five operations to rid herself of cancer and reconstruct her breasts.

Arch did not know it at the time, but her surgery would become evidence in a long-running legal fight between the breast center's founders, surgeons Frank DellaCroce and Scott Sullivan, and Blue Cross, Louisiana's biggest health insurance company, with an estimated two-thirds share of the market. DellaCroce and Sullivan had repeatedly sued the insurer, alleging that it granted approvals for surgery but then denied payments or paid only a fraction of patients' bills. They pointed to calls like the one Arch received as proof of the company's effort to drive away patients. The aggressive legal attack, they knew, was fraught. Litigation against the $3.4 billion company would take a long time and a lot of money. The chances of winning were slight. "You fight dragons at great peril," DellaCroce would tell friends. But this September, after 18 years and several defeats in court, jurors found Blue Cross liable for fraud. They awarded the center $421 million — one of the largest verdicts ever to a single medical practice outside of a class-action lawsuit. In a statement, Blue Cross said it "disagrees with the jury's decision, which we believe was wrong on the facts and the law. We have filed an appeal and expect to be successful."

Frustration with insurers is at an all-time high. The December fatal shooting of United Healthcare CEO Brian Thompson allegedly by Luigi Mangione serves as an extreme and tragic example. Doctors and insurers are locked into a perpetual conflict over health care costs, with patients caught in the middle. Doctors accuse insurance plans of blocking payments for health care treatments that can save the patients' lives. Insurance companies insist they shouldn't pay for procedures that they say are unnecessary or overpriced. It is easy to emerge from an examination of the American health care system with a cynicism that both sides are broken and corrupt.

However, interviews with scores of doctors, patients and insurance executives, as well as reviews of internal documents, regulatory filings and academic studies, reveal a fundamental truth: The two sides are not evenly matched. Insurance companies are players in the fight over money, and they are also the referees. Insurers produce their own guidelines to determine whether to pay claims. When a doctor appeals a denial, insurers make all the initial decisions. In legal settings, insurers are often given favorable standing in their ability to set what conditions they are required to cover. Federal and state insurance regulators lack the resources to pursue individual complaints against multibillion-dollar companies. Six major insurers, which include some of the nation's largest companies, cover half of all Americans. They are pitted against tens of thousands of doctors' practices and large hospital chains.

The Blue Cross trial provides a rare opportunity to expose in detail the ways that health insurance companies wield power over doctors and their patients. Blue Cross executives testified that the breast center charged too much money — sometimes more than $180,000 for an operation. The center, they said, deserved special attention because it had a history of questionable charges. But the insurer's defense went even further, to the very meaning of "prior authorization," which it had granted women like Arch to pursue surgery. The authorization, they said in court, recognized that a procedure was medically necessary, but it also contained a clause that it was "not a guarantee of payment." Blue Cross was not obliged to pay the center anything, top executives testified. "Let me be clear: The authorization never says we're going to pay you," said Steven Udvarhelyi, who was the CEO for the insurer from 2016 to 2024, in a deposition. "That's why there's a disclaimer.

From 2015 through 2023, the Baton Rouge-based insurer paid, on average, less than 9% of the charges billed by the breast center for more than 7,800 individual medical procedures — even though it had authorized all of them. Thousands of such claims were never paid at all, according to court records. Testimony revealed that the health plan never considered thousands of appeals filed by the center. Corporate documents showed Blue Cross executives had set up secret processes for approving operations and reimbursing the clinic and its doctors that resulted in reduced fees and payment delays. One lucrative strategy: A national-level policy allowed Blue Cross Louisiana to take a cut of any savings it achieved in paying the breast center on behalf of patients covered by out-of-state Blue Cross companies, meaning the less the insurer paid out, the more it earned.

In Sullivan's words, the insurer was hypocritical, "morally bankrupt." Blue Cross had stranded many of the center's patients with high bills, amounts that it had absorbed over the years. On several occasions, though, Blue Cross executives had signed special one-time deals with the center, known as single case agreements, to pay for their wives' cancer treatment. To Sullivan, it seemed the insurer was willing to pay the center when patients had connections but would fight when patients did not.

Blue Cross declined to comment on any individual cases but said in a statement that single case agreements were "common in the industry" and were available to all members when needed to access out-of-network providers.

Chapter 1

The Center

Nobody would take the breast center and its adjoining hospital as an ordinary medical establishment. The two facilities take up a city block along St. Charles Avenue, the thoroughfare famous for its streetcars, Mardi Gras parades and Queen Anne mansions. Patients access the complex — created by merging a former law office, funeral home, car dealership and Dunkin' Donuts — by driving around back where a porte cochere leads into a soaring atrium. Light pours in through windows set in the high ceiling. Arrangements of white orchids are scattered among comfortable couches and chairs. Here, women consult with doctors to plan their treatment. Surgeries are performed at the 39-bed hospital, which has an Icee machine in a family room. New-age music plays softly throughout the building. Rooms are designed to be as homey as possible, with medical gear hidden away and seascapes by a local artist hanging on the wall. One patient's husband referred to it as a "spa-spital."

The idea of combining the luxury feel of an upscale plastic surgery practice with the mission-driven zeal of a medical clinic came to DellaCroce and Sullivan while they were young surgeons. The two grew up in Louisiana. Sullivan spent much of his childhood in Mandeville, a suburb of New Orleans on the north side of Lake Ponchartrain, his dad employed in the oil and gas industry. His mother wanted him to be a priest or a doctor. "I definitely was not going to become a priest," he said. DellaCroce's father worked at the paper mill in West Monroe in the state's northern neck. His mother, a nurse, gave him an appreciation for medicine as a career that was "meaningful and challenging."

They became friends while working at the Louisiana State University medical center, where they earned the nickname "the Sushi Brothers" for their favorite lunch. They were drawn to microsurgery and breast reconstruction because it was an emerging field that was innovating and improving care. Both men became board-certified in plastic surgery. Sullivan, 60, is the hard-charging businessman, stocky, direct and blunt. DellaCroce, 58, with a ponytail, goatee and soft drawl, is more the diplomat, patient and cerebral. The pair have lectured around the world and written numerous medical journal articles.

They opened their first office in 2003 in a single room rented from a fellow doctor at what was then known as Memorial Medical Center, the hulking private hospital in New Orleans. They performed operations at facilities throughout the region but found that most gave little consideration to their patients' comfort. They wanted to build a different kind of hospital. "Can we give them that little bit of extra without breaking the budget to make the experience less awful? Can't make it great, but can you make it less awful?" DellaCroce explained. "Can you attend to the human side of this patient and give them the added value of peace and confidence?" Hurricane Katrina set back their construction plans, and the new edifice, named the St. Charles Surgical Hospital, did not open its doors until 2009. It boasts of being the only hospital in the country devoted solely to care for breast cancer patients who have received mastectomies. The center does not provide radiation or chemotherapy treatments. The majority of patients come from out of state.

Women seeking to have their breasts restored after a mastectomy face two paths. Some choose a relatively straightforward surgical procedure using implants filled with silicone or another gel. The center specializes in the other option, what's known as autologous tissue reconstruction, where a woman's own fat is taken from one part of the body, like the bottom or the stomach, and used to rebuild the breast. The procedure requires a longer recovery time, but the new breasts become part of the body.

The transplant surgery is lengthy and complex. Operations can last up to 12 hours with big medical teams involved. One surgeon performs the mastectomy while another creates a new breast by knitting together layers of fat and tissue. Concentration is intense. The surgeons stare through glasses with microscopes to connect new blood vessels with a needle that's thinner than an eyelash, using thread less than half the width of a human hair. DellaCroce and Sullivan invented techniques, for example, allowing tissue to be taken from multiple sites when a woman did not have enough fat in one part of her body for a full restoration.

One afternoon last fall, DellaCroce strode into a cavernous operating room to check on a patient. On the table in front of him, a woman lay covered in curtains of blue surgical cloth, only her torso exposed. Earlier in the day, a surgical oncologist had removed her right breast as part of a mastectomy to treat her cancer. Later, another surgeon had taken flaps of fat from her stomach and interlaced them with blood vessels to create a new breast to replace the lost one. Now, in the fifth hour of surgery, a physician's assistant leaned over her midsection, closing an incision along her side with some final stitches. Nurses hurried around the space, preparing to wrap up the operation. Paul Simon's "You Can Call Me Al" played in the background. The smell of burnt flesh hung in the air. A blue light signaled that the new arteries were successfully pumping blood. "Wow, that woman looks really good," DellaCroce told the physician's assistant. "Nice job."

There is no denying that the center's high-end treatment means high costs. The median charge for an operation and hospital stay is about $165,000. DellaCroce and Sullivan hired consultants to review other well-regarded practices, who advised them their prices were competitive with their peers. "We weren't asking to be paid LeBron James, best of the best, even though we feel we're in the top 1 or 2% of the country," Sullivan said. "We just wanted something fair."

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.

Discoveries

On Dec. 8, 2023, several dozen attorneys and paralegals from Chehardy Sherman Williams, one of New Orleans' top law firms, were celebrating their annual holiday party. They had gathered in a private dining room with gilded mirrors and shimmering chandeliers at Arnaud's restaurant, a bastion of Creole cuisine in the heart of the French Quarter. The waiters served shrimp remoulade, prime rib and turtle soup. Small talk filled the air.

Suddenly, several attorneys' cellphones buzzed as they all received the same email, a message from the lawyers for Blue Cross. It contained discovery for the case, more than 42,000 pages of internal documents, emails and policies. Matthew Sherman, one of the attorneys representing the center, turned to a colleague. "Can you believe this?" he asked. It was like something from a John Grisham novel, the kind of thing he and his friends had joked about at law school, a document dump at Christmas time. By long tradition, many of New Orleans' biggest law firms hold their holiday parties on the same Friday afternoon in December. Afterward, rival attorneys from around town gather for drinks under a flag of truce at a local bar. Sherman realized there would be no afterparty this year. Nor much of a holiday vacation.

The delivery of the documents was a Christmas gift nearly 20 years in the making. DellaCroce and Sullivan's first lawsuits against Blue Cross, involving 88 breach-of-contract claims filed in a Louisiana civil court beginning in 2006, were dismissed because of a federal court ruling regarding jurisdiction. A second lawsuit, which lasted from 2010 through 2017, resulted in limited discovery and a two-day trial in federal court. Jurors found that Blue Cross had failed to tell the center how much it would pay for procedures, but they also ruled the center had not been financially harmed. A judge dismissed the remaining claims.

DellaCroce and Sullivan launched their third lawsuit in February 2017 with a novel legal theory: They accused Blue Cross of fraud. They contended that for years the insurer had issued prior authorizations without the intention of paying the actual bills. Their lawyers had sought the targeted list during discovery to help prove the case. Blue Cross denied it existed.

But now, as Sherman and fellow attorney Patrick Follette began poring over the thousands of documents, they came upon a spreadsheet that said "Targeted Provider List." The first names on the list were DellaCroce and Sullivan. It was labeled "confidential" and dated June 2007 — about a year after the pair had filed their first lawsuit against Blue Cross alleging nonpayment. More digging turned up other documents. There was a "blocked" list that also featured the two doctors.

A corporate policy document provided what DellaCroce and Sullivan considered the most revealing explanation for Blue Cross' financial motivation. Blue Cross insurers are independent companies that operate under a common set of rules, similar to franchisees in a fast-food chain. When a person covered by Blue Cross in their home state receives treatment in another state, the Blue Cross where the treatment occurs pays the provider and then recoups the cost from the home-state plan. What the attorneys discovered was that Blue Cross Louisiana would receive a share of any savings it could generate for the home-state plan. Say, for instance, Blue Cross Alabama was facing a bill of $5,000 for a procedure. If Blue Cross Louisiana instead paid $1,000, it saved the Alabama plan $4,000. The policy allowed Blue Cross Louisiana to earn 16% of the savings — in this scenario, $640.

For DellaCroce and Sullivan, the revelations cemented their belief that Blue Cross was a bad corporate actor more interested in power and control than health care. The percentage fee incentivized the insurer to pay the doctors as little as possible. The bigger the savings, the more Blue Cross made. "It's win-win," DellaCroce said. "That's their pay day."

As the trial approached, Blue Cross attempted to settle the case. DellaCroce and Sullivan refused the offer as too low.

The Trial

On the afternoon of Sept. 5, 2024, the case — St. Charles Surgical Hospital, L.L.C. and Center for Restorative Breast Surgery, L.L.C. v. Louisiana Health Service & Indemnity Company D/B/A Blue Cross/Blue Shield of Louisiana, Blue Cross & Blue Shield of Louisiana, Inc. and HMO Louisiana, Inc. — opened in Division C of the Orleans Parish Civil District Court, a high-ceilinged room with dark brown benches and tables, fake marble columns and fluorescent lights. James Williams, the chief litigator for the hospital, had already impressed the 45 potential jurors by memorizing all their names and backgrounds during jury selection. Now, he stood up and placed a football on the plaintiff's table in front of the 12 chosen to try the case, which included a third grade teacher, a movie stunt double and a hotel manager. He warned them that they would hear a lot of "insurance talk" from Blue Cross. "I'm going to ask you, ladies and gentlemen on the jury, keep your eye on the ball. Keep your eye on what this case is about," Williams told them. "If they start saying things like, ‘Well, oh, we paid them what we thought was fair, 9%,' keep your eye on the ball, right?"

Over 10 days — interrupted by a two-day break to allow a hurricane to pass across Louisiana — Williams made his case that Blue Cross had defrauded his clients by making promises to pay but failing to deliver.

Much of Blue Cross' defense had relied on the notice that a prior authorization was no guarantee of payment. The insurer had not committed fraud, it said, since it never explicitly promised the center to reimburse anything. Udvarhelyi, the former CEO, had insisted on that. But on the stand, Blue Cross witnesses provided a more nuanced explanation. They acknowledged that the disclaimer was not meant as a general excuse to free the company from paying bills. A prior authorization "usually" resulted in a payment, testified Brower, who reviewed the center's bills. He said that the notice was intended for specific situations. For instance, Blue Cross would not cover a woman who dropped out of her insurance before the operation. Nor would it pay anything if a patient had not met her deductible. But otherwise, Brower said, Blue Cross intended to compensate for a procedure that it had authorized. "It's inappropriate for us as a company to approve a code and then turn around and deny it," Brower said.

Over the years, the center had appealed thousands of reimbursements for being too low. It hired additional employees to manage the paperwork. At the trial, Blue Cross revealed that it had never considered any of the appeals — nor had it ever told the center that they were pointless. "An appeal is not available to review an underpayment," acknowledged Paula Shepherd, a Blue Cross executive vice president. The insurer simply issued an edict — the payment was correct.

This was the core of the case. The insurer set the rules. The insurer set the prices. Doctors could appeal to a state insurance regulator. But if that failed, and it often did, the only recourse was a long, costly lawsuit.

Williams summed up for the jury the center's treatment at the hands of Blue Cross: "Our payments are slow pay, low pay or no pay."

In countering those arguments, Blue Cross witnesses explained that the insurer was committed to paying for Louisianans' health care and keeping costs low. As a nonprofit, it directed any excess revenue from operations back into the business. (Udvarhelyi, the CEO, did acknowledge that his salary, over $1 million, included bonuses that depended on hitting revenue targets and increasing membership.)

Brian West, a Blue Cross executive who monitored payments, said the center had engaged in "egregious" billing practices. "They are bad actors in the billing world," he said. But company witnesses offered only a handful of examples. Sometimes the center mistakenly coded its bills in a way that appeared to charge for four separate breast reconstructions in a single operation. In other cases, the center asked for payment for two surgeons in the room at the same time. But Blue Cross, following Medicare guidelines, would pay two surgeons only 20% more than the reimbursement for a single surgeon.

Blue Cross did not accuse the center of any intentional miscoding — but the sloppy billing led to additional scrutiny, the company's witnesses said. The targeted list, a witness testified, had been created especially for the center, requiring all prior authorization requests to bypass normal routes for a special review by company doctors. The blocked list meant that each bill from the center received a manual scrub by payment specialists before reimbursement. Blue Cross acknowledged the careful checking often resulted in the need for more information from the center, which could result in slower processing of claims. But the lists, executives insisted, were not designed to reduce payments. "Basically, no harm was done," said Becky Juncker, who was involved in approving surgical procedures.

Company witnesses explained that the 16% received in saving money for out-of-state Blue Cross insurers was a fee to cover the costs of handling adjustments of the claim — though they were not able to explain why Blue Cross did not charge a flat fee for its services.

Blue Cross also defended itself against the accusation that it had paid nothing for 60% of the charges for individual procedures. Witnesses said the insurer had followed industry practice in bundling charges to make a single payment for an operation. An attorney for the center noted that it had never agreed to take bundled payments — Blue Cross had imposed them.

As to the calls to women like Arch? That was an effort to save members money. "Our medical area would reach out to our members who were utilizing out-of-network providers to help them understand the, I would say, the financial implications," said Shepherd, the Blue Cross executive vice president, in a deposition. "It could be financially catastrophic to a member to have an out-of-network claim that they are financially responsible for. It's a huge difference."

In summing up the case, Kim Boyle, the lead attorney for the company, told jurors that Blue Cross had not committed fraud. It had acted to ensure the company and its members paid a fair price for the center's services, she said. "There's no scheme. There's no plot. There's no mafia. There are no Blue Cross employees of Louisiana that are sitting in some smoke-filled room in Baton Rouge, plotting against these plaintiffs on St. Charles Avenue in New Orleans," Boyle said. "It's fiction; it's fancy; it's completely made up."

On Sept. 20, at 1:57 p.m., Judge Sidney H. Cates IV sent the jurors to deliberate. The center attorneys retreated to a nearby hotel to await the verdict. About two hours later, they were summoned back to Division C. Williams put his head down and swore. He worried that such a quick return in the legally complex case meant victory for Blue Cross.

The center's lawyers paid close attention to Cates as he reviewed the jurors' decision. It was a two-page form. If the jurors found in favor of Blue Cross, the judge would have no reason to read on. Cates flipped to the second page: The jurors had found Blue Cross liable for fraud. "Please express in dollars the total monetary compensation, if any, Blue Cross owes the hospital and the center for the damages," Cates said, reading from the verdict. "Net damages, $421,488,633." The center's lawyers stood and shook hands as the insurer's attorneys prepared to leave the courtroom.

DellaCroce was in surgery at the hospital, having expected a longer deliberation. Sullivan was in the courtroom to hear the verdict. Afterward, jurors approached and thanked him for his work. He teared up. "We would have given more if we had been asked for more. That's how egregious the fraud was," Juliet Laughlin, a 58-year-old property manager who served as forewoman, later said. "There had been wrong done." 

Blue Cross has appealed the verdict. A health insurance trade group has warned that the finding sets a dangerous precedent. If allowed to stand, insurance companies in Louisiana may find themselves forced to pay whatever price is demanded by out-of-network doctors — which in turn could raise health insurance premiums across the state, the Louisiana Association of Health Plans said in a statement.

For DellaCroce and Sullivan, the verdict was vindication. They had refused to sign contracts they thought unfair. They had rejected settlement offers they thought too low. The trial had revealed Blue Cross' domineering behavior. "Fundamentally, I think their problem was that we were doctors who had control," DellaCroce said. "That was regarded as a threat."

In the months since the judgment, Blue Cross has not changed its practices, the doctors said. It has not approached with an offer that would bring the hospital in network. It still issues prior authorizations for women's surgeries. And it still pays only a fraction of the billed fees.

How We Reported the Story

This account is based on a review of thousands of pages of trial transcripts, depositions, federal and state court records, and internal corporate documents from Blue Cross and Blue Shield of Louisiana, the Center for Restorative Breast Surgery and the St. Charles Surgical Hospital; scores of interviews with doctors, patients and insurance executives; medical records; regulatory filings; and reports by academics, experts and the Louisiana state Senate. Some corporate documents discussed in court were placed under seal after the trial's conclusion. Blue Cross and Blue Shield of Louisiana was provided a detailed list of questions and responded with a written statement, cited in part in the story. The company declined to make any employees available for an interview. Former Blue Cross CEO Steven Udvarhelyi declined to comment, and former employee Dwight Brower did not respond to phone calls or emails. 

Then the state's first abortion ban went into effect and the rate of sepsis spiked.

"This is exactly what we predicted would happen and exactly what we were afraid would happen," said Dr. Lorie Harper, a maternal-fetal medicine specialist in Austin.

She and a dozen other maternal health experts who reviewed ProPublica's findings say they add to the evidence that the state's abortion ban is leading to dangerous delays in care. Texas law threatens up to 99 years in prison for providing an abortion. Though the ban includes an exception for a "medical emergency," the definition of what constitutes an emergency has been subject to confusion and debate.

Many said the ban is the only explanation they could see for the sudden jump in sepsis cases.

The new analysis comes as Texas legislators consider amending the abortion ban in the wake of ProPublica's previous reporting, and as doctors, federal lawmakers and the state's largest newspaper have urged Texas officials to review pregnancy-related deaths from the first full years after the ban was enacted; the state maternal mortality review committee has, thus far, opted not to examine the death data for 2022 and 2023.

The standard of care for miscarrying patients in the second trimester is to offer to empty the uterus, according to leading medical organizations, which can lower the risk of contracting an infection and developing sepsis. If a patient's water breaks or her cervix opens, that risk rises with every passing hour.

Sepsis can lead to permanent kidney failure, brain damage and dangerous blood clotting. Nationally, it is one of the leading causes of deaths in hospitals.

While some Texas doctors have told ProPublica they regularly offer to empty the uterus in these cases, others say their hospitals don't allow them to do so until the fetal heartbeat stops or they can document a life-threatening complication.

Last year, ProPublica reported on the repercussions of these kinds of delays.

Forced to wait 40 hours as her dying fetus pressed against her cervix, Josseli Barnica risked a dangerous infection. Doctors didn't induce labor until her fetus no longer had a heartbeat.

Physicians waited, too, as Nevaeh Crain's organs failed. Before rushing the pregnant teenager to the operating room, they ran an extra test to confirm her fetus had expired.

Both women had hoped to carry their pregnancies to term, both suffered miscarriages and both died.

In response to their stories, 111 doctors wrote a letter to the Legislature saying the abortion ban kept them from providing lifesaving care and demanding a change.

"It's black and white in the law, but it's very vague when you're in the moment," said Dr. Tony Ogburn, an OB-GYN in San Antonio. When the fetus has a heartbeat, doctors can't simply follow the usual evidence-based guidelines, he said. Instead, there is a legal obligation to assess whether a woman's condition is dire enough to merit an abortion under a prosecutor's interpretation of the law.

Some prominent Texas Republicans who helped write and pass Texas' strict abortion bans have recently said that the law should be changed to protect women's lives — though it's unclear if proposed amendments will receive a public hearing during the current legislative session.

ProPublica's findings indicate that the law is getting in the way of providing abortions that can protect against life-threatening infections, said Dr. Sarah Prager, a professor of obstetrics and gynecology at the University of Washington.

"We have the ability to intervene before these patients get sick," she said. "This is evidence that we aren't doing that."

A New View

Health experts, specially equipped to study maternal deaths, sit on federal agencies and state-appointed review panels. But, as ProPublica previously reported, none of these bodies have systematically assessed the consequences of abortion bans.

So ProPublica set out to do so, first by investigating preventable deaths, and now by using data to take a broader view, looking at what happened in Texas hospitals after the state banned abortion, in particular as women faced miscarriages.

"It is kind of mindblowing that even before the bans researchers barely looked into complications of pregnancy loss in hospitals," said perinatal epidemiologist Alison Gemmill, an expert on miscarriage at Johns Hopkins Bloomberg School of Public Health.

In consultation with Gemmill and more than a dozen other maternal health researchers and obstetricians, ProPublica built a framework for analyzing Texas hospital discharge data from 2017 to 2023, the most recent full year available. This billing data, kept by hospitals and collected by the state, catalogues what happens in every hospitalization. It is anonymized but remarkable in its granularity, including details such as gestational age, complications and procedures.

To study infections during pregnancy loss, ProPublica identified all hospitalizations that included miscarriages, terminations and births from the beginning of the second trimester up to 22 weeks' gestation, before fetal viability. Since first-trimester miscarriage is often managed in an outpatient setting, ProPublica did not include those cases in this analysis.

When looking at stays for second-trimester pregnancy loss, ProPublica found a relatively steady rate of sepsis before Texas made abortion a crime. In late 2021, the state made it a civil offense to end a pregnancy after a fetus developed cardiac activity, and in the summer of 2022, the state made it a felony to terminate any pregnancy, with few exceptions.

In 2021, 67 patients who lost a pregnancy in the second trimester were diagnosed with sepsis — as in the previous years, they accounted for about 3% of the hospitalizations.

In 2022, that number jumped to 90.

The following year, it climbed to 99.

ProPublica's analysis was conservative and likely missed some cases. It doesn't capture what happened to miscarrying patients who were turned away from emergency rooms or those like Barnica who were made to wait, then discharged home before they returned with sepsis.

Our analysis showed that patients who were admitted while their fetus was still believed to have a heartbeat were far more likely to develop sepsis.

"What this says to me is that once a fetal death is diagnosed, doctors can appropriately take care of someone to prevent sepsis, but if the fetus still has a heartbeat, then they aren't able to act and the risk for maternal sepsis goes way up," said Dr. Kristina Adams Waldorf, professor of obstetrics and gynecology at UW Medicine and an expert in pregnancy complications. "This is needlessly putting a woman's life in danger."

Studies indicate that waiting to evacuate the uterus increases rates of sepsis for patients whose water breaks before the fetus can survive outside the womb, a condition called previable premature rupture of membranes or PPROM. Because of the risk of infection, major medical organizations like the Society for Maternal-Fetal Medicine and the American College of Obstetricians and Gynecologists advise doctors to always offer abortions.

Researchers in Dallas and Houston examined cases of previable pregnancy complications at their local hospitals after the state ban. Both studies found that when women weren't able to end their pregnancies right away, they were significantly more likely to develop dangerous conditions than before the ban. The study of the University of Texas Health Science Center in Houston, not yet published, found that the rate of sepsis tripled after the ban.

Dr. Emily Fahl, a co-author of that study, recently urged professional societies and state medical boards to "explicitly clarify" that doctors need to recommend evacuating the uterus for patients with a PPROM diagnosis, even with no sign of infection, according to MedPage Today.

UTHealth Houston did not respond to several requests for comment.

ProPublica zoomed out beyond the second trimester to look at deaths of all women hospitalized in Texas while pregnant or up to six weeks postpartum. Deaths peaked amid the COVID-19 pandemic, and most patients who died then were diagnosed with the virus. But looking at the two years before the pandemic, 2018 and 2019, and the two most recent years of data, 2022 and 2023, there is a clear shift:

In the two earlier years, there were 79 maternal hospital deaths.

In the two most recent, there were 120.

Caitlin Myers, an economist at Middlebury College, said it's crucial to examine these deaths from different angles, as ProPublica has done. Data analyses help illuminate trends but can't reveal a patient's history or wishes, as a detailed medical chart might. Diving deep into individual cases can reveal the timeline of treatment and how doctors behave. "When you see them together, it tells a really compelling story that people are dying as a result of the abortion restrictions."

Texas has no plans to scrutinize those deaths. The chair of the maternal mortality review committee said the group is skipping data from 2022 and 2023 and picking up its analysis with 2024 to get a more "contemporary" view of deaths. She added that the decision had "absolutely no nefarious intent."

"The fact that Texas is not reviewing those years does a disservice to the 120 individuals you identified who died inpatient and were pregnant," said Dr. Jonas Swartz, an assistant professor of obstetrics and gynecology at Duke University. "And that is an underestimation of the number of people who died."

The committee is also prohibited by law from reviewing cases that include an abortion medication or procedure, which can also be used during miscarriages. In response to ProPublica's reporting, a Democratic state representative filed a bill to overturn that prohibition and order those cases to be examined.

Because not all maternal deaths take place in hospitals and the Texas hospital data did not include cause of death, ProPublica also looked at data compiled from death certificates by the Centers for Disease Control and Prevention.

It shows that the rate of maternal deaths in Texas rose 33% between 2019 and 2023 even as the national rate fell by 7.5%.

A New Imperative

Texas' abortion law is under review this legislative session. Even the party that championed it and the senator who authored it say they would consider a change.

On a local television program last month, Republican Lt. Gov. Dan Patrick said the law should be amended.

"I do think we need to clarify any language," Patrick said, "so that doctors are not in fear of being penalized if they think the life of the mother is at risk."

State Sen. Bryan Hughes, who once argued that the abortion ban he wrote was "plenty clear," has since reversed course, saying he is working to propose language to amend the ban. Texas Gov. Greg Abbott told ProPublica, through a spokesperson, that he would "look forward to seeing any clarifying language in any proposed legislation from the Legislature."

Patrick, Hughes and Attorney General Ken Paxton did not respond to ProPublica's questions about what changes they would like to see made this session and did not comment on findings ProPublica shared.

In response to ProPublica's analysis, Abbott's office said in a statement that Texas law is clear and pointed to Texas health department data that shows 135 abortions have been performed since Roe was overturned without resulting in prosecution. The vast majority of the abortions were categorized as responses to an emergency but the data did not specify what kind. Only five were solely to "preserve [the] health of [the] woman."

At least seven bills related to repealing or creating new exceptions to the abortion laws have been introduced in Texas.

Doctors told ProPublica they would most like to see the bans overturned so all patients could receive standard care, including the option to terminate pregnancies for health considerations, regardless of whether it's an emergency. No list of exceptions can encompass every situation and risk a patient might face, obstetricians said.

"A list of exceptions is always going to exclude people," said Dallas OB-GYN Dr. Allison Gilbert.

It seems unlikely a Republican-controlled Legislature would overturn the ban. Gilbert and others are advocating to at least end criminal and civil penalties for doctors. Though no doctor has been prosecuted for violating the ban, the mere threat of criminal charges continues to obstruct care, she said.

In 2023, an amendment was passed that permitted physicians to intervene when patients are diagnosed with PPROM. But it is written in such a way that still exposes physicians to prosecution; it allows them to offer an "affirmative defense," like arguing self-defense when charged with murder.

"Anything that can reduce those severe penalties that have really chilled physicians in Texas would be helpful," Gilbert said. "I think it will mean that we save patients' lives."

Rep. Mihaela Plesa, a Democrat from outside Dallas who filed a bill to create new health exceptions, said that ProPublica's latest findings were "infuriating."

She is urging Republicans to bring the bills to a hearing for debate and discussion.

Last session, there were no public hearings, even as women have sued the state after being denied treatment for their pregnancy complications. This year, though some Republicans appeared open to change, others have gone a different direction.

One recently filed a bill that would allow the state to charge women who get an abortion with homicide, for which they could face the death penalty.

United argued that three separate doctors had reviewed her case. The Dwyers sued and lost, but appealed to the 5th U.S. Circuit Court of Appeals, which reversed that decision and ruled unanimously in favor of the family. In a harshly critical opinion, the judges wrote that the denial letters issued by the three doctors were "not supported by the underlying medical evidence." In fact, the court found, they were "contradicted by the record."

Dwyer, who was pleased to learn of the agency's investigation, said she hopes it results in "substantive action."

"I never would have thought that our story would be part of that," she said. "I think it's incredible that the Department of Labor is paying attention to this issue and is investigating the insurance doctors. But I also hope they look beyond the actions of the individual doctors to deeper issues of the way insurance companies operate more systematically."

States are responsible for plans that residents buy on the marketplace; they also regulate those funded by the government through Medicaid but run through private insurers.

In essence, more than 50 different state and federal regulatory entities each oversee a slice of United's vast network.

So when a California regulator cited United for its algorithm-driven practice in 2018, its corrective plan applied only to market plans based in California.

When Massachusetts' attorney general forced it to restrict the system in 2020 for one of the largest health plans there, the prosecutor's power ended at the state line.

And when New York's attorney general teamed up with the U.S. Department of Labor on one of the most expansive investigations in history of an insurer's efforts to limit mental healthcare coverage — one in which they scored a landmark, multimillion-dollar victory against United — none of it made an ounce of difference to the millions whose plans fell outside their purview.

It didn't matter that they were all scrutinizing the insurer for violating the same federal law, one that forbade companies from putting up barriers to mental health coverage that did not exist for physical health coverage.

For United's practices to be curbed, mental health advocates told ProPublica, every single jurisdiction in which it operates would have to successfully bring a case against it.

"It's like playing Whac-A-Mole all the time for regulators," said Lauren Finke, senior director of policy at the mental health advocacy group The Kennedy Forum. The regulatory patchwork benefits insurance companies, she said, "because they can just move their scrutinized practices to other products in different locations."

Now internal documents show that United, through its subsidiary Optum, is targeting plans in other jurisdictions, where its practices have not been curbed. The company is focused on reducing "overutilization" of services for patients covered through its privately contracted Medicaid plans that are overseen by states, according to the internal company records reviewed by ProPublica. These plans cover some of the nation's poorest and most vulnerable patients.

United administers Medicaid plans or benefits in about two dozen states, and for more than 6 million people, according to the most recent federal data from 2022. The division responsible for the company's Medicaid coverage took in $75 billion in revenue last year, a quarter of the total revenue of its health benefits business, UnitedHealthcare.

UnitedHealthcare told ProPublica that the company remains compliant with the terms of its settlement with the New York attorney general and federal regulators. Christine Hauser, a spokesperson for Optum Behavioral Health, said its process for managing healthcare claims is "an important part of making sure patients get access to safe, effective and affordable treatment." Its programs are compliant with federal laws and ensure "people receive the care they need," she said. One category of reviews is voluntary, she added; it allows providers to opt out and does not result in coverage denials.

ProPublica has spent months tracking the company's efforts to limit mental health costs, reviewing hundreds of pages of internal documents and court records, and interviewing dozens of current and former employees as well as scores of providers in the company's insurance networks.

One therapist in Virginia said she is reeling from the costly repercussions of her review by a care advocate. Another in Oklahoma said she faces ongoing pressure from United for seeing her high-risk patients twice a week.

"There's no real clinical rationale behind this," said Tim Clement, the vice president of federal government affairs at the nonprofit group Mental Health America. "This is pretty much a financial decision."

Former care advocates for the company told ProPublica the same as they described steamrolling providers to boost cost savings.

One said he felt like "a cog in the wheel of insurance greed."

Under ALERT

The year 2008 was supposed to mark a revolution in access to mental healthcare.

For decades, United and other insurers had been allowed to place hard caps on treatment, like the number of therapy sessions. But after Congress passed the ​​Mental Health Parity and Addiction Equity Act, insurers could no longer set higher copays for behavioral services or more strictly limit how often patients could get them; insurers needed to offer the same access to mental healthcare as to physical care. The law applied to most plans, regardless of whether federal or state regulators enforced it.

As access to services increased, so did insurers' costs. Company documents show United was keenly aware of this threat to its bottom line.

But there was a loophole: Insurers could still determine what care was medically necessary and appropriate.

Doing so case by case would be expensive and time-consuming. But United already had a tool that could make it easier to spot outliers.

Called ALERT, the algorithmic system was created years earlier to identify patients at risk of suicide or substance use. The company redeployed it to identify therapy overuse.

Company and court filings reveal that ALERT comprised a suite of algorithms — totaling more than 50 at one point — that analyzed clinical and claims data to catch what it considered unusual mental health treatment patterns, flagging up to 15% of the patients receiving outpatient care.

The algorithms could be triggered when care met the company's definition of overly frequent, such as when patients had therapy sessions twice a week for six weeks or more than 20 sessions in six months. Therapists drew scrutiny if they provided services for more than eight hours a day, used the same diagnosis code with most clients or worked on weekends or holidays — even though such work is often necessary with patients in crisis.

The system was originally designed to save lives, said Ed Jones, who co-developed the algorithm program when he worked as an executive at PacifiCare Behavioral Health, which later merged with United. Using ALERT to limit or deny care was "perverting a process that was really pretty good," he told ProPublica.

Once patients or therapists were flagged, care advocates, who were licensed practitioners, would "alert" providers, using intervention scripts to assess whether care was medically necessary. The calls felt like interrogations, therapists told ProPublica, with the predetermined conclusion that their therapy was unnecessary or excessive.

ProPublica spoke with seven former employees from Optum who worked with the ALERT system from 2006 through 2021. They requested not to be named in order to speak freely, some citing fears of retaliation.

Even though the reviews were purportedly intended to identify cases where care was inappropriate or violated clinical standards, several former care advocates said these instances were rare. Instead, they questioned care if it passed an allotted number of sessions.

"It had to be really extreme to help the client be able to continue with the care," said one former care advocate, who was troubled by the practice. "Not everyone with depression is going to be suicidal, but they still need therapy to support them."

The advocates often overruled a provider's expertise, a former team manager said. "There was always this feeling, ‘Why are we telling clinicians what to do?'" he said. "I didn't think it was OK that we were making decisions like that for people."

If the advocates found fault with therapists' explanations — or couldn't persuade them to cut back on care — they elevated the case to a peer-to-peer review, where a psychologist could decide to stop covering treatment.

According to court records, regulators alleged United doled out bonuses to care advocates based on productivity, such as the number of cases handled, and pushed workers to reduce care by modifying a therapist's treatment or referring therapists to peer review in 20% of assigned cases.

At one point, care advocates were referring 40%, regulators alleged in court filings. Each peer review tended to last less than 12 minutes, offering providers little time to prove they had a "clear and compelling" reason to continue treatment.

Former advocates described feeling like parts of a machine that couldn't stop churning. "Literally, we had to tell the company when we were going to the restroom," one advocate said, "and so you would do that and come back and your manager would say, ‘Well, that was a little long.'"

The former workers told ProPublica they were pressured to keep calls brief; the rush added to the tension as therapists pushed back in anger.

"There was an expiration date on those jobs because there was such a pull on you emotionally," one former care advocate said.

Three of them quit, they told ProPublica, citing damage to their own mental health.

New York and federal regulators started looking into the practice around 2016. A California regulator and the Massachusetts attorney general's office soon followed.

All concluded that while United may not have set official caps on coverage, it had done so in practice by limiting mental health services more stringently than medical care. Therefore, it was breaking the federal parity law.

While California and Massachusetts got United to scale back its use of ALERT within their jurisdictions, New York was able to stretch its reach by teaming up with the U.S. Department of Labor to investigate and sue the insurer. Together, they found that from 2013 through 2020, United had denied claims for more than 34,000 therapy sessions in New York alone, amounting to $8 million in denied care.

By using ALERT to ration care, United calculated that it saved the company about $330 per member each time the program was used, the regulators said in court records. Cut off from therapy, some patients were hospitalized. The regulators did not specifically address in court filings whether the treatment denials met medical guidelines.

The company, which denied the allegations and did not have to admit liability or wrongdoing, agreed to pay more than $4 million in restitution and penalties in 2021. Notably, it also agreed to not use ALERT to limit or deny care.

The final terms of the settlement, however, only applied to plans under New York and federal regulators' jurisdiction.

Rebranded Reviews

ProPublica has reviewed documents behind Optum's ALERT and Outpatient Care Engagement programs. Credit: Obtained by ProPublica

In the three years since the settlement, the company has quietly rebranded ALERT.

Up to 10% of cases are flagged for scrutiny, public company documents show. If care advocates take issue with a case, they can elevate it to a peer review, which can result in a denial.

The advocates' script is nearly the same as the one used for ALERT.

Care advocates are even calling therapists from the same phone number.

Overseen by the former director of ALERT, the team's more than 50 care advocates are tasked with ensuring that "outpatient care follows clinical and coverage guidelines" and "reduces overutilization and benefit expense when appropriate," according to company documents.

The team conducts thousands of reviews each month, targeting plans that are mostly regulated by states and fall outside of the jurisdictions of previous sanctions. Patients impacted include workers with fully insured plans and people covered by Medicaid.

Nearly 1 in 3 adults in the Medicaid program has a mental health condition, and a fifth of its members have a substance use disorder. "This is probably disproportionately sweeping up those that are most distressed, most ill and most in need of care," Clement said.

Private insurers that manage Medicaid plans, also known as managed care organizations, are often paid a fixed amount per person, regardless of the frequency or intensity of services used. If they spend less than the state's allotted payment, plans are typically allowed to keep some or all of what remains. Experts, senators and federal investigators have long raised concerns that this model may be incentivizing insurers to limit or deny care.

"They basically manage the benefits to maximize their short-term profit," said David Lloyd, chief policy officer with the mental health advocacy group Inseparable and an expert on state-level mental health parity laws.

State regulators are supposed to be making sure private insurers that manage Medicaid plans are following the mental health parity laws. But this year, a federal audit found that they were failing to do so. "They are not well designed to essentially be watchdogs," Lloyd said. "There's very little accountability. Insurers can run roughshod over them."

The internal records reviewed by ProPublica show the plans and geographic areas now scrutinized by the rebranded program. The team conducts two types of reviews, those considered "consultation" and those that question medical necessity.

For the first kind, the team flags members with high use (more than 30 sessions in eight months) or high frequency (twice-a-week sessions for six weeks or more) to engage their providers in "collaborative" conversations about the treatment plan.

Company documents reveal striking similarities between Optum's ALERT and Outpatient Care Engagement programs. Credit: Obtained by ProPublica

Internal records indicate that the company uses this "consultation" model for about 20 state Medicaid programs, including Washington, Minnesota, Mississippi, Virginia and Tennessee. The company is also deploying the program with Medicaid plans in Massachusetts and, as of the fourth quarter of this year, New York, which are outside of the jurisdiction of the earlier state agreements.

While the Department of Labor does not have jurisdiction over Medicaid, a spokesperson said it "would be concerned about ‘consultation' reviews that are conducted in a way that violates [the mental health parity act]." The department did not comment on whether it was investigating the insurer, as a matter of agency policy.

Company records show Optum is applying its more stringent review method, questioning medical necessity, to psychological testing services and a type of therapy to treat children with autism, known as applied behavior analysis, for people with Medicaid coverage in about 20 states. It is doing the same for routine therapy for its members with dual Medicare-Medicaid plans in about 18 states and Washington, D.C. Such plans are largely overseen by the Centers for Medicare & Medicaid Services, the federal agency responsible for overseeing both Medicare and Medicaid programs. While the dual plans are not subject to federal mental health parity laws, a CMS spokesperson said the agency was taking steps to "ensure that people enrolled in these plans have timely access to care."

The internal company records reveal that Optum has continued to use quotas with its medical necessity reviews, setting productivity targets for how many cases its employees scrutinize. According to records from this year, the target was 160 reviews per employee, which the company exceeded with 180 reviews per employee.

Several state agencies that oversee Medicaid programs, including those in New York and Massachusetts, told ProPublica that they follow federal mental health parity laws and have strong monitoring practices to ensure that the private insurers that manage benefits are in compliance.

Katie Pope, a spokesperson for Washington's healthcare Authority, told ProPublica that ALERT was discontinued three years ago but did not directly respond to questions about the current iteration of the program. Scott Peterson, a spokesperson for Minnesota's Human Services Department, said that while United's policies were compliant with federal parity laws, the company's contract would expire at the end of the year. Last May, the state blocked for-profit insurers, like United, from participating in its Medicaid program.

Amy Lawrence, a spokesperson for Tennessee's Medicaid program, said United's outlier review practice entailed "voluntary collaborative conversations on best practices" and did not question the medical necessity of services nor result in denials of treatment. "There are no adverse consequences for providers who elect not to participate," she said.

Mississippi's, Louisiana's and Virginia's state Medicaid agencies did not respond to ProPublica's questions. (Read all state responses.)

In response to ProPublica's questions about its oversight of state Medicaid programs, a spokesperson for CMS said it was "actively engaged with states and other stakeholders to improve compliance and oversight of parity requirements." (Read the full responses of federal agencies.)

Hauser, the spokesperson for Optum, told ProPublica that the company is committed to working with state Medicaid programs to ensure access to effective and necessary care. She said its new program was separate from ALERT, which she said had been discontinued. (She did not explain why the original ALERT program appears to be still operational in Louisiana, according to a recent company manual.) When the team conducts medical necessity reviews, she said, they are compliant with mental health parity law. (Read the company's full response.)

Ringing Phones

Therapists who underwent the reviews told ProPublica that they felt the practice was intended to discourage them from providing necessary care, interfering with their ability to treat their patients.

This year, Oklahoma therapist Jordan Bracht received multiple calls from the team related to the care of two patients, who were both on United's dual Medicare-Medicaid plan. "If we don't hear back from you within a week," a care advocate said in a voice message, "then the case will be forwarded to the peer review process to make a decision based upon the information available."

Both of Bracht's patients had diagnoses of dissociative identity disorder and required therapy twice a week. "Many of my clients are suicidal and would be hospitalized if I had to cut down the care," Bracht told ProPublica.

Reviewers pushed for end dates for their therapy. "They really wanted me to nail down a discharge date," she said. "We are really trying to keep this person alive, and it felt like they were applying their one-size-fits-all model. It doesn't feel right."

Virginia therapist Chanelle Henderson got a voice message in 2022 from the same number about her care of a patient with state Medicaid coverage. "We'd like to complete a clinical review," the caller said. "We'll follow up with one more call before the case is referred to the peer review process."

When Henderson called back, a reviewer informed her that her practice had been flagged for providing longer sessions. Henderson tried to explain they were necessary to treat trauma, her practice's specialty. "She had no trust in me as a clinician," Henderson said of the reviewer.

The inquiry progressed to questions about other patients, including one who was being treated by a therapist under Henderson's supervision. The reviewer said that the company did not cover sessions of supervised therapists at practices with less than 12 therapists. At the time, Henderson's practice had eight.

The reviewer elevated her case, triggering an aggressive audit of the entire practice going back two years that threatened to shut it down.

Citing issues with supervision and longer sessions, United demanded the practice pay back about $20,000 for services it had already provided. Henderson and her business partner pushed back, hiring a biller to help submit hundreds of pages of additional notes and documentation. They also pointed out that during the audit, the company had even changed its policy to allow smaller practices to supervise therapists. United eventually decreased the penalty by half. Neither Optum, United nor Virginia's Medicaid program directly responded to ProPublica's questions about the case.

Bethany Lackey, who co-founded the practice with Henderson, said that the reviews felt like a pretext for additional scrutiny. "It's all set up in order to catch someone doing something so that they can take back payments," she said. "We all know that behind it is this more malicious intent of getting their money back."