Dramatic changes to the Vaccine Injury Compensation Program risk driving drugmakers from the market, threatening access to shots.
This article was published on Thursday, July 17, 2025 in ProPublica.
Five months after taking over the federal agency responsible for the health of all Americans, Robert F. Kennedy Jr. wants to overhaul an obscure but vital program that underpins the nation's childhood immunization system.
Depending on what he does, the results could be catastrophic.
In his crosshairs is the Vaccine Injury Compensation Program, a system designed to provide fair and quick payouts for people who suffer rare but serious side effects from shots — without having to prove that drugmakers were negligent. Congress created the program in the 1980s when lawsuits drove vaccine makers from the market. A special tax on immunizations funds the awards, and manufacturers benefit from legal protections that make it harder to win big-money verdicts against them in civil courts.
Kennedy, who founded an anti-vaccination group and previously accused the pharmaceutical industry of inflicting "unnecessary and risky vaccines" on children for profits, has long argued that the program removes any incentive for the industry to make safe products.
In a recent interview with Tucker Carlson, Kennedy condemned what he called corruption in the program and said he had assigned a team to overhaul it and expand who could seek compensation. He didn't detail his plans but did repeat the long-debunked claim that vaccines cause autism and suggested, without citing any evidence, that shots could also be responsible for a litany of chronic ailments, from diabetes to narcolepsy.
There are a number of ways he could blow up the program and prompt vaccine makers to stop selling shots in the U.S., like they did in the 1980s. The trust fund that pays awards, for instance, could run out of money if the government made it easy for Kennedy's laundry list of common health problems to qualify for payments from the fund.
Or he could pick away at the program one shot at a time. Right now, immunizations routinely recommended for children or pregnant women are covered by the program. Kennedy has the power to drop vaccines from the list, a move that would open up their manufacturers to the kinds of lawsuits that made them flee years ago.
Dr. Eddy Bresnitz, who served as New Jersey's state epidemiologist and then spent a dozen years as a vaccine executive at Merck, is among those worried.
"If his unstated goal is to basically destroy the vaccine industry, that could do it," said Bresnitz, who retired from Merck and has consulted for vaccine manufacturers. "I still believe, having worked in the industry, that they care about protecting American health, but they are also for-profit companies with shareholders, and anything that detracts from the bottom line that can be avoided, they will avoid."
A spokesperson for PhRMA, a U.S. trade group for pharmaceutical companies, told ProPublica in a written statement that upending the Vaccine Injury Compensation Program "would threaten continued patient access to FDA approved vaccines."
The spokesperson, Andrew Powaleny, said the program "has compensated thousands of claims while helping ensure the continued availability of a safe and effective vaccine supply. It remains a vital safeguard for public health and importantly doesn't shield manufacturers from liability."
Since its inception, the compensation fund has paid about $4.8 billion in awards for harm from serious side effects, such as life-threatening allergic reactions and Guillain-Barré syndrome, an autoimmune condition that can cause paralysis. The federal agency that oversees the program found that for every 1 million doses of vaccine distributed between 2006 and 2023, about one person was compensated for an injury.
Since becoming Health and Human Services secretary, Kennedy has turned the staid world of immunizations on its ear. He reneged on the U.S. government's pledge to fund vaccinations for the world's poorest kids. He fired every member of the federal advisory group that recommends which shots Americans get, and his new slate vowed to scrutinize the U.S. childhood immunization schedule. Measles, a vaccine-preventable disease eliminated here in 2000, roared back and hit a grim record — more cases than the U.S. has seen in 33 years, including three deaths. When a U.S. senator asked Kennedy if he recommended measles shots, Kennedy answered, "Senator, if I advised you to swim in a lake that I knew there to be alligators in, wouldn't you want me to tell you there were alligators in it?"
Fed up, the American Academy of Pediatrics and other medical societies sued Kennedy last week, accusing him of dismantling "the longstanding, Congressionally-authorized, science- and evidence-based vaccine infrastructure that has prevented the deaths of untold millions of Americans." (The federal government has yet to respond to the suit.)
Just about all drugs have side effects. What's unusual about vaccines is that they're given to healthy people — even newborns on their first day of life. And many shots protect not just the individuals receiving them but also the broader community by making it harder for deadly scourges to spread. The Centers for Disease Control and Prevention estimates that routine childhood immunizations have prevented more than 1.1 million deaths and 32 million hospitalizations among the generation of Americans born between 1994 and 2023.
To most people, the nation's vaccine system feels like a solid, reliable fact of life, doling out shots to children like clockwork. But in reality it is surprisingly fragile.
There are only a handful of companies that make nearly all of the shots children receive. Only one manufacturer makes chickenpox vaccines. And just two or three make the shots that protect against more than a dozen diseases, including polio and measles. If any were to drop out, the country could find itself in the same crisis that led President Ronald Reagan to sign the law creating the Vaccine Injury Compensation Program in 1986.
Back then, pharmaceutical companies faced hundreds of lawsuits alleging that the vaccine protecting kids from whooping cough, diphtheria and tetanus caused unrelenting seizures that led to severe disabilities. (Today's version of this shot is different.) One vaccine maker after another left the U.S. market.
At one point, pediatricians could only buy whooping cough vaccines from a single company. Shortages were so bad that the CDC recommended doctors stop giving booster shots to preserve supplies for the most vulnerable babies.
While Congress debated what to do, public health clinics' cost per dose jumped 5,000% in five years.
"We were really concerned that we would lose all vaccines, and we would get major resurgences of vaccine-preventable diseases," recalled Dr. Walter Orenstein, a vaccine expert who worked in the CDC's immunization division at the time.
A Forbes headline captured the anxiety of parents, pediatricians and public health workers: "Scared Shotless." So a bipartisan group in Congress hammered out the no-fault system.
Today, the program covers vaccines routinely recommended for children or pregnant women once Congress approves the special tax that funds awards. (COVID-19 shots are part of a separate, often-maligned system for handling claims of harm, though Kennedy has said he's looking at ways to add them to the Vaccine Injury Compensation Program.)
Under program rules, people who say they are harmed by covered vaccines can't head straight to civil court to sue manufacturers. First, they have to go through the no-fault system. The law established a table of injuries and the time frame for when those conditions must have appeared in order to be considered for quicker payouts. A tax on those vaccines — now 75 cents for every disease that a shot protects against — flows into a trust fund that pays those approved for awards. Win or lose, the program, for the most part, pays attorney fees and forbids lawyers from taking a cut of the money paid to the injured.
The law set up a dedicated vaccine court where government officials known as special masters, who operate like judges, rule on cases without juries. People can ask for compensation for health problems not listed on the injury table, and they don't have to prove that the vaccine maker was negligent or failed to warn them about the medical condition they wound up with. At the same time, they can't claim punitive damages, which drive up payouts in civil courts, and pain and suffering payments are capped at $250,000.
Plaintiffs who aren't satisfied with the outcome or whose cases drag on too long can exit the program and file their cases in traditional civil courts. There they can pursue punitive damages, contingency-fee agreements with lawyers and the usual evidence gathering that plaintiffs use to hold companies accountable for wrongdoing.
But a Supreme Court ruling, interpreting the law that created the Vaccine Injury Compensation Program, limited the kinds of claims that can prevail in civil court. So while the program isn't a full liability shield for vaccine makers, its very existence significantly narrows the cases trial lawyers can file.
Kennedy has been involved in such civil litigation. In his federal disclosures, he revealed that he referred plaintiffs to a law firm filing cases against Merck over its HPV shot in exchange for a 10% cut of the fees if they win. After a heated exchange with Sen. Elizabeth Warren during his confirmation proceedings, Kennedy said his share of any money from those cases would instead go to one of his adult sons, who he later said is a lawyer in California. His son Conor works as an attorney at the Los Angeles law firm benefiting from his referrals. When ProPublica asked about this arrangement, Conor Kennedy wrote, "I don't work on those cases and I'm not receiving any money from them."
In March, a North Carolina federal judge overseeing hundreds of cases that alleged Merck failed to warn patients about serious side effects from its HPV vaccine ruled in favor of Merck; an appeal is pending.
The Vaccine Injury Compensation Program succeeded in stabilizing the business of childhood vaccines, with many more shots developed and approved in the decades since it was established. But even ardent supporters acknowledge there are problems. The program's staff levels haven't kept up with the caseload. The law capped the number of special masters at eight, and congressional bills to increase that have failed. An influx of adult claims swamped the system after adverse reactions to flu shots became eligible for compensation in 2005 and serious shoulder problems were added to the injury table in 2017.
The quick and smooth system of payouts originally envisioned has evolved into a more adversarial one with lawyers for the Department of Justice duking it out with plaintiffs' attorneys, which Kennedy says runs counter to the program's intent. Many cases drag on for years.
In his recent interview with Carlson, he described "the lawyers of the Department of Justice, the leaders of it" working on the cases as corrupt. "They saw their job as protecting the trust fund rather than taking care of people who made this national sacrifice, and we're going to change all that," he said. "And I've brought in a team this week that is starting to work on that."
The system is "supposed to be generous and fast and gives a tie to the runner," he told Carlson. "In other words, if there's doubts about, you know, whether somebody's injury came from a vaccine or not, you're going to assume they got it and compensate them."
Kennedy didn't identify who is on the team reviewing the program. At one point in the interview, he said, "We just brought a guy in this week who's going to be revolutionizing the Vaccine Injury Compensation Program."
Downing did not respond to a voicemail left at his law office. HHS didn't reply to a request to make him and Kennedy available for an interview and declined to answer detailed questions about its plans for the Vaccine Injury Compensation Program. In the past, an HHS spokesperson has said that Kennedy is "not anti-vaccine — he is pro-safety."
While it's not clear what changes Downing and Kennedy have in mind, Kennedy's interview with Carlson offered some insights. Kennedy said he was working to expand the program's three-year statute of limitations so that more people can be compensated. Downing has complained that patients who have certain autoimmune disorders don't realize their ailments were caused by a vaccine until it's too late to file. Congress would have to change the law to allow this, experts said.
A key issue is whether Kennedy will try to add new ailments to the list of injuries that qualify for quicker awards.
In the Carlson interview, Kennedy dismissed the many studies and scientific consensus that shots don't cause autism as nothing more than statistical trickery. "We're going to do real science," Kennedy said.
The vaccine court spent years in the 2000s trying cases that alleged autism was caused by the vaccine ingredient thimerosal and the shot that protects people from measles, mumps and rubella. Facing more than 5,000 claims, the court asked a committee of attorneys representing children with autism to pick test cases that represented themes common in the broader group. In the cases that went to trial, the special masters considered more than 900 medical articles and heard testimony from dozens of experts. In each of those cases, the special masters found that the shots didn't cause autism.
In at least two subsequent cases, children with autism were granted compensation because they met the criteria listed in the program's injury table, according to a vaccine court decision. That table, for instance, lists certain forms of encephalopathy — a type of brain dysfunction — as a rare side effect of shots that protect people from whooping cough, measles, mumps and rubella. In a 2016 vaccine court ruling, Special Master George L. Hastings Jr. explained, "The compensation of these two cases, thus does not afford any support to the notion that vaccinations can contribute to the causation of autism."
Hastings noted that when Congress set up the injury table, the lawmakers acknowledged that people would get compensated for "some injuries that were not, in fact, truly vaccine-caused."
Many disabling neurological disorders in children become apparent around the time kids get their shots. Figuring out whether the timing was coincidental or an indication that the vaccines caused the problem has been a huge challenge.
Devastating seizures in young children were the impetus for the compensation program. But in the mid-1990s, after a yearslong review of the evidence, HHS removed seizure disorder from the injury table and narrowed the type of encephalopathy that would automatically qualify for compensation. Scientists subsequently have discovered genetic mutations that cause some of the most severe forms of epilepsy.
What's different now, though, is that Kennedy, as HHS secretary, has the power to add autism or other disorders to that injury table. Experts say he'd have to go through the federal government's cumbersome rulemaking process to do so. He could also lean on federal employees to green-light more claims.
In addition, Kennedy has made it clear he's thinking about illnesses beyond autism. "We have now this epidemic of immune dysregulation in our country, and there's no way to rule out vaccines as one of the key culprits," he told Carlson. Kennedy mentioned diabetes, rheumatoid arthritis, seizure disorders, ADHD, speech delay, language delay, tics, Tourette syndrome, narcolepsy, peanut allergies and eczema.
President Donald Trump's budget estimated that the value of the investments in the Vaccine Injury Compensation Program trust fund could reach $4.8 billion this year. While that's a lot of money, a life-care plan for a child with severe autism can cost tens of millions of dollars, and the CDC reported in April that 1 in 31 children is diagnosed with autism by their 8th birthday. The other illnesses Kennedy mentioned also affect a wide swath of the U.S. population.
Dr. Paul Offit, a co-inventor of a rotavirus vaccine and director of the Vaccine Education Center at Children's Hospital of Philadelphia, for years has sparred with Kennedy over vaccines. Offit fears that Kennedy will use flawed studies to justify adding autism and other common medical problems to the injury table, no matter how much they conflict with robust scientific research.
"You can do that, and you will bankrupt the program," he said. "These are ways to end vaccine manufacturing in this country."
If the trust fund were to run out of money, Congress would have to act, said Dorit Reiss, a law professor at University of California Law San Francisco who has studied the Vaccine Injury Compensation Program. Congress could increase the excise tax on vaccines, she said, or pass a law limiting what's on the injury table. Or Congress could abolish the program, and the vaccine makers would find themselves back in the situation they faced in the 1980s.
"That's not unrealistic," Reiss said.
Rep. Paul Gosar, an Arizona Republican, last year proposed the End the Vaccine Carveout Act, which would have allowed people to bypass the no-fault system and head straight to civil court. His press release for the bill — written in September, before Kennedy's ascension to HHS secretary — quoted Kennedy saying, "If we want safe and effective vaccines, we need to end the liability shield."
The legislation never came up for a vote. A spokesperson for the congressman said he expects to introduce it again "in the very near future."
Renée Gentry, director of the George Washington University Law School's Vaccine Injury Litigation Clinic, thinks it's unlikely Congress will blow up the no-fault program. But Gentry, who represents people filing claims for injuries, said it's hard to predict what Congress, faced with a doomsday scenario, would do.
"Normally Democrats are friends of plaintiffs' lawyers," she said. "But talking about vaccines on the Hill is like walking on a razor blade that's on fire."
Beyond staff cuts, the departures of investigators in recent months have left less experienced people tasked with rooting out dangerous manufacturing practices.
This article was published on Monday, July 7, 2025 in ProPublica.
By Victoria Malis, Katherine Dailey and Sadie Leite, Medill Investigative Lab, and Debbie Cenziper and Megan Rose, ProPublica.
Inspectors charged with safeguarding America's drug supply say they are reeling from deep cuts at the Food and Drug Administration despite promises by the Trump administration to preserve the work of the agency's investigative force.
Dozens of people who help coordinate travel for complex inspections of foreign drug-making factories have been let go, and though some have since been rehired, inspectors said the ongoing strain of policing an industry spread across more than 90 countries has exhausted staff and could compromise the safety of medications used by millions of people.
For years, inspectors have uncovered dirty equipment, contaminated supplies and fraudulent testing records in some overseas factories — serious safety and quality breaches that can sicken or kill consumers. Last month, ProPublica reported that a generic immunosuppression drug for transplant patients could dissolve too quickly when ingested, increasing the risk of kidney failure. The drug was made at an Indian factory with a history of quality violations that was banned from the U.S. market. The company previously told ProPublica it believes the medication is safe.
In April, more than 3,500 FDA employees were laid off under U.S. Department and Health and Human Services Secretary Robert F. Kennedy Jr., a roughly 15% reduction in force. "We aren't just reducing bureaucratic sprawl. We are realigning the organization with its core mission and our new priorities in reversing the chronic disease epidemic," Kennedy said.
At the time, the agency said the reductions would not impact inspectors. Kennedy has since announced that HHS would reverse 20% of the cuts across the agency. Amid news reports describing the layoffs at the FDA, Kennedy did not specify how many people would be reinstated.
ProPublica spoke to 10 current and former FDA staff members and leaders in recent weeks, including inspectors who said that the loss of support staff has slowed critical investigations and that little relief has materialized. Most declined to be named because they were not authorized to speak publicly or feared backlash within the industry as they search for new jobs.
One veteran drug inspector said nearly 70 people who helped arrange travel, budgets, translators and contingency plans for investigations were laid off. Only about one-third have been brought back, forcing a handful of busy managers to coordinate travel clearances and visas for inspections that can span weeks and include stops in multiple countries.
"It's difficult to get inspections done," the investigator said. "The pace has slowed down. You can't inspect as many sites."
In an email, an HHS spokesperson said inspections have not been affected by downsizing. The agency did not address questions about how many people have been let go or reinstated or whether additional help will be brought on.
"To be clear, FDA inspectors were not impacted, and this critical work continues," the agency said.
Two former FDA commissioners and the agency's longtime head of drug safety, however, said that the loss of support staff has undermined one of the FDA's most essential missions at a time when Americans get most of their generic drugs from overseas manufacturers. That includes chemotherapy treatments, sedatives, antibiotics and medications on hospital crash carts.
"It's like saying, ‘Oh we didn't fire any of the doctors or nurses at the hospital, but we fired all the lab techs, all the orderlies, all the phlebotomists … oh, but the doctors and nurses are still left so it's fine,'" said Janet Woodcock, who ran the agency's Center for Drug Evaluation and Research for more than two decades and retired in 2004. "A lot of the connective tissue that deals with drug safety and similar things are going to be missing."
Beyond the staff cuts, the departures of some longtime investigators and leaders in recent months have left less experienced people tasked with rooting out dangerous and sometimes deceptive manufacturing practices.
The investigative unit, which looks into potential safety issues with drugs, vaccines, medical devices and other products, has had a retention problem for years. Inspectors leave so often that even with hiring blitzes, the FDA has been unable to get ahead.
Between 2022 and 2024, the agency hired 105 inspectors but about the same number left, leaving the inspection pool with about 230 people, according to the Government Accountability Office, the watchdog arm of Congress.
About one-third did not have the experience to conduct independent foreign inspections, the GAO found.
Two FDA inspectors said the agency needs an additional 100 to 200 experienced investigators to do the work.
The job can be grueling. Some inspectors who travel to overseas drug-making factories can be away for as long as 15 weeks a year. Some have described threats of violence by company managers, days on planes and trains in oppressive heat and long nights preparing inspection reports before they head to the next stop.
The loss of experienced investigators and cuts to support staff have also hamstrung other inspectors.
"I am in utter shock that they don't support and promote those of us who can do a decent inspection," said one investigator who scrutinizes factories that produce vaccines, cell therapies and other biological products. "You're adding to the chaos."
Dozens of employees who handled technology support, facilities, supplies and equipment were dismissed as well, snarling some day-to-day operations at the agency. One current employee recalled how a colleague couldn't find replacement batteries for a computer mouse and how another locked herself out of her office and couldn't get back in because there was no one to open the door.
Even before the layoffs, the FDA's investigative force struggled to monitor drug-making factories in countries that include India and China, particularly during the COVID-19 pandemic, raising alarms in Congress that serious manufacturing lapses may have gone unchecked. The FDA received more than 1 million reports from doctors, patients and others in 2023 about product quality issues or consumers who had adverse reactions to drugs, FDA data shows.
"Things will be missed," former FDA inspector Patrick Stone said about the layoffs. "We are going to have a lot less safe drugs."
The Trump administration has said little about the layoffs in recent weeks, though Kennedy told Congress late last month that more than 900 employees at the Centers for Disease Control and Prevention and the National Institutes of Health had been reinstated.
The FDA announced in May that it would expand the use of unannounced inspections at overseas factories, a move that some members of Congress have been pushing for years. And FDA Commissioner Marty Makary announced that a new AI tool known as Elsa would help identify inspection targets.
Current and former employees others say that won't make up for the losses.
"You can't just expect the inspector to take care of all the complexities of organizing their trips overseas," said former FDA Commissioner Margaret Hamburg, who served under the Obama administration. "Even though it might be said we've kept the inspectors, that doesn't mean that they've kept the infrastructure … that actually supports safe and meaningful inspections."
A DOGE staffer with no medical experience used artificial intelligence to identify which VA contracts to kill.
This article was published on Friday, June 6, 2025 in ProPublica.
By Brandon Roberts, Vernal Coleman and Eric Umansky.
As the Trump administration prepared to cancel contracts at the Department of Veteran Affairs this year, officials turned to a software engineer with no health care or government experience to guide them.
The engineer, working for the Department of Government Efficiency, quickly built an artificial intelligence tool to identify which services from private companies were not essential. He labeled those contracts "MUNCHABLE."
The code, using outdated and inexpensive AI models, produced results with glaring mistakes. For instance, it hallucinated the size of contracts, frequently misreading them and inflating their value. It concluded more than a thousand were each worth $34 million, when in fact some were for as little as $35,000.
The DOGE AI tool flagged more than 2,000 contracts for "munching." It's unclear how many have been or are on track to be canceled — the Trump administration's decisions on VA contracts have largely been a black box. The VA uses contractors for many reasons, including to support hospitals, research and other services aimed at caring for ailing veterans.
VA officials have said they've killed nearly 600 contracts overall. Congressional Democrats have been pressing VA leaders for specific details of what's been canceled without success.
We identified at least two dozen on the DOGE list that have been canceled so far. Among the canceled contracts was one to maintain a gene sequencing device used to develop better cancer treatments. Another was for blood sample analysis in support of a VA research project. Another was to provide additional tools to measure and improve the care nurses provide.
ProPublica obtained the code and the contracts it flagged from a source and shared them with a half dozen AI and procurement experts. All said the script was flawed. Many criticized the concept of using AI to guide budgetary cuts at the VA, with one calling it "deeply problematic."
Cary Coglianese, professor of law and of political science at the University of Pennsylvania who studies the governmental use and regulation of artificial intelligence, said he was troubled by the use of these general-purpose large language models, or LLMs. "I don't think off-the-shelf LLMs have a great deal of reliability for something as complex and involved as this," he said.
Sahil Lavingia, the programmer enlisted by DOGE, which was then run by Elon Musk, acknowledged flaws in the code.
"I think that mistakes were made," said Lavingia, who worked at DOGE for nearly two months. "I'm sure mistakes were made. Mistakes are always made. I would never recommend someone run my code and do what it says. It's like that ‘Office' episode where Steve Carell drives into the lake because Google Maps says drive into the lake. Do not drive into the lake."
Though Lavingia has talked about his time at DOGE previously, this is the first time his work has been examined in detail and the first time he's publicly explained his process, down to specific lines of code.
Lavingia has nearly 15 years of experience as a software engineer and entrepreneur but no formal training in AI. He briefly worked at Pinterest before starting Gumroad, a small e-commerce company that nearly collapsed in 2015. "I laid off 75% of my company — including many of my best friends. It really sucked," he said. Lavingia kept the company afloat by "replacing every manual process with an automated one," according to a post on his personal blog.
Lavingia did not have much time to immerse himself in how the VA handles veterans' care between starting on March 17 and writing the tool on the following day. Yet his experience with his own company aligned with the direction of the Trump administration, which has embraced the use of AI across government to streamline operations and save money.
Lavingia said the quick timeline of Trump's February executive order, which gave agencies 30 days to complete a review of contracts and grants, was too short to do the job manually. "That's not possible — you have 90,000 contracts," he said. "Unless you write some code. But even then it's not really possible."
Under a time crunch, Lavingia said he finished the first version of his contract-munching tool on his second day on the job — using AI to help write the code for him. He told ProPublica he then spent his first week downloading VA contracts to his laptop and analyzing them.
VA press secretary Pete Kasperowicz lauded DOGE's work on vetting contracts in a statement to ProPublica. "As far as we know, this sort of review has never been done before, but we are happy to set this commonsense precedent," he said.
The VA is reviewing all of its 76,000 contracts to ensure each of them benefits veterans and is a good use of taxpayer money, he said. Decisions to cancel or reduce the size of contracts are made after multiple reviews by VA employees, including agency contracting experts and senior staff, he wrote.
Kasperowicz said that the VA will not cancel contracts for work that provides services to veterans or that the agency cannot do itself without a contingency plan in place. He added that contracts that are "wasteful, duplicative or involve services VA has the ability to perform itself" will typically be terminated.
Trump officials have said they are working toward a "goal" of cutting around 80,000 people from the VA's workforce of nearly 500,000. Most employees work in one of the VA's 170 hospitals and nearly 1,200 clinics.
The VA has said it would avoid cutting contracts that directly impact care out of fear that it would cause harm to veterans. ProPublica recently reported that relatively small cuts at the agency have already been jeopardizing veterans' care.
The VA has not explained how it plans to simultaneously move services in-house, as Lavingia's code suggested was the plan, while also slashing staff.
To help the public better understand the flaws in DOGE's use of AI, we've broken down how Lavingia's prompt works in a separate story.
Many inside the VA told ProPublica the process for reviewing contracts was so opaque they couldn't even see who made the ultimate decisions to kill specific contracts. Once the "munching" script had selected a list of contracts, Lavingia said he would pass it off to others who would decide what to cancel and what to keep. No contracts, he said, were terminated "without human review."
"I just delivered the [list of contracts] to the VA employees," he said. "I basically put munchable at the top and then the others below."
VA staffers told ProPublica that when DOGE identified contracts to be canceled early this year — before Lavingia was brought on — employees sometimes were given little time to justify retaining the service. One recalled being given just a few hours. The staffers asked not to be named because they feared losing their jobs for talking to reporters.
According to one internal email that predated Lavingia's AI analysis, staff members had to respond in 255 characters or fewer — just shy of the 280 character limit on Musk's X social media platform.
Once he started on DOGE's contract analysis, Lavingia said he was confronted with technological limitations. At least some of the errors produced by his code can be traced to using older versions of OpenAI models available through the VA — models not capable of solving complex tasks, according to the experts consulted by ProPublica.
Moreover, the tool's underlying instructions were deeply flawed. Records show Lavingia programmed the AI system to make intricate judgments based on the first few pages of each contract — about the first 2,500 words — which contain only sparse summary information.
"AI is absolutely the wrong tool for this," said Waldo Jaquith, a former Obama appointee who oversaw IT contracting at the Treasury Department. "AI gives convincing looking answers that are frequently wrong. There needs to be humans whose job it is to do this work."
Lavingia's prompts did not include context about how the VA operates, what contracts are essential or which ones are required by federal law. This led AI to determine a core piece of the agency's own contract procurement system was "munchable."
At the core of Lavingia's prompt is the direction to spare contracts involved in "direct patient care."
Then, evaluate if this contract is "munchable" based on these criteria:
…
- Level 0: Direct patient care (e.g., bedside nurse) - NOT MUNCHABLE
- Level 1: Necessary consultants that can't be insourced - NOT MUNCHABLE
- Level 2+: Multiple layers removed from veterans care - MUNCHABLE
- Contracts related to "diversity, equity, and inclusion" (DEI) initiatives - MUNCHABLE
- Services that could easily be replaced by in-house W2 employees - MUNCHABLE
Such an approach, experts said, doesn't grapple with the reality that the work done by doctors and nurses to care for veterans in hospitals is only possible with significant support around them.
Lavingia's system also used AI to extract details like the contract number and "total contract value." This led to avoidable errors, where AI returned the wrong dollar value when multiple were found in a contract. Experts said the correct information was readily available from public databases.
Lavingia acknowledged that errors resulted from this approach but said those errors were later corrected by VA staff.
In late March, Lavingia published a version of the "munchable" script on his GitHub account to invite others to use and improve it, he told ProPublica. "It would have been cool if the entire federal government used this script and anyone in the public could see that this is how the VA is thinking about cutting contracts."
According to a post on his blog, this was done with the approval of Musk before he left DOGE. "When he asked the room about improving DOGE's public perception, I asked if I could open-source the code I'd been writing," Lavingia said. "He said yes — it aligned with DOGE's goal of maximum transparency."
That openness may have eventually led to Lavingia's dismissal. Lavingia confirmed he was terminated from DOGE after giving an interview to Fast Company magazine about his work with the department. A VA spokesperson declined to comment on Lavingia's dismissal.
VA officials have declined to say whether they will continue to use the "munchable" tool moving forward. But the administration may deploy AI to help the agency replace employees. Documents previously obtained by ProPublica show DOGE officials proposed in March consolidating the benefits claims department by relying more on AI.
And the government's contractors are paying attention. After Lavingia posted his code, he said he heard from people trying to understand how to keep the money flowing.
"I got a couple DMs from VA contractors who had questions when they saw this code," he said. "They were trying to make sure that their contracts don't get cut. Or learn why they got cut.
"At the end of the day, humans are the ones terminating the contracts, but it is helpful for them to see how DOGE or Trump or the agency heads are thinking about what contracts they are going to munch. Transparency is a good thing."
If you have any information about the misuse or abuse of AI within government agencies, Brandon Roberts is an investigative journalist on the news applications team and has a wealth of experience using and dissecting artificial intelligence. He can be reached on Signal @brandonrobertz.01 or by email brandon.roberts@propublica.org.
If you have information about the VA that we should know about, contact reporter Vernal Coleman on Signal, vcoleman91.99, or via email, vernal.coleman@propublica.org, and Eric Umansky on Signal, Ericumansky.04, or via email, eric.umansky@propublica.org.
The mother of Ravi Coutinho, the subject of a recent ProPublica investigation, is suing Centene for publishing "misleading" information that gave her son a false impression about the kinds of mental health care that were actually available.
This article was published on Monday, June 2, 2025 in ProPublica.
The mother of an Arizona man who died after being unable to find mental health treatment is suing his health insurer, saying it broke the law by publishing false information that misled its customers.
Ravi Coutinho, a 36-year-old entrepreneur, bought insurance from Ambetter, the most popular plan on HealthCare.gov, because it seemed to offer plenty of mental health and addiction treatment options near his home in Phoenix. But after struggling for months in early 2023 to find in-network care covered by his plan, he wasn't able to find a therapist. In May 2023, after 21 calls with the insurer without getting the treatment he sought, he was found dead in his apartment. His death was ruled an accident, likely due to complications from excessive drinking.
Coutinho was the subject of a September 2024 investigation by ProPublica that showed how he was trapped in what's commonly known as a "ghost network." Many of the mental health providers that Ambetter listed as accepting its insurance were not actually able to see him. ProPublica's investigation also revealed how customer service representatives and care managers repeatedly failed to connect Coutinho to the care he needed after he and his mother asked for help. The story was part of a yearlong series, "America's Mental Barrier," that investigated the ways insurers employed practices that interfered with their customers' ability to access mental health care.
The lawsuit, filed on May 23 in Maricopa County by Coutinho's mother, Barbara Webber, accused the insurer Centene, along with the subsidiary that oversaw her son's plan, Health Net of Arizona, of publishing an "inaccurate and misleading" provider directory. The suit also accused the companies of breaking state and federal laws, including ones that require directories to be kept accurate.
The errors in the Ambetter directory gave Coutinho a false impression about the kinds of mental health care that were actually available, the lawsuit said. According to the lawsuit, the failure to correct those errors concealed the fact that Centene companies had provided insufficient services through the Ambetter plan.
The lawsuit draws upon the findings of ProPublica's investigation, summarizing Coutinho's repeated attempts to find a therapist in Ambetter's network and to get Centene representatives to connect him with a mental health provider that he could actually see.
The lawsuit also describes how Arizona insurance regulators had previously informed Health Net of Arizona that it had failed to maintain accurate provider directories. Health Net of Arizona promised to correct the errors. Regulators did not fine the insurer and declined to answer ProPublica's questions about whether the Centene subsidiary addressed their concerns.
Centene and Health Net of Arizona didn't respond to multiple requests for comment on the lawsuit. ProPublica previously reached out to Centene and Health Net of Arizona more than two dozen times and sent them both a detailed list of questions. None of their media representatives responded.
One of the 25 largest companies in America, Centene and its subsidiaries have been accused in past lawsuits of purposefully misrepresenting the number of in-network providers by publishing inaccurate directories. Centene lawyers have previously denied such claims in two of the bigger cases, in Illinois and California. Both cases are ongoing.
The top trade group for the industry, AHIP, has told lawmakers that companies contact in-network providers to ensure the listings are accurate. AHIP also stated that the companies could correct inaccuracies faster if providers did a better job updating their listings. Providers have told ProPublica, however, that insurers don't always remove their names from insurer lists when they officially request to leave their networks.
Mel C. Orchard III, a partner with The Spence Law Firm who is representing Webber, told ProPublica that he intended to bring the case before a jury to hold Centene accountable for negligence and consumer fraud. The lawsuit does not state a specified amount that Webber is seeking in damages.
"Ravi is an example of the abject failure of the insurance industry to do what it's supposed to do — and that is to insure us in times when we need them the most," Orchard told ProPublica. "Instead they prey upon our vulnerabilities; that is what happened in this case."
Deloitte Consulting is taking in tens of millions in tax dollars to build, manage and market Georgia's Medicaid work requirement program. Yet only 3% of eligible residents have enrolled.
This article was published on Wednesday, May 14, 2025 in ProPublica.
When the state of Georgia handed Deloitte Consulting a $10.7 million marketing contract last July to promote the nation's only Medicaid work requirement program, the initiative was in need of serious PR.
To get the word out, the state turned again to the firm that it had relied on to build and manage the program. About 60% of the marketing contract went toward creating and placing ads about Pathways on television and radio, including during NFL games and morning talk shows.
Much of the remainder of the seven-month contract would go toward two efforts: $250,000 per month for Deloitte-trained teams to hand out brochures and Pathways-branded merchandise at community events and $300,000 a month for Deloitte to produce reports about its own performance.
When Deloitte's publicity campaign ended in February, enrollment in Pathways remained less than 3% of the approximately 250,000 Georgians who are potentially eligible.
The marketing contract is part of a larger suite of services that Georgia has commissioned from Deloitte for its Medicaid experiment. Deloitte has made at least $51 million as of Dec. 31 to manage Pathways, including creating and maintaining its problematic software platform, as The Current and ProPublica previously reported. It is also earning at least $3 million more to oversee the state's relationship with federal regulators, including its application to extend the experiment beyond its expiration this fall.
Deloitte's outsize — and unusual — role in promoting the program it has built has allowed the firm to keep pulling in payments despite Pathways' struggles. And there is virtually no public accounting of how well it is increasing enrollment, a key goal of the policy experiment.
The marketing contract, obtained through a public records request, allows Deloitte to charge the state nearly half a million dollars for a final report on its publicity campaign, which was due to be submitted in February. When The Current and ProPublica requested the monthly and final performance reports, the state said they needed to be "reviewed" first and demanded $900 for that work. The news outlets did not pay because previous responses to public records requests for Deloitte's Pathways contracts were heavily redacted, with the general counsel's office at the Department of Community Health citing "confidential/trade secret." The agency did not charge for those records.
The state recently approved another $10 million to Deloitte, Fiona Roberts, spokesperson for the Department of Community Health, Georgia's Medicaid agency that oversees Pathways, said in response to questions about the effectiveness of Deloitte's marketing efforts. The new marketing contract, which runs until November, includes more community meetings and a text message campaign by Salesforce Marketing Cloud rolling out in May to potentially eligible Georgians, Roberts said.
"In 20 years of researching these kinds of programs, I can't think of another instance like this" in which a state has selected a for-profit company to both manage and market a federal benefit program, said Joan Alker, executive director for Georgetown University's McCourt School of Public Policy Center for Children and Families, where researchers have concluded that Medicaid work requirements prevent people from accessing health insurance.
Deloitte has designed and managed Medicaid and other benefit programs for many states, including Georgia, making the firm one of the nation's experts in government health policy. But Alker said that when states want to educate and enroll residents in federal safety net programs, they typically select local nonprofits that have established relationships with low-income communities. Georgia's arrangement with Deloitte raises questions, she said, about "whether the state is more committed to spending money on consultants or poor people."
Deloitte, which has been in charge of the Pathways communications strategy for the past three years, declined to answer questions about its Georgia Pathways work, referring requests for information to the Department of Community Health. A contract signed in 2023 worth approximately $7 million stipulates that Deloitte would "develop first draft of response to media inquiries" on behalf of the Department of Community Health, but that responses "will be submitted by DCH and not Deloitte." Deloitte's duties also include drafting talking points for media interviews, including for the governor.
Roberts declined repeated requests for an interview with agency officials. When asked about Deloitte's marketing and outreach work and whether the firm has met the state's goals, she described the effort as a "robust, comprehensive awareness and outreach campaign throughout the state" that has generated 1.6 million visitors to the Pathways website since the campaign's August 2024 launch.
"The state has invested heavily in marketing and outreach to reach Georgians potentially eligible for Pathways," Roberts said in a written statement.
Gov. Brian Kemp has described Pathways as an innovative alternative to expanding Medicaid, something 40 other states have done. By contrast, Georgia's program covers only the poorest individuals who can prove they are working, studying or volunteering at least 80 hours a month. Congressional Republicans are pointing to similar work requirements as a model in their budget negotiations.
In early 2024, less than a year after Pathways' launch, however, Georgia legislators — including some of Kemp's Republican allies — considered ending the experiment and instead expanding Medicaid without any work requirements. Georgia's uninsured rate was 11.4%, or 1.2 million people, compared to the national average of 8% in 2023, the latest data available, according to KFF, a nonprofit focused on national health issues. State data showed that Pathways enrollment was well under the first-year target of 25,000 published in Georgia's agreement with the federal government. As of April 25, approximately 7,400 Georgians were enrolled, according to the Department of Community Health.
An independent evaluation team commissioned by the state recommended ways to boost enrollment in a December 2024 report. The evaluators, Public Consulting Group, highlighted North Carolina's strategy of allowing residents from rural communities and communities of color to help create outreach campaigns for its expanded Medicaid program in 2023. North Carolina Medicaid officials told The Current and ProPublica that they designed their outreach efforts to maximize participation in the new program, with a two-year target of enrolling 600,000 people. They achieved that goal within one year.
Georgia and Deloitte, however, took a different tack. The $10.7 million marketing contract does not lay out specific enrollment goals as a way of measuring the success of Deloitte's efforts. The purpose of Pathways "is not and has never been to enroll as many Georgians as possible," according to the state's application to the federal government to continue the experiment.
The contract budgeted $247,000 to create up to four testimonial videos featuring satisfied Pathways clients; only one can be found on the state Medicaid agency's YouTube channel, where it has received approximately 350 views since it was posted in January. The state did not respond when asked how many testimonials Deloitte produced.
Meanwhile, another part of Deloitte's marketing strategy has also failed to catch wind: Deloitte had sent public relations teams to dozens of community events including farmers markets, a school Christmas pageant and a catfish festival to plug Pathways and encourage applications.
In March, one such team drove two hours from Atlanta to a health fair in Central Georgia's rural Washington County. At the Pathways booth, the Deloitte team barely looked up from their phones for three hours. Residents largely bypassed the team to chat with locals staffing other kiosks where they could receive diapers, information on subsidized in-home nursing care and blood pressure screenings. Of those who stopped at the Pathways booth, only a handful asked about enrollment.
Other public events were tied to the state's pursuit of federal permission to extend the Pathways program beyond September, when its original five-year mandate expires. Georgia is once again paying Deloitte to ensure that happens.
The monthslong process, managed by Deloitte, requires opportunities for public comment. A summary of these comments must be submitted with the application, which Deloitte is drafting. Health advocacy organizations say public outreach for this effort, especially to Black Georgians, has been superficial at best.
The only notice for two virtual public meetings appeared on a Department of Community Health web page that was not linked from the agency's homepage. During both virtual events, health care advocates criticized the program's inequitable access, but state officials did not engage with the speakers.
A third event — an in-person meeting in the rural 10,000-person town of Cordele — was added later and posted on the same website just one week before it was scheduled to occur. Only about a dozen people, some traveling for more than 80 miles, showed up to the noon meeting on St. Patrick's Day.
The low attendance reflected the meeting's out-of-the-way location and holiday timing, not a lack of public interest, said attendee Sherrell Byrd, executive director of Sowega Rising, a community advocacy group based in the majority Black town of Albany.
Inside the one-story cinder block building, three state health officials sat along a table at the front of the largely vacant room. One by one, attendees rose to the microphone to complain of technical glitches in the Pathways enrollment process, the lack of customer service and the generational health care inequalities faced by Black Georgians.
Tanisha Corporal, who lives approximately 140 miles away in Atlanta, was the only person to participate virtually. She told the Department of Community Health officials that she had submitted a Pathways application three times over the Deloitte-built digital portal only to have her file disappear. The licensed clinical social worker whose nonprofit job ended in January 2024 said state agencies offered her little enrollment support.
The state health officials did not respond to any of the speakers during the meeting. Grant Thomas, Kemp's former health policy advisor and deputy director of the state Medicaid agency, sat in the back of the room and did not interact with the attendees. Thomas declined to speak on the record.
"There is a lot of disdain for real-life problems of Georgians who look like us," Byrd said.
Robin Kemp of The Current contributed reporting.
This article was produced for ProPublica's Local Reporting Network in partnership with The Current. Sign up for Dispatches to get stories like this one as soon as they are published.
Drug companies in the U.S. face few restraints on what to charge for their products. A bipartisan bill would penalize those companies that sell their drugs at higher prices than the average of the prices in other wealthy nations.
This article was published on Friday, May 9, 2025 in ProPublica.
In the U.S., the price of Revlimid, a brand-name cancer drug, has been increasing for two decades. It now sells for nearly $1,000 a pill. In Europe, the price has been consistently lower — in some countries by two-thirds.
I started reporting on Revlimid after I was prescribed the drug following a diagnosis of multiple myeloma, an incurable blood cancer. Stunned by the high price, I found that the drugmaker, Celgene, had used Revlimid as its own personal piggy bank for more than a decade, raising the price in the U.S. whenever it saw fit.
Even with lower prices in Europe, Celgene still made a profit there, a former executive told Congress. That added to the more than $21 billion in net earnings the company made after Revlimid was introduced in 2005.
Of course, Revlimid isn't the only drug with a price disparity. Americans pay more in general for prescription drugs than people in other wealthy countries. And costs keep going up, saddling patients with crippling debt or forcing them to choose between filling prescriptions or buying groceries. So why do we pay so much more? And is anything being done about it?
In most other wealthy countries, governments set a single price for a drug that is usually based on analysis of the therapeutic benefit of the medicine and what other countries pay. In the U.S., drug companies determine what to charge for their products with few restraints. Insurance companies can refuse to cover a drug to try to negotiate a lower price, but for some diseases like cancer, that poses a risk of public backlash. Cancer is a "very politically charged disease," said Dr. Aaron Kesselheim, a Harvard Medical School professor who studies drug pricing and regulation. Some states also mandate that insurers cover certain cancer drugs.
Pharmaceutical companies have consistently argued that American drug prices reflect the cost of research and development. Americans may pay more, but they also benefit from having first-line access to cutting-edge treatments. (Celgene has since been acquired by Bristol Myers Squibb, which says its price for Revlimid, which it increased in the U.S. last year by 7%, "reflects the continued clinical benefit Revlimid brings to patients, along with other economic factors.")
Dr. Hagop Kantarjian, a leukemia specialist at MD Anderson Cancer Center who studies drug pricing, said that pharmaceutical companies often overstate the cost of developing drugs and that many drug discoveries originate in hospital and academic labs funded through government grants. Funding from the U.S. National Institutes of Health contributed to all but two of the 356 drugs approved by the Food and Drug Administration from 2010 to 2019, according to a Bentley University study. Companies also don't spend all their profits on innovation: The 14 largest drug companies in the world spent more on stock buybacks and dividend payments to investors than on research and development, according to a 2021 analysis by the U.S. House Oversight Committee.
One possible solution to bring down costs: tie American prices to what drugmakers charge in other wealthy countries. The Congressional Budget Office found last year that this would have the biggest impact on reducing costs of seven proposals it studied. It's an idea with bipartisan support.
Sens. Josh Hawley, R-Mo., and Peter Welch, D-Vt., introduced a bill this week that would penalize pharmaceutical companies that sell their drugs at higher prices than the average of the prices in Canada, France, Germany, Japan, Italy and the United Kingdom. Companies that sell above the average would face civil penalties equal to 10 times the difference between the U.S. list price and the average price in those other countries.
President Donald Trump has advocated for similar actions. During his first term, he issued an executive order directing the Medicare program to employ a "most favored nation" approach in paying for drugs. The administration later developed a rule directing Medicare to select the lowest price from a basket of similar countries and make that the maximum amount the agency would pay for 50 drugs administered by doctors. A court blocked the rule from being implemented in the last days of the first administration.
Now, according to reports this week, the administration is pushing plans to tie Medicaid and Medicare prices to lower prices charged in other countries.
Linking U.S. prices to those in other countries is opposed by industry groups who say it would leave decisions on medications to the government rather than doctors and patients.
"Government price setting in any form is bad for American patients," said Alex Schriver, a spokesperson for the Pharmaceutical Research and Manufacturers of America, an industry group. He said efforts should be focused on fixing "the flaws in the U.S. system," including money that flows to intermediaries such as pharmacy benefit managers.
Some critics also warn so-called international reference pricing can be gamed and allows foreign governments to essentially set the value of medicines sold in the U.S.
The Trump administration is expected to announce drug pricing plans as early as Monday, according to a report. The White House did not respond to a request for comment.
Despite a congressional mandate to expand care for veterans, internal Veterans Affairs messages obtained by ProPublica paint a stark portrait of how chaotic cost cutting has already imperiled tests of treatments for cancer, opioid addiction and more.
This article was published on Tuesday, May 6, 2025 in ProPublica.
Earlier this year, doctors at Veterans Affairs hospitals in Pennsylvania sounded an alarm. Sweeping cuts imposed by the Trump administration, they told higher-ups in an email, were causing "severe and immediate impacts," including to "life-saving cancer trials."
The email said more than 1,000 veterans would lose access to treatment for diseases ranging from metastatic head and neck cancers, to kidney disease, to traumatic brain injuries.
"Enrollment in clinical trials is stopping," the email warned, "meaning veterans lose access to therapies."
The administration reversed some of its decisions, allowing some trials to continue for now. Still, other research, including the trials for treating head and neck cancer, has been stalled.
President Donald Trump has long promised to prioritize veterans.
"We love our veterans," he said in February. "We are going to take good care of them."
After the Department of Veterans Affairs began shedding employees and contracts, Trump's pick to run the agency, Secretary Doug Collins, pledged, "Veterans are going to notice a change for the better."
But dozens of internal emails obtained by ProPublica reveal a far different reality. Doctors and others at VA hospitals and clinics across the country have been sending often desperate messages to headquarters detailing how cuts will harm veterans' care. The VA provides health care to roughly 9 million veterans.
In March, VA officials across the country warned that a critical resource — databases for tracking cancer — would no longer be kept up to date. As officials in the Pacific Northwest explained, the Department of Government Efficiency was moving to kill its contract with the outside company that maintained and ran its cancer registry, where information on the treatment of patients is collected and analyzed. DOGE had marked it for "immediate termination."
Officials at the VA centers in the Pacific Northwest said funding for their cancer research was "updated for immediate termination" after a review by the Department of Government Efficiency. Credit: Obtained by ProPublica
The VA in Detroit raised a similar alarm in an email, warning of the "inability to track oncology treatment and recurrences." The emails obtained by ProPublica detail a wide variety of disruptions. In Colorado, for instance, layoffs to social workers were causing homeless veterans waiting for temporary housing to go without help.
The warnings, sent as part of a longstanding system at the VA to alert higher-ups of problems, paint a portrait of chaotic retrenchment at an agency that just three years ago was mandated by Congress through the PACT Act to expand care and benefits for veterans facing cancer and other issues after exposure to Agent Orange, burn pits or other toxins.
Doctors and other health care providers across the VA have been left scrambling and short-staffed amid an ever-shifting series of cuts, hiring freezes and other edicts from the White House.
VA officials in Pittsburgh sent warnings about studies being impacted by a hiring freeze. These included studies on cancer, suicide prevention and exposure to toxins. Credit: Obtained by ProPublica
The upheaval laid bare in the emails is particularly striking because the cuts so far would be dwarfed by the dramatic downsizing in staff and shift in priorities the administration has said is coming.
The VA has cut just a few thousand staffers this year. But the administration has said it plans to eliminate at least 70,000 through layoffs and voluntary buyouts within the coming months. The agency, which is the largest integrated health care system in the U.S., currently has nearly 500,000 employees, most of whom work in one of the VA's 170 hospitals and nearly 1,200 clinics.
Despite an expanded role mandated by Congress through the PACT Act, administration officials have said their goal is to trim the agency to the size it was before the legislation passed.
"The Biden Administration understood what it meant to pay for the cost of war; it seems the Trump Administration does not," said Rep. Mark Takano, a California Democrat and chief author of the PACT Act.
Documents obtained by ProPublica show DOGE officials working at the VA in March prepared an outline to "transform" the agency that focused on ways to consolidate operations and introduce artificial intelligence tools to handle benefits claims. One DOGE document proposed closing 17 hospitals — and perhaps a dozen more.
VA press secretary Pete Kasperowicz told ProPublica that there would be no hospital closures. "Just because a VA employee wrote something down, doesn't make it VA policy," he said in a written statement. But he did say that use of AI will be a big part of what he called VA's "reform" efforts.
Kasperowicz dismissed the idea that the emails obtained by ProPublica show chaos.
"The only thing these reports show is that VA has a robust and well-functioning system to flag potential issues and quickly fix them so we can provide the best possible care to Veterans," he wrote.
DOGE did not respond to requests for comment.
The White House released a budget proposal last week that calls for a 4% increase in the VA's budget. That total includes more money for medical care, though a portion of that would be used to pay for veterans to seek care outside the VA medical system.
More answers to the VA's larger plans may come today, when Collins is scheduled to testify before the Senate Veterans Committee, his first hearing on Capitol Hill since coming into office.
David Shulkin, who headed the VA in Trump's first term, said the administration is too focused on cuts rather than communicating a strategy for improving care for vets.
"I think it's very, very hard to be successful with the approach that they're taking," Shulkin told ProPublica.
One way local VA officials have tried to limit the damage has been by sending warnings — formally known as an issue brief — to higher-ups. And sometimes it works.
After officials in Los Angeles warned that "all chemotherapy" would stop unless Washington backed off killing a service contract, the VA reversed its decision.
And, amid growing scrutiny, the administration also made some researchers in Pennsylvania and elsewhere exempt from cuts. The laid-off social workers who helped homeless vets in Colorado were also brought back after about a month away from their jobs. Kasperowicz said that four social workers were affected but "their caseload was temporarily redistributed to other members of the homeless team."
The warnings from officials across the country underscore how the comparatively modest cuts so far are already affecting the work of the VA's medical system, with the study and treatment of cancer cited in multiple warnings to agency leadership.
"We have absolutely felt the impact of the chaos all around us. We're already losing people," said one senior researcher, who spoke to ProPublica anonymously for fear of retaliation.
Referring to studies, he added: "We're going to be losing things that can't restart."
And while Kasperowicz told ProPublica that the issues in Pennsylvania have been resolved, locals there said that's not the case and that the impact is ongoing.
In Pittsburgh, two trials to treat veterans with advanced head and neck cancer, which officials in March had warned were at risk because of hiring freezes, have still not started, according to Alanna Caffas, who heads a Pittsburgh nonprofit, the Veterans Health Foundation, that partners with the VA on research.
"It's insane," Caffas said. "These veterans should be able to get access to research treatments, but they can't."
VA employees in Pittsburgh sent a warning that they had lost research staff because of the hiring freeze. Credit: Obtained and highlighted by ProPublica
A third trial there, to help veterans with opioid addiction, wasn't halted. Instead, it was hobbled by layoffs of key team members, according to Caffas and another person involved in the research.
Regarding the issues with cancer registries, Kasperowicz said there had been "no effect on patients." He added that the VA is moving to create a national contract to administer those registries.
Rosie Torres, founder of Burn Pits 360, the veterans advocacy group that also pushed hard for the legislation, called the emails showing impeded cancer treatment a "crisis in the making" and "gut wrenching."
That the decisions are being made without input from the communities of vets they affect is worse, she added.
"If they are killing contracts that may affect the delivery of care, then we have a right to know," she said.
Last week, as the second Trump administration marked its first 100 days in office, Collins celebrated what he described as its achievements.
In a recorded address, he said that under his stewardship the VA processed record numbers of benefit claims, ended "divisive" spending on diversity initiatives and redirected millions of agency dollars from "non-mission-critical" programs back toward services to benefit veterans.
"We will not stop working to put veterans first," he wrote in an accompanying op-ed.
Others say Collins has done no such thing. Instead of focusing on veterans, said one VA oncologist, "we're spending an enormous amount of time preparing for a staffing catastrophe."
"Veterans' lives are on the line," the doctor said. "Let us go back to work and take care of them."
FDA inspectors found serious problems at a Glenmark factory in India that manufactured the recalled drugs. Another medication made there has been tied to deaths of U.S. patients.
This article was published on Wednesday, April 16, 2025 in ProPublica.
Glenmark Pharmaceuticals has recalled two dozen generic medicines sold to American patients because the Indian factory that made them failed to comply with U.S. manufacturing standards and the Food and Drug Administration determined that the faulty drugs could harm people, federal records show.
In February, the FDA found problems with cleaning and testing at the plant in Madhya Pradesh, India, which was the subject of a ProPublica investigation last year. The current recalls, listed in an FDA enforcement report last week, cover a wide range of commonly prescribed medicines, including ones that treat epilepsy, diabetes, multiple sclerosis, heart disease and high blood pressure, among other ailments. A full list of the recalled medications is available here.
The agency determined that the drugs could cause temporary or reversible harm and that the chance of more serious problems was remote. However, the FDA didn't say what symptoms the flawed drugs could cause. ProPublica asked the FDA and Glenmark for more specifics, but neither responded.
Records show that Glenmark first alerted wholesalers about the recalls in a March 13 letter. That letter suggests that Glenmark pulled the drugs because of potential cross-contamination. Thomas Callaghan, Glenmark's executive director of regulatory affairs for North America, wrote that 148 batches of the recalled medicines were made "in a shared facility" with two cholesterol-lowering drugs, ezetimibe and a combination of that drug and simvastatin.
That's a concern because the chemical structure of ezetimibe contains what's known as a beta-lactam ring. FDA safety experts pay attention to this because many beta-lactam drugs, particularly penicillin, can cause life-threatening allergies and hypersensitivity reactions. It's the most commonly reported drug allergy in the U.S. Because of that danger, the FDA requires manufacturers to follow special precautions to prevent cross-contamination with drugs that contain a beta-lactam ring, even if they aren't antibiotics.
The chemical structure of ezetimibe, Callaghan wrote to Glenmark's wholesalers, shows it is unlikely to cause such hypersensitivity reactions. Nevertheless, Glenmark was recalling the drugs "based on risk assessment and out of an abundance of caution," Callaghan wrote. He added, "This recall is being made with knowledge of the Food and Drug Administration."
According to Callaghan's letter, the potential problem dates back years. The executive wrote that Glenmark began shipping the drugs on Oct. 4, 2022.
In December, ProPublica revealed that the Glenmark factory was responsible for an outsized share of U.S. recalls for pills that didn't dissolve properly and could harm people. At the time, the FDA hadn't inspected the plant since before the COVID-19 pandemic, even though one of those recalls had been linked to deaths of American patients.
About two months after that investigation was published, FDA officials returned to the factory — the agency's first inspection in five years. Inspectors discovered that Glenmark hadn't properly cleaned equipment to prevent contamination of medicines with residues from other drugs. The federal investigators also noted that Glenmark routinely released some drugs to the U.S. market using test methods that hadn't been adequately validated, according to the inspection report.
What's more, when some Glenmark tests found problems with a drug, the company at times declared those results invalid and "retested with new samples to obtain passing results," the inspection report said. "The batches were ultimately released to the US market."
In their detailed report, the inspectors listed drugs shipped to U.S. customers who had been affected by the potential contamination and testing problems, but FDA censors redacted page after page, making it impossible to know which medicines may not be safe. An FDA attorney said the information was being withheld because it contained trade secrets or commercial information that was considered privileged or confidential.
ProPublica first asked Glenmark about that inspection on March 7 after obtaining the FDA report through the Freedom of Information Act. Glenmark alerted wholesalers about the recalls less than a week later, but the company and the FDA didn't tell ProPublica.
Instead, a Glenmark spokesperson sent a statement saying the company was "committed to working diligently with the FDA to ensure compliance with manufacturing operations and quality systems." And the FDA said it could discuss potential compliance matters only with the company involved.
The FDA first mentioned the recalls publicly in its April 8 enforcement report, which is like an electronic filing cabinet for recalls. The recalls do not appear on the FDA's recalls website, which compiles press releases written by pharmaceutical companies.
ProPublica asked the FDA and Glenmark why they didn't alert the public last month that these medicines had been recalled, but neither responded.
Glenmark is embroiled in a federal lawsuit that alleges recalled potassium chloride capsules made at its Madhya Pradesh factory caused the death of a 91-year-old Maine woman in June. The FDA had determined last year that more than 50 million of those recalled Glenmark extended-release capsules had the potential to kill U.S. patients because they didn't dissolve correctly and could lead to a perilous spike in potassium. In court filings, Glenmark has denied responsibility for the woman's death.
Since that potassium chloride recall, Glenmark has told federal regulators it has received reports of eight deaths in the U.S. of people who took the recalled capsules, FDA records show. Companies are required to file such reports so the agency can monitor drug safety. The FDA shares few details, though, so ProPublica was unable to independently verify what happened in each case. In general, the FDA says these adverse event reports reflect the opinions of the people who reported the harm and don't prove that the drug caused it.
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."
Chapter 2
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.
Chapter 3
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.
Chapter 4
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.
Questions about whether oncologist Dr. Thomas Weiner would be permitted to continue practicing medicine intensified after a ProPublica investigation exposed a trail of patient harm tied to his practice.
In late 2020, St. Peter's Hospital in Helena, Montana, fired its oncologist, Dr. Thomas C. Weiner, and took the extraordinary step of publicly accusing him of hurting patients. The hospital said the doctor overprescribed narcotics and gave chemotherapy to patients who didn't have cancer, among other allegations.
Despite being notified by St. Peter's that it had revoked Weiner's privileges, the Montana Board of Medical Examiners renewed his license in 2021 and 2023. This week, the board renewed his license again for another two years.
Questions about whether Weiner would be permitted to continue practicing medicine intensified after a December ProPublica investigation exposed a trail of patient harm and at least 10 suspicious deaths tied to his practice. That investigation, which relied on thousands of pages of court records and dozens of interviews, detailed how Weiner built a high-volume business that billed as much as possible to public and private insurance while many of his patients received unnecessary, dangerous or substandard care.
While it's unclear what the medical board considered before renewing Weiner's license, the investigation published by ProPublica and Montana Free Press caught the attention of law enforcement. Criminal investigators with the Montana Department of Justice launched an official inquiry this month, according to three sources directly involved in the matter.
Weiner has denied mistreating his patients. He did not respond to a request for comment about his license being renewed and the Montana Department of Justice investigation.
After St. Peter's fired Weiner, he sued the hospital for wrongful termination and defamation. After a four-year legal battle, the Montana Supreme Court sided with the hospital in a ruling this month. The court wrote that the hospital's peer-review process leading to Weiner's dismissal was "reasonable and warranted due to the quantity and severity of Weiner's inappropriate patient care."
After it fired Weiner, the hospital inspected the files of more than 2,000 patients to whom he had prescribed controlled substances. Court records show that medical reviewers hired by St. Peter's highlighted the case of Sharon Dibble, a 75-year-old patient who died shortly after Weiner doubled her morphine prescription. That increase in morphine "led to respiratory arrest and the patient's demise," a medical expert hired by St. Peter's concluded.
Dibble's son, Tom Stevison, called the medical board's decision to renew Weiner's license "ridiculous."
"There's just too much evidence against him, pointing to wrongdoing, to recklessly relicense this guy," he said, referring to the hospital's allegations and ProPublica's reporting. "I do believe he should be held accountable."
Weiner previously denied the allegation that he overprescribed patients, including Dibble, and was critical of the medical review.
In the months after Weiner was fired, thousands of friends and former patients formed Facebook groups in support of him. They raised funds to rent a billboard in Helena that read, "WE STAND WITH DR. WEINER." On Tuesday, Dayna Schwartz, who led that effort, posted on Facebook, "Congrats Doc on your license renewal!!"
A spokesperson for the state Board of Medical Examiners referred a request for comment about Weiner's license renewal to its umbrella agency, the Montana Department of Labor and Industry. An agency spokesperson did not respond to questions before publication.
St. Peter's did not respond to requests for comment on the renewal of Weiner's license.
The medical board does not typically release information about current or past investigations unless it substantiates allegations of professional misconduct. If it does, a doctor's license can be suspended or revoked for many reasons, including billing fraud, unprofessional prescribing practices and failure to appropriately document patient care.
The criminal inquiry, led by the Montana Attorney General's Office, comes just months after the federal government settled with St. Peter's for making false claims when it billed government health programs for Weiner's services. The hospital agreed to pay back $10.8 million. The hospital has previously said it provides quality care and "this situation is isolated to a single, former physician, and we remain confident in the exceptional care provided by St. Peter's medical staff."
Federal prosecutors also sued Weiner, accusing him of an array of fraudulent practices, including billing federal insurance programs for unnecessary treatments or more expensive treatments than were delivered. Weiner has denied the allegations and, through attorneys, has moved to dismiss the case.
