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.

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