When Lisa Melody French needed back surgery after a car accident, she went to a hospital near her home outside of Denver, which reviewed her insurance information and told her she would be personally responsible for paying approximately $1,337.
But after the surgery, the hospital claimed it had “misread” her insurance card and that she was, in fact, an out-of-network patient, court papers said. As a result, Centura Health, which operated the hospital, billed her $229,112.13. When she didn’t pay, Centura sued her.
“I was afraid of it,” said Ms. French, 60, a clerk at a transportation company, who eventually filed for bankruptcy. “I didn’t understand because I trusted the hospital and my insurance company to figure out what I had to pay.”
This week, after a years-long legal battle, the Colorado Supreme Court ruled that Ms. French did not have to pay nearly $230,000 for spinal fusion surgery she underwent in 2014 at St. Anthony North Hospital in Westminster, Colorado.
It said she would have to pay just $766.74, apparently reflecting the rest of her balance, as previously determined by a jury.
“I was very happy,” Mrs. French said Friday. “I was happy, not only for myself, but also for other people. I think most people don’t understand, like I didn’t understand, how insurance and hospitals work.”
Centura Health did not immediately respond to requests for comment.
The unanimous verdict covered what Ms French described as a stressful ordeal that began when her doctor referred her to St. Anthony North and told her she needed back surgery or that she could be paralyzed in a fall.
“Personally, it was very difficult because I had never had surgery before,” she said. “I was already afraid of that.”
Before her surgery, Mrs. French two service agreements in which they promised to pay “all the costs of the hospital”.
Centura claimed that because Ms. French was an out-of-network patient, those service agreements required her to pay the full rates listed in a giant health system database known as a chargemaster — a catalog of the cost of each procedure and medical supply. Center provided.
According to Centura, the service agreements were “unambiguous and French’s agreement to pay ‘all costs’ could ‘only mean’ the predetermined rates set by Centura’s prosecutor,” the court said.
But the court ruled that Ms. French was not responsible for paying those fees, because she did not know the prosecution even existed and had not agreed to its terms.
The court said the accuser was not named “even obliquely” in any of the patient rights service agreements or forms that Ms French signed.
“Indeed, Centura representatives testified that the chargemaster had not been provided to patients, and it was precisely in this lawsuit that Centura refused to hand over its chargemaster to French, arguing that it was proprietary and a trade secret,” Judge Richard L. Gabriel wrote. .
Justice Gabriel pointed out that courts and commentators have noted that hospital prosecutors have “become more and more arbitrary and over time have lost any direct connection to the true costs of hospitals, instead due to high rates that have been set.” to produce a targeted amount of profit for the hospitals, taking into account discounts agreed with private and government insurers.”
Chargemasters, used by hospitals across the country, have long been a source of confusion for patients trying to decipher what they might pay for a particular procedure, despite efforts to demand more transparency.
“They have no basis in reality,” said Gerard F. Anderson, a professor of health policy and management and professor of international health at Johns Hopkins University Bloomberg School of Public Health.
“The hospital cannot explain to anyone why they are charging the prices they charge,” he said. “They are not based on cost. They are not based on accounting principles. They are fictitious instruments made by someone in the hospitals.”
In 2019, the Trump administration ordered hospitals to list prices for all their services, theoretically giving consumers greater clarity and choice and forcing healthcare providers into price competition.
But the data, put into spreadsheets online for thousands of procedures, was often incomprehensible and unusable for patients – a jumble of numbers and technical-medical terms, presented in formats that differ from hospital to hospital.
“Essentially, the patient cannot shop for most hospital services comparatively,” said Professor Anderson. “There are just too many moving parts. There are too many different services you would need.”
Ms French called the accuser “a mystery” and said she had no idea she was agreeing to the rates when she signed the hospital’s service agreements.
“I’m just glad it’s over,” she said. “And I hope it benefits people who have been through the same thing I have and may go through in the future.”