When Lisa Melody French needed back surgery after a car accident, she went to a hospital near her home outside of Denver, who reviewed her insurance information and told her that she would be personally responsible for paying approximately $1,337.
But after the surgery, the hospital claimed he had “misread” her insurance card and that she was, in fact, an out-of-network patient, according to court documents. As a result, Centura Health, which operated the hospital, billed him $229,112.13. When she failed to pay, Centura sued her.
“I was scared,” said Ms French, 60, a clerk at a trucking company, which eventually filed for bankruptcy. “I didn’t understand because I was sort of relying on the hospital and my insurance company to figure out what I had to pay.”
This week, after a year-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 at St. Anthony North Hospital in Westminster, Colorado, in 2014.
He indicated that she would only have to pay $766.74, apparently mirroring the rest of her balance, as previously determined by a jury.
“I was very happy,” Ms French said on Friday. “I was happy not only for myself, but for others. I think most people don’t understand, like me, how insurance and hospitals work.
Centura Health did not immediately respond to requests for comment.
The unanimous decision capped what Ms French described as a stressful ordeal that began when her doctor referred her to St. Anthony North, telling her she needed back surgery or she might be paralyzed in a fall.
“Personally, it was really difficult because I had never had an operation before,” she said. “I was already afraid of that.”
Prior to her operation, Ms. French signed two service agreements promising to pay “all hospital costs”.
Centura claimed that because Ms. French was an out-of-network patient, these service agreements required her to pay full rates, listed in a giant healthcare system database known as chargemaster – a catalog of the cost of every procedure and medical supply Centura provided.
In Centura’s opinion, the service agreements “were unambiguous and French’s agreement to pay ‘all charges’ ‘could only mean’ the pre-determined rates set by Centura’s charge-man,” said the court.
But the court found that Mrs French was not responsible for paying those rates because she did not even know the chargemaster existed and had not agreed to his terms.
The court said the charge master was not mentioned ‘even obliquely’ in any of the service agreements or patient bill of rights forms signed by Ms French.
“Indeed, Centura representatives testified that the charge master was not provided to patients, and in that same litigation, Centura refused to produce its charge master in French, claiming that it was proprietary and a trade secret,” Judge Richard L. Gabriel wrote.
Judge Gabriel pointed out that courts and commentators have noted that those responsible for charging hospitals have become “increasingly arbitrary and, over time, have lost any direct connection to actual hospital costs, instead reflecting inflated rates set to produce a targeted amount of profit for hospitals after taking into account discounts negotiated with private and government insurers.
Chargemasters, which are used by hospitals across the country, have long been a source of confusion for patients trying to decipher what they can pay for a given procedure, despite efforts to demand more transparency.
“They have no basis in reality,” said Gerard F. Anderson, professor of health policy and management and professor of international health at Johns Hopkins University Bloomberg School of Public Health.
“The hospital can’t explain to anyone why they charge the prices they charge,” he said. “They are not cost-based. They are not based on accounting principles. They are fictitious instruments created by someone in the hospitals.
In 2019, the Trump administration ordered hospitals to start listing prices for all of their services, theoretically giving consumers more clarity and choice and forcing health care providers to compete on price.
But the data, published online in spreadsheets for thousands of procedures, has often been incomprehensible and unusable to patients – a thicket of numbers and technical medical terms, displayed in formats that vary from hospital to hospital. ‘other.
“Essentially, the patient lacks the ability to comparison shop for the majority of hospital services,” Professor Anderson said. “There are just too many moving parts. There are too many different services you would need.
Ms French called the chargemaster a ‘mystery’ and said she had no idea she was accepting his rates when she signed the hospital’s service agreements.
“I’m just glad it’s over,” she said. “And hopefully it will benefit people who have gone through the same thing as me and may go through in the future.”