Colorado Supreme Court docket rules in favor of girl who expected to pay $1,337 for surgery but was charged $303,709

A girl who anticipated to pay $1,337 for surgery at a Westminster hospital nearly a decade ago but was billed $303,709 may finally be off the hook for the large bill after the Colorado Supreme Courtroom ruled in her favor Monday.

The justices unanimously found that the contracts affected person Lisa French signed before a pair of back surgeries in 2014 at St. Anthony North Well being Campus do not obligate her to pay the hospital’s secretive “chargemaster” value rates, because the chargemaster — an inventory of the hospital’s sticker costs for numerous procedures — was never disclosed to French and he or she had no concept the chargemaster existed when she signed the contracts.

At the time, the hospital had represented to French that the surgeries were estimated to price her $1,337 out of pocket, together with her medical insurance supplier masking the remainder of the invoice.

However the hospital’s estimate was primarily based on French’s insurance coverage provider being “in-network” with the hospital, which it was not. A hospital employee gave a mistaken estimate after apparently misreading French’s insurance card.

After her surgical procedures, the hospital billed $303,709 for French’s care; her insurance coverage paid about $74,000 and the remaining balance of $228,000 was disputed in a civil case.

Attorneys for Centura Well being, which operates the nonprofit hospital, had argued that the contracts, which required French to pay “all prices of the hospital” for her care, implicitly included the hospital’s then-secret pricing schema.

The state Supreme Courtroom justices rejected that argument, finding that “long-settled principles of contract law” show that French didn't agree to pay the chargemaster prices when she signed the contracts, which never point out or reference the chargemaster.

“(French) assuredly couldn't assent to phrases about which she had no knowledge and which have been by no means disclosed to her,” Justice Richard Gabriel wrote in the court’s opinion.

The justices also famous that chargemaster prices are divorced from actual prices for care. Few patients truly pay the chargemaster’s sticker costs for care, because insurance coverage firms negotiate decrease prices with the hospital to become “in-network.”

“…Hospital chargemasters have change into increasingly arbitrary and, over time, have lost any direct connection to hospitals’ actual costs, reflecting, as a substitute, inflated rates set to provide a targeted quantity of profit for the hospitals after factoring in reductions negotiated with private and governmental insurers,” Gabriel wrote.

Colorado lawmakers in 2017 handed a legislation requiring hospitals to make some self-pay prices public, and in 2019, a federal agency required hospitals to make their chargemaster costs public. None of those protections were in place when French underwent her surgeries in 2014.

Monday’s resolution overturns the Colorado Courtroom of Appeals, which had present in favor of the hospital. The Court docket of Appeals’ ruling famous that hospitals can't all the time accurately predict what care a affected person will want, and so they can’t lock in a firm value, and concluded that the term “all charges” in French’s contract was “sufficiently particular” because the chargemaster charges have been pre-set and fixed.

The state Supreme Court docket justices as a substitute upheld the trial court docket’s ruling, in which a judge discovered the contracts have been ambiguous and despatched the case to a jury to find out whether or not French breached her contract with the hospital and, if so, how a lot she ought to pay.

Jurors determined she did breach her contract however solely owned the hospital a further $767. The state Supreme Courtroom’s ruling reinstates that verdict, said Ted Lavender, an attorney for French.

“This should be the end of the road for her,” he said of French. “This opinion reinstates the jury verdict, which was a win for her, and (the case) will now revert again to that win. I have spoken with her at this time and she could be very proud of the outcome.”

A spokeswoman for Centura Health didn't instantly remark Monday.