Colorado Supreme Court rejects hospital's bid to enforce $229K spine surgery bill

Carly Behm -  

A spine surgery patient will not be on the hook for a $229,112 medical bill at Westminster-based St. Anthony North Health Campus, the Colorado Supreme Court ruled May 16.

In 2014, Lisa Melody French had a pair of spine surgeries at St. Anthony, part of Centennial, Colo.-based Centura Health. St. Anthony cannot sue Ms. French for payment of the bill because she had no knowledge of nor consented to the hospital's chargemaster, a list of billable services and items for patients or their insurer, the court ruled.

"Hospital chargemasters have become increasingly arbitrary and, over time, have lost any direct connection to hospitals’ actual costs, reflecting, instead, inflated rates set to produce a targeted amount of profit for the hospitals after factoring in discounts negotiated with private and governmental insurers," Justice Richard Gabriel wrote in the court's opinion.

Ms. French claimed she signed a contract in which she agreed to pay "all charges of the hospital" for her care, but St. Anthony estimated it would cost her $1,337 out of pocket and her insurer would cover the rest. Instead, the bill was $303,709. She paid $1,000, her insurer paid $73,598 and the remainder was disputed.

But after surgery, Centura said it misread Ms. French’s insurance information and only then discovered she was an out-of-network patient. Centura then billed Ms. French $229,112 and sued her for breach of contract to collect.

Attorneys for the patient argued a hospital representative mistakenly told her that her insurance was in network, the contract she signed was ambiguous and she should not be responsible for paying the $229,112.

St. Anthony claimed it is the patient's responsibility to understand their insurance and determine in-network status, but the Supreme Court rejected the hospital's argument, overturning a Colorado Court of Appeals ruling in favor of the provider.

The Supreme Court ruling said the contract Ms. French signed does not reference the hospital's chargemaster and leaves the meaning of "all charges" as ambiguous.

Barak Richman, a law and business administration professor at Durham, N.C.-based Duke University, said the ruling would ensure patients have informed consent before incurring charges, the The Denver Gazette reported May 16. The ruling would not prevent hospitals from making emergency decisions, he told The Gazette.

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