Woman who expected to pay $1,337 for surgery was billed $303,709

After Lisa French’s doctors warned that she could be paralysed if she tripped or fell on her back, the hospital told the Colorado resident that she’d have to pay an estimated $1,337 out of pocket for two procedures.

Money was tight, which is why Ms French and her husband used all the money in their emergency fund - $1,000 - to help cover for most of the cost expected after insurance for the back surgeries, according to her attorney.

So when she got the bill from St. Anthony North Health Campus in 2014, Ms French thought it was a mistake: The hospital had billed her for $303,709 - and she owed more than $229,000 out of pocket.

As part of the forms she filled out at the nonprofit hospital in Westminster, Colorado, operated by Centura Health, Ms French unknowingly had signed up to pay all charges related to the hospital’s then-secretive “chargemaster” price rates - a master list of prices that determined the sticker prices for everything the hospital did.

Years after Ms French argued she was never informed of the chargemaster and engaged in a years-long legal battle with the hospital, the Colorado Supreme Court ruled in her favour this week, saying she is not liable to pay the rest of the massive bill because she did not agree to the hospital’s secret pricing.

State Supreme Court Justice Richard Gabriel wrote in a Monday opinion that Centura Health’s argument that Ms French was required to pay “all charges of the hospital” was rejected because the “long-settled principles of contract law” showed the 60-year-old woman never agreed to pay the chargemaster rate.

“She assuredly could not assent to terms about which she had no knowledge and which were never disclosed to her,” Gabriel wrote in the opinion.

State and federal laws have since been passed forcing hospitals to make their chargemaster prices public. None of the laws were in place when Ms French had her surgeries in 2014, according to the Denver Post, the first to report the news.

Gabriel blasted the healthcare industry’s predatory billing practices in this week’s opinion, noting that “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.”

A spokesperson with Centura Health did not immediately respond to a request for comment on Thursday.

Ted Lavender, Ms French’s attorney, told The Washington Post that her case reflects how some hospitals give “no effort to provide meaningful information to the patient and the cost of a procedure.”

About $197,000 of the total $303,709 bill stemmed from 13 pieces of spinal hardware that were marked up significantly from their estimated cost of about $31,000, Mr Lavender said.

“It’s not unlike that of everyday Americans who go to hospitals with a medical need and sign paperwork placed in front of them to create contract about the medical treatment about to be rendered,” Mr Lavender said. “It was very telling in Ms. French’s case.”

Most US hospitals are still not complying with federal regulations requiring medical centres to post their prices online for patients to review, according to a 2021 report by patient advocates.

The report, which surveyed the websites of 500 of the roughly 6,000 hospitals subject to the rule, found that 471 of the hospitals did not fully post the prices they charge patients and the rates they have negotiated with insurers. The federal price transparency rules took effect on 1 Jan 2021.

Lingering complications from a car wreck forced Ms French to look into spinal-fusion surgery near her home in Thornton, Colorado, located about 12 miles outside of downtown Denver. Ms French, a mother of five with Type 2 diabetes, struggles financially to keep her family afloat, especially since her husband can’t work because of a disability, reported the Denver Post.

When she went to the hospital, Ms French was quoted the $1,337 out-of-pocket price before the surgery - a figure based on her health insurance provider being in-network with the hospital. But when a hospital employee mistakenly gave Ms French the estimate after misreading her insurance card, Centura Health did not notify Ms French of the change, according to a lawsuit.

As an office clerk at a trucking company, Ms French’s insurance plan was connected to ELAP Services, a firm based in Wayne, Pennsylvania, that audits hospital bills to assess the value of the medical services provided, Mr Lavender said. After her surgeries were completed, ELAP advised French’s employer-based insurer to not pay her hospital bill of roughly $229,000, alleging she had been grossly overbilled. ELAP and the insurer agreed to pay about $74,000. Centura Health disagreed with ELAP and sued Ms French for the rest of the bill in 2017.

“That was shocking to her,” Mr Lavender, an Atlanta-based attorney who was appointed by ELAP to represent French, told The Post.

Wendy Forbes, a spokesperson for Centura Health, told local media at the time that the increased price for the surgeries was “fair and reasonable and grounded” because Ms French had what she described as “a very complicated surgery with major complications due to her personal, preexisting health conditions.”

Ms French recounted to the Denver Post in 2018 about how “going through the whole thing was very stressful and tiring.”

“I always felt that the hospital was using me as a guinea pig to fight this company that was helping people from getting ripped off,” she said.

In 2018, a jury ruled that while Ms French did breach her contract, she only owed the hospital an additional $767. When Centura Health brought the case to the Colorado Court of Appeals in 2020, the three-judge panel overturned the jury’s decision, saying that the term “all charges” in French’s contract with the hospital was “sufficiently definite.”

“Hospitals cannot always accurately predict what services a patient will ultimately require,” Court of Appeals Judge Terry Fox wrote in a May 2020 opinion.

The state Supreme Court, however, were skeptical of the appeals court during oral arguments in March.

“When I bring my car for service, they don’t know what’s wrong with it, either,” Gabriel said during oral arguments, according to Colorado Politics. “But they investigate it and they call me and say you need a new this or a new that and this is what it will cost.”

Michael T McConnell, an attorney for Centura Health, responded to the high court by saying, “Your mechanic isn’t a physician.”

“Obviously, you feel that is the way it ought to be,” Mr McConnell said in March. “It is not the way it is.”

Mr McConnell argued in March that the hospital should not be responsible for understanding “the patient’s insurance better than the patient does.”

But the state Supreme Court was unconvinced, ruling Monday that French is not liable for the full bill and will only be required to pay the hospital the additional $767 from the jury’s 2018 verdict.

“If a charge for hospital services is not included in a hospital-patient contract, then we believe that a jury is fully capable of determining the reasonable value of the services provided,” Gabriel wrote.

When Mr Lavender called Ms French to tell her about the Colorado Supreme Court’s decision, the attorney told The Post, his client was relieved and “very happy” that the years-long legal struggle over the alleged six-figure price of back surgery was finally over.

“It was a long road,” he said, “but she is pleased with the outcome.”

Timothy Bella works for the Washington Post.