“Can Medical Justice solve my problem?” Click here to review recent consultations…
all. Here’s a sample of typical recent consultation discussions…- Former employee stole patient list. Now a competitor…
- Patient suing doctor in small claims court…
- Just received board complaint…
- Allegations of sexual harassment by employee…
- Patient filed police complaint doctor inappropriately touched her…
- DEA showed up to my office…
- Patient “extorting” me. “Pay me or I’ll slam you online.”
- My carrier wants me to settle. My case is fully defensible…
- My patient is demanding an unwarranted refund…
- How do I safely terminate doctor-patient relationship?
- How to avoid reporting to Data Bank…
- I want my day in court. But don’t want to risk my nest egg…
- Hospital wants to fire me…
- Sham peer review inappropriately limiting privileges…
- Can I safely use stem cells in my practice?
- Patient’s results are not what was expected…
- Just received request for medical records from an attorney…
- Just received notice of intent to sue…
- Just received summons for meritless case…
- Safely responding to negative online reviews…
Lisa French lives in Thornton, Colorado. In 2014, she underwent surgery to address her back pain. She received treatment at St. Anthony North Health Campus, a non-profit hospital also located in Colorado. The hospital estimated French’s bill would be around $1,300 out of pocket. French’s insurance would cover any additional expenses – or so she was told.
The hospital billed her over $300,000. Her insurance covered, at most, $74,000, leaving French to cough up the remaining $226,000. $74,000 is a sizeable chunk of change, but in this context, about as helpful as spitting into a bonfire.
French disputed the charges, and the event turned into a civil case. Initially, the Colorado Court of Appeals ruled French was on the hook for the out-of-pocket expenses. That ruling has since been overturned – but we’ll get to that in a bit.
$300,000 isn’t just in a different zip code, it’s on an alien planet. What’s with the obscene discrepancy? The answer: A clerical error. Or bad eyes. Perhaps both.
The hospital employee who supplied the initial estimate allegedly “misread” French’s insurance card and believed her insurance provider was “in-network” with the hospital. It wasn’t until after French signed the contracts and underwent surgery that the hospital realized her insurance provider was, in fact, not in-network.
Thus, the bill. But why $300,000?
The hospital pulled that number from its own (formerly) secret list of sticker prices for various procedures, commonly referred to as a “chargemaster.”
Those of us working in hospitals (and healthcare in general) are likely familiar with chargemasters. Most laypeople are not.
Attorneys hired by the hospital insisted that French’s refusal to pay what she “owed” violated the contracts she signed before receiving care. Her ignorance of the secret chargemaster was of no importance – apparently.
But the state’s Supreme Court disagreed, finding “that ‘long-settled principles of contract law’ show that French did not agree to pay the chargemaster prices when she signed the contracts, which never mention or reference the chargemaster.” Justice Richard Gabriel wrote the following:
“(French) assuredly could not assent to terms about which she had no knowledge, and which were never disclosed to her.”
Gabriel and his colleagues zeroed in on the opaque nature of the chargemasters, adding that chargemaster prices are often not a part of the actual costs of care. Very few patients pay the chargemaster sticker prices because insurance companies run interference and negotiate lower rates – assuming, of course, the insurance provider is in-network. Because of the hospital’s clerical error, French received assurance her insurance provider was in-network when it wasn’t.
“…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,” Gabriel wrote.
Colorado passed a law in 2017 that required hospitals to disclose some self-pay prices. And in 2019, it was ruled hospitals must make their chargemaster prices public.
Unfortunately for French, she underwent surgery in 2014, so she missed out. If French was clairvoyant, one wonders if she would have delayed the back surgeries altogether and traded her healthcare odyssey for a few more years of discomfort.
The justices ultimately ruled the contracts she signed did not oblige her to pay the hospital’s chargemaster prices for the following reasons:
- The hospital did not disclose those prices when she signed the contracts.
- She did not know the chargemaster even existed when she signed the contracts.
A positive outcome for French, considering the Colorado Court of Appeals initially ruled in favor of the hospital.
But French isn’t entirely off the hook. While she does not have to pay the chargemaster’s prices, she was found guilty of breaching her contract with the hospital. She must pay them something. How much she must pay was left to the jury to decide.
And what was the magic number? $760 – a close neighbor to the initial $1,300 estimate, and less than 1% of the $226,000 out-of-pocket behemoth.
The ultimate take-home point: Always carry an emergency $226,000 on you, just in case you wake up saddled with a life-altering amount of medical debt. Stash it in your shoes for safekeeping. Fortunately, the patient was dogged in fighting the good fight. And the Colorado Supreme Court rewarded her for her tenacity.
What do you think? Let us know your thoughts below.
Medical Justice provides consultations to doctors facing medico-legal obstacles. We have solutions for doctor-patient conflicts, unwarranted demands for refunds, online defamation (patient review mischief), meritless litigation, and a gazillion other issues. We also provide counsel specific to COVID-19. If you are navigating a medico-legal obstacle, visit our booking page to schedule a consultation – or use the tool shared below.“Can Medical Justice solve my problem?” Click here to review recent consultations…
all. Here’s a sample of typical recent consultation discussions…- Former employee stole patient list. Now a competitor…
- Patient suing doctor in small claims court…
- Just received board complaint…
- Allegations of sexual harassment by employee…
- Patient filed police complaint doctor inappropriately touched her…
- DEA showed up to my office…
- Patient “extorting” me. “Pay me or I’ll slam you online.”
- My carrier wants me to settle. My case is fully defensible…
- My patient is demanding an unwarranted refund…
- How do I safely terminate doctor-patient relationship?
- How to avoid reporting to Data Bank…
- I want my day in court. But don’t want to risk my nest egg…
- Hospital wants to fire me…
- Sham peer review inappropriately limiting privileges…
- Can I safely use stem cells in my practice?
- Patient’s results are not what was expected…
- Just received request for medical records from an attorney…
- Just received notice of intent to sue…
- Just received summons for meritless case…
- Safely responding to negative online reviews…
No wonder lay people hate medicine. I’m embarrassed and saddened by what medicine has become and how people and institutions look for reimbursement. Sadly this happens in my town by physicians claiming emergencies when they are not to ravage insurance companies and patients. As the old adage goes – pigs get fat, hogs get slaughtered. (Yes, reimbursement is down and everyone taking insurance is being paid less and has to work more. Which is unfair also, but this is about price gouging. Different topic. )
The first issue is that she was estimated at a certain out of pocket. When this first came up the hospital should have done the right thing and treated her as an in network. Then they should have settled this. That would have been if the hospital had done the right thing. Then their idiot lawyers turned this into a contract case and treated this as though the hospital was the injured party. So the hospital loses in court, loses in the court of public opinion as a religious affiliated not for profit hospital (not very charitable), and loses monetarily on both what they will get from the patient and what they lose on their attorney fees. No one ever figures out what attorneys will cost (because no one asks about their charge master). I hope the hospital had to pay her attorney’s fees. The hospital gave an estimate and then did not live up to it. They did not stand by the word of their employee. They are wrong. Morally and now legally wrong. Does anyone ever have a conscience anymore about doing what is morally right.
The hospital got $74000 from her insurer which was far more than the procedure cost. That makes them look like the greedy bastards they are.
Finally this person was unlikely to have the $225,000 balance and they would never have gotten that from her. She would likely have gone bankrupt just to get out from under this mess.
No one on their legal team ever seems to have taken any courses on morality or ethics. They clearly cannot distinguish between right and wrong. Hospitals often won’t stand behind their employees which is both cowardice and morally bankrupt.