A woman is not liable for paying a nearly quarter-million-dollar medical bill after her surgery because she neither knew about nor agreed to the hospital’s secret pricing list, the Colorado Supreme Court ruled on Monday.
Under longstanding contract law, Lisa Melody French could not have consented to pay the price listed in the “chargemaster” because her hospital did not disclose it to her. Nothing prevented that disclosure from happening pre-surgery, wrote Justice Richard L. Gabriel in a decision criticizing predatory billing practices in the health care industry.
“Moreover, as courts and commentators have observed, 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,” he wrote in the May 16 opinion.
French underwent spinal surgery in 2014 at St. Anthony North Hospital in Westminster. The hospital, part of Centura Health Corporation, originally estimated French would owe roughly $1,337, but complications during surgery escalated her share of the cost to $229,112.
Although French had signed an agreement saying she would pay “all charges of the hospital,” an Adams County jury interpreted that phrase to mean the reasonable value of the services, not the price the hospital set unilaterally in its chargemaster. The jury decided French only owed $767.
A three-judge panel for the Court of Appeals subsequently overturned the jury’s verdict, prompting French to appeal to the Supreme Court.
Editor’s note: This breaking story will be updated.