An attorney for theformer Centura Health patient said testimony in the case revealedjust how murky hospital billing can be and how some patients aretargeted for whopping bills to make up for those who paysubstantially less for the same services. (Photo:Shutterstock)

A Colorado jury declared ahospital's billing unreasonable, turning aside its lawsuitdemanding almost $230,000 from a patient whose insurer alreadycovered the cost of her surgery.

The patient had already paid herdeductible and her insurer had paid the hospital about $75,000,which an audit deemed the “reasonable value of the goods andservices” she had been provided, her lawyer said.

Lead attorney Ted Lavender ofFisherBroyles' Atlanta branch, who represented the former patientwith office partner Kris Alderman and Denver partner Frank Porada,said testimony in the case revealed just how murky hospital billingcan be and how some patients are targeted for whopping bills to make up for thosewho pay substantially less for the same services.

“The hospital experts explained how the rates getset, and it ultimately devolved into this idea that paying patientshave to pay more to make up for nonpaying patients, the uninsured,those on Medicare and Medicaid, who don't pay full price,” Lavendersaid.

In his client's case, recordsshowed that surgical spinal implants cost the hospital about$31,000.

“They turned around andcharged $197,640 for thoseitems on the hospital bill,” said Lavender. “That is a 624 percentmarkup.”

The hospital is represented byTraci Van Pelt, Michael McConnell and David Belsheim of Denver'sMcConnell Fleischner Houghtaling.

Van Pelt said they will file posttrial motions andappeal the verdict.

The case involved back surgeryperformed on Lisa French in 2014 at St. Anthony North HealthCampus, north of Denver. Hospital filings said French's surgery wasto relieve back pain and was “considered elective.”

French's employer had aself-funded ERISA insurance plan, and she was told prior to surgerythat she would owe $1,336, of which she immediately paid$1,000.

French's contract includedphrasing that she “understand[s] that I am financially responsibleto to the hospital or my physicians for charges not covered or paidpursuant to this authorization.”

St. Anthony's billed herinsurance plan $303,888 after the surgery and fortwo presurgical consultations based on its “chargemaster” billingschedule, an industrywide practice whereby providers list all theprices they charge.

As Lavender explained, French'semployer's insurance plan contracts with a health care consultingfirm, ELAP Services, which audits claim costs andnegotiates with providers for self-funded insurers. On its website,ELAP says it “assists in plan design and jointly establishes limitsfor payment of medical claims that correlate to the providers'actual cost of services.”  

ELAP audited the fees St.Anthony's charged French and determined that her actual chargescame out to about $70,000, Lavender said. Between her co-pays andthe insurance plan, St. Anthony's was paid $74,597.

St. Anthony's parent company,Centura Health Corp., sued French in state District Court inAdams County, Colorado, seeking an additional $229,112 in2017.

ELAP provides legalrepresentation to clients facing suit pursuant to its services, andLavender, Alderman and FisherBroyles Denverpartner Frank Porada were assigned French's defense. 

According to defense filings,Fishers contract with St. Anthony's contained no stated price andwas thus ambiguous.

The hospital was already paid thereasonable value for the services, according to a defense account. The chargemaster rates are“grossly excessive and defendant had no choice but to sign theHospital Service Agreement, making them unconscionable” and thusunenforceable, the defense said.

During a six-day trial inBrighton, Colorado, before Judge Jaclyn Brown of Colorado's 17thJudicial District, Lavender said the entire dispute was over theprices and methodologies medical providers use.

“We had one expert, and they hadthree,” said Lavender. “They spent $100,000 on experts.”

“The reality is that there'snobody to say how much they're charging is reasonable,” Lavendersaid.

The jury made that determinationfor French on June 11, answering “no” when asked whether her billswere reasonable. The panel agreed she had a contract with St.Anthony's to pay “all charges of the hospital,” but that thosecharges were “the reasonable value of the goods and servicesprovided,” not those set by the hospital's chargemaster.

The jury awarded the hospital$766.74.

The hospital's attorneys did agood job explaining how hospitals have to shoulder the burden forunderpayments and nonpayment by other patients, Lavendersaid. 

“They know they're not going tocollect from everybody,” he added. “But in the end, it just revealshow antiquated and nontransparent the system is, because nobodyunderstands the bill.”

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