From $1,300 to $300,000

In 2014, Lisa French was experiencing lingering pain from a car accident. Her physician recommended her for spinal fusion to avoid becoming paralyzed due to a fall or another accident. She sought treatment from St. Anthony North Health Campus, operated by Centura Health. She needed two surgeries and was told with her insurance, she could expect to pay about $1,300. French and her family saved to afford her care, paying $1,000 immediately after surgery even though it cleared out her family’s emergency fund. Three years later, she was served papers from a lawsuit — the hospital now claimed her surgeries cost $300,000, and she owed them the rest of their money.

The hospital system told French that she was in-network when she had arrived for her surgeries, but they had misread her insurance card. Her insurance had already paid $74,000 and Centura Health expected French to cover the remaining $226,000. As a mother of five struggling with Type 2 diabetes, recovering for spinal surgery, and the primary breadwinner of her home, French would have spent decades trying to pay off the remainder. Her insurance plan connected her with a firm that audits hospital bills and together they took her case all the way up through the Colorado judicial system to the state Supreme Court. 

Centura Health argued that French owed “all charges to the hospital,” including those prices which were only listed in an internal database. The Court unanimously ruled this to be ridiculous, as insurance companies often negotiate their prices down to in-net, thus proving these costs are adjustable.

[Internal charge rates] 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

Evidence submitted during the trial also showed the incredible markup between the cost of French’s services and the charges she was issued. Thirteen spinal-implant materials were used for her surgery, costing the hospital around $31,670. The hospital charged French $197,640 for these same things, a markup of over 500%.

“What bothered me is they say they are a nonprofit hospital, but how much profit did they need to make?”

-Lisa French

The first case of its kind, but not unique

French’s case is the first of its kind to make its way to a state Supreme Court, but it’s not unique in the slightest. Research shows that 19% of US adults have received a surprise bill due to their provider being out-of network. At the beginning of this year, the No Surprises Act went into effect in an effort to curb surprise billing. While it has prevented an estimated 2 million surprise bills in the early months of 2022, the American Medical Association (AMA) and American Hospital Association (AHA) have filed a lawsuit over included provisions.

French’s specific surgery is also an interesting point in this case. She underwent spinal fusion, one of the eight procedures that the Lown Institute evaluates for hospital overuse. While spinal fusion for traumatic injuries like car accidents are generally indicated, the Lown Institute recently found that thousands of people undergo spinal fusion every year even if they did not really need the surgery. Not only does going under the knife increase the risk of medical complications, it also opens patients up to financial complications like French went through. Even during the 2020 pandemic, hospitals continued performing these low-value, high-expense procedures. 

Polls show that the majorities of both major political parties support government action to protect against surprise bills. We will have to wait and see if any meaningful action is ultimately taken to prevent what happened to Lisa French from happening to more Americans.

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