French v. Centura Health Corp.

• Citation: 2022 CO 20
• Decision Date: 16 May 2022
• Docket Number: 20SC565
• Parties: Lisa Melody French, Petitioner v. Centura Health Corporation and Catholic Health Initiatives Colorado, d/b/a St. Anthony North Health Campus, Respondents
• Court: Supreme Court of Colorado

2022 CO 20

Lisa Melody French, Petitioner v. Centura Health Corporation and Catholic Health Initiatives Colorado, d/b/a St. Anthony North Health Campus, Respondents

No. 20SC565

Supreme Court of Colorado, En Banc

May 16, 2022

Certiorari to the Colorado Court of Appeals Court of Appeals Case No. 19CA23

Attorneys for Petitioner: Ireland Stapleton Pryor &amp Pascoe, PC K.C. Groves Benjamin J. Larson James R. Silvestro

FisherBroyles, LLP Thomas E. Lavender, III Kristopher R. Alderman

Attorneys for Respondents: McConnell Van Pelt, LLC Traci L. Van Pelt Michael T. McConnell Denver, Colorado

Attorneys for Amici Curiae AdventHealth and CommonSpirit Health: Hall & Evans, LLC Jared R. Ellis

Attorneys for Amicus Curiae American Association of Healthcare Administrative Management: Messner Reeves LLP Kendra N. Beckwith

Attorneys for Amicus Curiae ClaimDOC, LLC: Lewis Brisbois Bisgaard & Smith LLP Arthur Biller

Attorneys for Amici Curiae Colorado Business Group on Health and Self-Insurance Institute of America, Inc.: Fairfield & Woods, P.C. John M. Tanner Paul R. Janda

Attorneys for Amici Curiae Colorado Consumer Health Initiative, Colorado Center on Law and Policy, and Colorado Legal Services: Connelly Law, LLC Sean Connelly

CHIEF JUSTICE BOATRIGHT, JUSTICE MÁRQUEZ, JUSTICE HOOD JUSTICE HART, JUSTICE SAMOUR, and JUSTICE BERKENKOTTER joined.

OPINION

GABRIEL JUSTICE

¶1 Petitioner Lisa Melody French went to respondents Centura Health Corporation and Catholic Health Initiatives Colorado d/b/a St. Anthony North Health Campus (collectively, "Centura") for spinal fusion surgery. Upon reviewing French's insurance information prior to her surgery, Centura advised her that she would personally be responsible for $1, 336.90 of the amounts to be billed. After the surgery, however, Centura determined that it had misread French's insurance card and that she was, in fact, an out-of-network patient. Centura then billed French $229, 112.13 and ultimately sued her to collect.

¶2 We granted certiorari to decide (1) whether, on the facts presented here, Centura's chargemaster, a database used by Centura that lists rates for specific medical services and supplies, was incorporated by reference into hospital services agreements ("HSAs") that French had signed; and (2) if so, whether the price term in the HSAs was sufficiently unambiguous to render the HSAs enforceable.^[1] ¶3 We now conclude that because French neither had knowledge of nor assented to the chargemaster, which was not referenced in the HSA or disclosed to her, the chargemaster was not incorporated by reference into the HSA. Accordingly, the HSA left its price term open, and therefore, the jury appropriately determined that term.

¶4 For these reasons, we reverse the judgment of the division below, and we need not decide whether the price that French was to pay was unambiguous, even if the HSA incorporated the chargemaster.

I. Facts and Procedural History

¶5 After an automobile accident, French elected to undergo spinal fusion surgery, which involved surgical procedures on two consecutive days. At the time, she had health care benefits through her employer's self-funded plan administered by Professional Benefit Administrators, Inc. and ELAP Services, LLC.

¶6 French's doctor advised her that the St. Anthony North Health Campus was the hospital at which she would have the procedures performed, and French provided Centura with her insurance information. Based on its understanding of the information that French had provided, Centura estimated that her surgeries would cost $57, 601.77 and that after French's insurance payment, she would personally be responsible for $1, 336.90 of that amount.

¶7 In addition, on three separate occasions prior to the surgeries, French signed two-page HSAs, stating, in pertinent part, "I acknowledge full financial responsibility for, and agree to pay, all charges of the Hospital and of physicians rendering services not otherwise paid by my health insurance or other payor." French also signed three two-page Patient Bill of Rights forms, which stated, in pertinent part, that she had the right to "[r]equest and receive, prior to the initiation of non-emergent care or treatment, the charges (or estimate of charges) for routine, usual, and customary services and any co-payment, deductible, or non-covered charges, as well as the facility's general billing procedures including receipt and explanation of an itemized bill." In signing these Patient Bill of Rights forms, French acknowledged that she had the responsibility to "[u]nderstand and honor financial obligations related to [her] care, including understanding [her] own insurance coverage." Neither the HSAs nor the Patient Bill of Rights forms mention the chargemaster or include an express price term.

¶8 French was subsequently admitted to the St. Anthony North Health Campus for the surgeries. She tolerated the procedures well, and the discharge note in her medical record indicated that she had had no complications and that her hospital course was "uneventful." She did, however, spend one additional day in the hospital than was initially planned.

¶9 Thereafter, and notwithstanding the fact that Centura had told French that her surgeries would cost $57, 601.77 and that she would personally be responsible for $1, 336.90 of that amount, Centura billed French $229, 112.13, reflecting its full chargemaster rates. Centura did so because it determined that it had misread French's insurance card and that she was, in fact, an out-of-network patient. Centura calculated the amount due after subtracting from the total charges the payment from French's insurer of $73, 597.35 and French's payment of $1, 000.00 (thus, the total amount that Centura charged was over $300, 000.00, notwithstanding its pre-procedure estimate that the surgeries would cost $57, 601.77).

¶10 When Centura's attempts to obtain payment from French proved unsuccessful, it sued French for breach of contract, alleging that under the HSAs that she had signed, she had agreed to pay Centura's chargemaster rates and therefore owed Centura the full balance of $229, 112.13.

¶11 The case proceeded, and during discovery, French requested that Centura produce the chargemaster that applied on the dates of service for the medical care provided. Centura, however, objected to producing its chargemaster, stating that the chargemaster was "voluminous, proprietary and a trade secret."

¶12 In addition, prior to trial, Centura filed a Motion for Declaratory Judgment or for Determination of Questions of Law, seeking a declaration that (1) the HSAs that French had signed incorporated the chargemaster rates; (2) French's promise to pay "all charges of the Hospital" was not an indefinite or open price term and unambiguously referred to Centura's chargemaster; and (3) the HSAs and Patient Bill of Rights forms that French had signed required her to pay the outstanding charges. The trial court, however, denied this motion, concluding:

The court cannot find that the hospital-patient forms incorporate or refer to the chargemaster as a matter of law. . . . According to [Centura], the plain meaning of "all charges" unambiguously refers to rates generated from the chargemaster. The court disagrees and finds that the term is ambiguous. The document signed by [French] is devoid of any reference to the Hospital's chargemaster and does not define the meaning of "all charges." At the very least, the hospital-patient forms are reasonably susceptible to more than one meaning. Therefore, the definition of "all charges" is a question of fact appropriately decided by the jury at trial.

¶13 The matter ultimately went to trial, and at trial, Centura witnesses conceded that they had provided French, at least over the phone, with an estimate indicating that her surgeries would cost $57, 601.77 and that French would owe $1, 336.90. They testified, however, that Centura staff had misread French's insurance card and thus calculated the estimate based on their incorrect determination that French was in network for her surgeries, when she was not.

¶14 Centura witnesses further testified about the chargemaster, describing it as a database of about 50, 000 codes that is integrated into Centura's electronic medical record system, with the codes representing the services and supplies that Centura provides and for which it charges patients. These witnesses explained that when a patient is discharged and all of the charges have been posted to the patient's account, a bill is generated out of the system using the chargemaster rates, and that bill is sent to the payor. The Centura witnesses further observed that patients cannot directly access the chargemaster and that before French's surgeries, Centura did not provide to her and she could not have looked at the chargemaster. And a Centura representative stated that the chargemaster rates were not incorporated into the estimate provided to French because Centura believed that French had benefits for hospital services and therefore generated the estimate by using the contractual reimbursement rates for the benefits that Centura mistakenly thought French had (insurance companies and governmental programs like Medicare and Medicaid negotiate discounted rates with hospitals like those owned by Centura, and Centura generated its estimate in accordance with the discounted rates that it believed applied, based on its erroneous reading of French's insurance card).

¶15 For her part, French testified that (1) someone from Centura had told her that she needed to pay $1, 000.00 before her surgeries; (2) she believed that her insurance would pay the remainder of her bill; and (3) no one told her that she might owe more than that. In...