Surprise medical bills are a burden on hospital patients who do not anticipate paying out of pocket for elective procedures and other forms of pre-planned care. Complaints about the unforeseen costs of hospital care have energized the push for reform in the American health care system, particularly in rural areas where options are limited.
Advocates often focus on legislative solutions to the problem, but efforts to simplify the health care billing and payment system in the Colorado Legislature were delayed by the COVID-19 pandemic.
Franklin Walter, a Centura Health patient who received a surprise bill for $1,216.73 two months after his routine knee replacement without an explanation or an itemized statement, decided to challenge the corporation in court with a class-action lawsuit for what he claims are predatory billing practices.
Walter also argues the “Consent for Medical Treatment” contract he signed before the procedure requires Centura Health, which owns 17 hospitals, including Mercy Regional Medical Center, and more than 100 physician practices throughout Colorado and Kansas, to provide patients with an estimate of what they will have to pay out of pocket.
The contract between Mercy and nonemergency patients says: “I acknowledge that estimated responsibility is due at the time of service and that any remaining charges are due and payable upon receipt of the bill.”
The case seeks to include all patients from Feb. 7, 2017, onward who did not receive an estimate of the amount owed before or at the time nonemergency care was provided, and charged after the care was provided.
Centura’s responseLast week, Centura Health filed a motion to “stay,” or delay, the discovery process in the case pending the court’s review of Centura’s motion to dismiss the case entirely. The health corporation argues that the U.S. District Court of Colorado does not have jurisdiction over the case, as Walter is a resident of Flora Vista, New Mexico.
The motions to dismiss the case are “very standard,” said Tim Blood, one of the attorneys on the class-action case and a managing partner for Blood, Hurst & O’Reardon LLP in San Diego.
Blood said Walter can bring his claim in either the Colorado or New Mexico court systems because Colorado is the state in which the harm occurred.
“A court is going to make a decision somewhere, so why not make the decision absent a court order” to be more transparent with billing practices, Blood said.
Centura’s efforts to delay the discovery process, a pretrial procedure in a lawsuit in which each party obtains evidence from the other party though requests for documents and other legal tools, are predicated on the argument that it would be a waste of time for the court and the litigants to proceed with the case if the court does not have jurisdiction over it.
Medicare’s roleCentura also claims “no such contractual or statutory obligation exists” for the corporation to provide an estimate of the cost of elective procedures, according to the motion to stay.
Jennifer Wills, vice president of communications and chief of staff for Centura Health, said in an email statement to The Durango Herald that Walter was a patient covered by Medicare, and Medicare does not cover medications that an outside physician prescribes.
But lawyers for the class-action lawsuit see the lack of transparency as preying on a particularly vulnerable group of people – retirees who rely on Medicare. During Walter’s stay at Mercy, he took 13 500-milligram Acetaminophen pills. The hospital later charged him $39 for the pills, but a 200-pill container costs about $5 at most pharmacies.
Wills said it is impossible for Centura to provide a patient with an estimate of his or her personal out-of-pocket costs before a procedure because Centura “does not know what medications will be ordered by the patient’s physician until after the procedure.”
Push for transparencyCentura has since reached out to Walter and offered him a discount, bringing his total out-of-pocket cost to $486.69.
Blood, one of Walter’s attorneys, said he is “happy they teed up the issue,” and that Centura addressed it in the response.
“We think the contract is pretty clear,” Blood said.
Blood said he has specialized in class-action lawsuits for almost 30 years, and this case has generated a higher number of calls from people interested in joining than Blood normally receives for a class-action case.
Walter is asking for $5 million, an amount based on the number of people lawyers estimate were affected by Centura’s billing practices. Blood said Walter hopes his lawsuit will bring about more transparency for patients.
But Centura’s response says Walter “purportedly brings this action” to recover “a mere $1,216.73 he was ‘charged,’” and is exposing himself to further risk of financial accountability “far in excess of his claimed damages.”
If the court dismisses the case, Centura can receive compensation for its attorney fees from the plaintiff.
“Centura believes it complied with the law and the terms of the Hospital Services Agreement Walter signed before his surgery,” Wills said.
But Blood argues that Centura’s contract strongly suggests it will provide the cost of the procedure beforehand.
“It’s always frustrating when a defendant doesn’t step up and do the right thing,” Blood said.