S.F. General Rethinks High Bills For Insured ER Patients

Up to six thousand people face bills, sometimes costing tens of thousands of dollars, for emergency services despite having insurance.

Zuckerberg San Francisco General Hospital may cap balance billing based on income. (Kevin N. Hume/S.F. Examiner)

In the past month, horror stories have emerged of Zuckerberg San Francisco General Hospital emergency patients being stuck with thousands of dollars — even close to $30,000 — in medical bills despite being insured.

Just a handful of these accounts were publicized through stories by Vox and the Chronicle but they are far from the only ones. At a Government Audit & Oversight Committee hearing on Thursday, San Francisco Department of Public Health officials shared that there could be five to six thousand people stuck with bills not paid by their insurance, known as balance billing. 

“It turns out this story is not rare and is much more pervasive than any of us knew,” said Supervisor Aaron Peskin, who called for the hearing. “Balance billing is part of a larger issue of what is, quite frankly, a screwed up patchwork of national health care coverage.”

The practice is on a 90-day hold while the hospital comes up with a detailed plan. Greg Wagner, DPH chief financial officer, indicated it would likely include a balance billing cap based on income, at least in the short term.

S.F. General prioritizes Medicare, Medical, and uninsured patients who make up 94 percent of its patients and is out of network for private insurance. But it’s often where people are sent for its renowned emergency care, regardless of insurance status.

California happens to have some of the strongest protections against balance billing for out-of-network emergency patients, which took effect in July 2017, but doesn’t apply to certain health plans. Less than four percent of S.F. General patients seen during the 2017 fiscal year were subject to balance billing but that still impacted up to 1,700 people. Unsettled cases are punted to the Bureau of Delinquent Revenue, which can harm credit scores.

Some people included in the news stories came to publicly comment about either being unconscious when taken to the hospital or resisting beforehand because they knew it was out of network and still ended up with a more than $20,000 bill. Board President Norman Yee, who was hit by a car in 2006, teared up while speaking about the stress of a bill that cost more than $100,000 while trying to recover.

“It was a nightmare, personally,” said Yee, who had to hire a lawyer to settle the bill. “I thought we were going to go bankrupt as a family. What I had to go through shouldn’t happen to people.”

Wagner conceded that S.F. General should better communicate insurance payment issues with the patient before sticking them with a stress-inducing bill that may take months or even years to sort out. Those five-to-six thousand people with active cases of balance billing will be notified about the timeout. 

The high and untransparent cost of service was also a point of concern and Supervisor Gordon Mar inquired about abolishing balance billing altogether. DPH will likely move to keep patients out of bill disputes between the hospital and private insurance companies but Wagner said they still have a financial responsibility to the city to collect payments.

S.F. General receives about $200 million from the city and recoups $135 million from private insurers annually for services rendered. Wagner estimates that patients who face balance billing contribute about $3 million in revenue and that, with the right policy adjustment, the financial impact could be minimal.

Still, supervisors questioned why it took public attention to reconsider the practice.

“There have been people fighting these bills for years and somehow the pain and suffering that was happening out in the universe didn’t get a response from the Department of Public Health until it became a political problem,” Mandelman said, referring to the hearing. “We’re supposed to be providing oversight, we’re not supposed to be running this department.”

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