Health Commission approves patient‑rate ordinance extending FY25‑26 rates; commission asked for future market study

The Health Commission on May 20 voted to approve the Department of Public Health's patient‑rate ordinance extending rate authorizations through fiscal year 2026–27 for inpatient, emergency and trauma related services.

Drew Morrell, DPH chief financial officer, and Matt (reimbursement director, DPH) presented the ordinance and explained it functions as the department's charge master—the ceiling for facility charges that payers and billing systems use to determine final reimbursement. Matt described the proposed schedule: a 2.76 percent increase for most physical‑health non‑emergent services in fiscal year 2025–26 and a 2.82 percent increase for fiscal year 2026–27, aligned to the controller's office guidance on CPI for fees and fines. For community behavioral‑health services the ordinance aligns rates to Medi‑Cal fee schedules for 2025–26 with the same 2.82 percent adjustment in 2026–27.

Morrell and Matt walked the commission through examples illustrating how facility charges, payer allowable amounts and DPH policies interact, including sliding‑scale charity care and discount payment programs. Matt emphasized that the ordinance covers facility charges and that professional bills rendered by UCSF clinical groups are billed separately under the hospital's affiliation agreement.

The presenters described multiple patient‑protections embedded in DPH policy: (1) DPH will not balance‑bill individuals for facility charges in the circumstances described; (2) sliding‑scale charity care and discount programs can materially reduce or eliminate patient liability (the department noted its sliding‑scale policies extend up to 500 percent of the federal poverty level); and (3) a patient cap policy limits inpatient patient responsibility in the example presented to $4,800 if other protections do not apply.

Commissioners asked clarifying questions about what constitutes private insurance and whether patients would face unexpected bills; presenters responded that core patient‑protections and caps apply and that the ordinance sets the charge master used in payer negotiations. After discussion, a commissioner moved to approve the ordinance, a second was recorded and the commission voted "Aye"; the motion passed.

Commissioners asked finance staff to return with more detail on how physician professional charges under the UCSF affiliation agreement interact with DPH sliding‑scale and charity policies. The commission approved the ordinance and requested a market‑rate review and updated methodology to be completed in the coming year.