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Commission approves FY17-18 and FY18-19 patient rate increases for San Francisco public health entities

San Francisco Health Commission · June 20, 2017
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Summary

The commission approved a two-year schedule of patient-rate increases (6% in FY17-18 and 7% in FY18-19 for primary care and Laguna Honda; larger increases for selected behavioral health services) to align cost-to-charge ratios with regional benchmarks and to reflect service-specific cost projections.

Deputy Financial Officer Anne Okubo and CFO Greg Wagner presented proposed patient rate changes for FY17-18 and FY18-19. The commission reviewed two-year rate proposals: primary care and Laguna Honda Hospital rates increase by 6% in FY17-18 and 7% in FY18-19; behavioral health rates vary by service modality (24-hour mental health services +6% and +7% respectively; adult residential +15% each year; day services +25%; outpatient +45%) and substance use service rates +15% for both years. New organized delivery service waiver rates were set for FY18-19.

Wagner explained the department has been systematically increasing rates over several years to move from a 43% cost-to-charge ratio (2009) toward market benchmarks; the department is now near a 28% ratio comparable with peers (UCSF, Saint Mary's, Saint Francis). Commissioners discussed how the rates compare with market inflation and noted that most patients pay Medi-Cal, Medicare, sliding-scale or Healthy San Francisco arrangements, so billed rates are rarely charged directly to individual uninsured patients.

Why it matters: The rates affect reimbursement levels for public hospitals and services and the department27s fiscal sustainability. The commission voted to accept and forward the rates to the Board for final action.