San Francisco General pauses surprise billing; DPH proposes 90‑day review and caps on out‑of‑pocket costs

Supervisor Aaron Peskin convened a hearing on Thursday to examine unit costs and surprise balance bills at Zuckerberg San Francisco General after investigative reporting and numerous patient complaints. Peskin cited cases in which privately insured patients were left with bills in the tens of thousands of dollars and said the city must “take the patient out of the middle.”

Greg Wagner, chief financial officer for the Department of Public Health, told the Government Audit & Oversight Committee the department has placed a temporary halt on its practice of balance billing and frozen related statements and collections while it develops more detailed policy proposals on a roughly 90‑day schedule. "We have frozen sending out any new bills that would fall under this balance billing category," Wagner said, adding that the department will also freeze additional statements on previously billed cases and notify affected individuals that the accounts are under review.

Wagner described the hospital’s payer mix and the scale of potentially affected accounts: about 94 percent of SFGH’s patients are Medi‑Cal, Medicare or uninsured, while roughly 6 percent are commercially insured; the department estimates roughly 1,700 commercially insured PPO patients may be subject to balance billing in a single year and said there are between about 5,000 and 6,000 accounts in collections that require individual review. Wagner told the committee the subset of accounts tied specifically to balance‑billing practices likely represents a smaller number and that staff must review accounts individually to determine insurance status and next steps.

DPH proposed several near‑term policy steps to protect patients, including restructuring financial assistance into an income‑based scale, adding an out‑of‑pocket cap tied to ability to pay, improving patient communications, proactively screening eligibility for assistance earlier in care, and pursuing targeted agreements with insurers. Wagner said the cap approach would "protect the patient" while allowing the hospital to continue seeking fair payment from insurers.

Patients, nurses and union representatives recounted cases where insured patients received large, unexpected bills after trauma or emergency care. Testimony included a patient who said she faced a roughly $13,000 bill after a viral syndrome and another who reported a final bill above $28,000 after a climbing accident. Nurses described clinical triage practices that trigger trauma activation and noted that billing classifications and intake procedures can be confusing for patients.

Supervisors pressed DPH for data on the universe of affected accounts, legal constraints, and the budgetary effect of reducing collections. Wagner estimated the accounts tied to the balance‑billing category correspond to about $3 million in annual revenue but warned that the hospital’s broader private‑insurance collections total about $135 million a year; losing material revenue would increase the hospital’s general fund subsidy. Committee members asked DPH to develop an administratively and legally feasible plan that minimizes harm to patients while preserving the hospital’s fiscal stewardship.

Supervisor Peskin moved to continue the hearing to the call of the chair pending promulgation of DPH’s proposed rules; the committee continued the item after DPH agreed to return with specific recommendations and outreach plans for affected patients. The department said it will notify individuals in collections that their accounts are under review and will provide a detailed policy package to the board within the stated timeframe.