Health Commission approves DPH patient rate ordinance extending charge master through FY26–27

The San Francisco Health Commission voted to approve the Department of Public Health’s patient rate ordinance, extending DPH’s charge master and related rate authorizations through fiscal years 2025–26 and 2026–27.

CFO Drew Morrell explained that the ordinance sets the ceiling rates DPH uses when negotiating reimbursements with payers and that many individual patients never pay the listed charges. Reimbursement director Matthew Surr outlined the methodology for different service lines and said the ordinance applies CPI-based increases for most non-emergency physical health services (2.76% in FY25–26 and 2.82% in FY26–27) while adopting Medi-Cal and Medicare fee schedules or markups where appropriate. “These patient rates are effectively our charge master,” Morrell said during the presentation.

Surr walked the commission through a series of illustrative examples intended to show how billed charges, insurer allowable amounts, and DPH policies interact. He described a fictitious trauma case with $189,507 in billed charges and explained mechanisms that reduce patient liability, including charity care and a sliding‑scale discount that reaches as high as 500% of the federal poverty level. He said that, under department policy, patients who qualify for sliding-scale assistance could see liability reduced to levels such as $550 for that illustrative stay; for patients who do not qualify, an inpatient patient-cap policy limits responsibility to $4,800 in some scenarios.

Commissioner Chao and others pressed staff on the industry practices that produce high charge-master figures and on whether balance billing remains a threat to patients. Surr and Director Grant Colfax Tsai told the commission that DPH no longer balance bills individuals and that the department generally replicates a patient’s in-network cost-sharing to limit out-of-pocket exposure. “DPH has eliminated all balance billing for individuals,” Director Tsai said.

The ordinance also notes differential treatment of professional fees billed by UCSF under the affiliation agreement; Morrell said those professional services fall under separate billing processes and that the commission would receive additional information on how charity‑care protections apply to affiliated professional billers.

After discussion, a motion to approve the ordinance was moved, seconded and adopted by voice vote. The commission additionally asked staff to return with a market-study refresh in the coming year and with more detail on the application of charity-care protections to affiliated professional fees.

The ordinance takes effect according to the dates stated in the final adopted ordinance and the department will continue to publish and explain patient-protection policies to minimize unexpected patient liability.