San Francisco Chronicle - (Sunday)
Chiu, Wiener seek to stop big hospital bills for urgent care
Kayvon Tehranian was lifting weights at his gym on Sept. 10 when he passed out and hit his head on the floor. Somebody asked him to name the president, and he said Barack Obama.
Wishful thinking, maybe. But it was reason enough for another gym member to drive him to the nearest emergency room, San Francisco General Hospital, just in case. He had two CT scans, spent two hours at the hospital, and talked to a doctor for five minutes. The diagnosis? A concussion. He was sent home.
The real headache came later in the mail. The hospital billed the 33-year-old tech worker’s insurance company, Anthem Blue Cross,
$12,393. The insurance company informed him it would pay $5,209.64 and that he owed S.F. General $7,183.36.
Tehranian said the medical care was excellent, but his attempts to lower his portion of the bill have been maddening.
“It’s cold, faceless and unfair,” he said of the hospital’s billing procedures, which hold privately insured patients responsible for any charges their insurance company won’t pay.
If two San Francisco state legislators have their way, S.F. General and other California hospitals will be prohibited from sticking patients like Tehranian with these kinds of shocking bills. Assemblyman David Chiu and state Sen. Scott Wiener plan to announce joint legislation Monday to ban balance billing on all patients who receive emergency care in California. The legislation would require that patients be charged only the same co-pay or deductible they’d be charged by an in-network hospital, even if they receive emergency care at an out-of-network facility. A similar state law already exists for nonemergency medical care.
At S.F. General, all private insurance is out of network, because the city’s sole trauma center doesn’t enter into contracts with any private insurance companies. Instead, it bills insurance companies the full rack rate for services, which are approved each year by the mayor and the Board of Supervisors. Because there’s no contract, the insurance company can pay whatever it wants, and patients get stuck with the rest.
Last year, that left 1,700 patients with bills that often reached into the tens of thousands of dollars for common illnesses and injuries such as appendicitis, migraines, bruises and broken bones. If patients can’t or won’t pay, the hospital often sends them to collections, which can put their credit rating in jeopardy.
“A hospital shouldn’t be allowed to send a patient an outrageous bill or send them to collections for anything other than their co-payment or deductible,” Chiu said. “The type of astronomical bills we’re seeing should not be a routine practice for thousands of patients every year who have the random luck of ending up on a gurney at San Francisco General.” Wiener said he knew some patients occasionally received large hospital bills, but he didn’t realize how widespread the practice was at S.F. General until recent media coverage.
“That’s how I learned this was a systemic issue, and I was horrified,” he said. “San Francisco General is probably the most extreme, but this is happening in other parts of the state as well.”
Wiener said he has talked to administrators at the hospital in recent weeks and that their top concern is caring for the poor, the homeless and the uninsured. Private insurance just doesn’t rate high on the priority list, Wiener said.
“Its philosophy is, ‘That’s not our focus. We don’t want to be a hospital that deals with a lot of private insurance. We want to deal with poor people who don’t have insurance,’ ” Wiener said. “I respect that philosophy, but part of that means not bankrupting people who have insurance. That’s just not fair.”
Chiu and Wiener’s legislation would also lower hospital bills overall for insurance companies when their patients are treated at out-of-network emergency rooms. Payment from insurance companies to hospitals would be limited to the greater of 150 percent of what Medicare would pay for the same services or the average rate the hospital would charge insurance companies with which it has contracts. Rachael Kagan, spokeswoman for the Department of Public Health, which manages S.F. General, said she couldn’t comment on the legislation because she hasn’t seen it.
“However, we absolutely agree that there is a role for policy changes to improve patients’ experience with billing,” she said. “That includes local, state and federal efforts. Meanwhile, we are working at the department and hospital level on making the improvements that we can.”
It’s clear that hospital billing practices are confusing, even to the people in charge of them. The Department of Public Health had previously said it was illegal under state law to balance-bill patients on HMO insurance plans, but legal to do it for those on PPO plans. The department said the hospital was balance billing PPO patients legally.
But that distinction is incorrect. According to Chiu, Wiener and the state’s Department of Managed Health Care, it’s illegal in California to balance-bill patients who have health insurance that’s “fully insured,” meaning an employer pays a set amount to the insurance carrier and the carrier bears the risk for employees falling ill or getting injured. Those are often HMO plans but can be PPO plans as well. They’re regulated by the state’s Department of Managed Health Care.
In 2014, the state took enforcement action against S.F. General for balance-billing PPO patients in a fully insured Blue Shield plan. The hospital agreed to cease billing those patients and stop efforts to collect on their outstanding bills. It also agreed to refund patients in that plan who’d been billed since 2009. The Department of Managed Health Care is asking patients who’ve received big bills from S.F. General to call its help center at 888-466-2219.
It is currently legal to balance-bill patients in self-insured plans, in which employers generally pay less for insurance for their employees but bear more of the risk if their employees become sick or injured. Those plans aren’t regulated by the state but are regulated by the federal government.
Under Chiu and Wiener’s legislation, it would be illegal to balance-bill anybody who receives emergency care in California, regardless of the specifics of their private insurance plan. The legislation, if passed, will head to the governor’s desk in September and, if he signs it, will take effect Jan. 1, 2020.
S.F. General and Mayor London Breed have halted balance billing for 90 days while they come up with a fairer system. That may include entering into contracts with some insurance companies, setting out-of-pocket maximums for individual patients, expanding the definition of who may qualify for charity care and doing a better job of explaining to patients what bills they’ll face.
Much of that could be moot if Chiu and Wiener’s legislation passes.
Tehranian, for one, supports any change that would end unfairly high bills like the one he received. He said it’s especially important because his family lives just a few blocks from S.F. General and needs to be able to count on it in case of an emergency.
“I can’t accept the anxiety we all feel about going there now,” he said. “I want to be able to sleep soundly knowing that S.F. General’s services are available to me and my family without exorbitant expense.”
For a public hospital with an annual budget of about $1 billion, that’s not too much to ask.