Zuckerberg San Francisco General Hospital is updating its billing practices after making headlines over its policies.
A Vox report in January revealed the hospital is out of network with all private health plans, which can leave patients with massive bills.
After the story ran, the hospital's billing practices garnered national media attention, particularly the practice of balance billing.
Balance billing occurs when a patient receives services from an out-of-network provider and is billed for the difference between what the patient's insurer decides to pay and what the provider believes the care is worth.
Zuckerberg hospital — which is San Francisco's largest public hospital and houses a level 1 trauma center — temporarily halted balance billing beginning Feb. 1 as it worked on a long-term plan to address billing issues.
Now, the hospital's operator, the San Francisco Department of Public Health, has announced new billing policies at the facility.
The changes are aimed at shielding patients from large bills by removing them from payment disputes between the hospital and the insurance company, said Rachael Kagan, director of communications with the department.
"We don't have a large number of privately insured patients at Zuckerberg San Francisco General Hospital, but some of those who have been in that situation in the past have had a terrible experience and we want to rectify that," said Ms. Kagan.
"We don't want that to happen in the future. We know that it's very stressful to get a large bill and we consider our responsibility to the patients to care for them in all ways. They will have gotten excellent medical care from us, and we want to protect their financial well-being also," she added.
The changes
Under the new policies, balance billing will not resume at the hospital. The new balance billing policy will apply to accounts that were open on Feb. 1 or later. Accounts that were closed as of Feb. 1 will remain settled.
However, the hospital will still seek reimbursement from the insurance company.
"We still believe insurance companies should pay their fair share for the care that we provide to their customers. So, we will continue to seek reimbursement from them, but we will no longer put patients in the middle of that. We will no longer seek the balance from the individual patient," said Ms. Kagan.
The hospital estimated that up to 1,700 of its 104,000 patients a year may have received a balance bill.
Another change addresses the issue of privately insured patients receiving out-of-network care at the hospital. The hospital will no longer bill them more than they would pay at an in-network hospital for the same care, Ms. Kagan said.
"That will make a big and immediate difference for patients and will take away the issue of in network or out of network from the patient's point of view. But again, we still will seek reimbursement from the insurance companies," she added.
Other billing changes have a broader scope than just privately insured patients.
Zuckerberg hospital will also set a maximum out-of-pocket cost for patients at all income levels, with any insurance status, and this maximum will be income-based. No one will be charged more than 5 percent of their income.
For instance, those earning up to 138 percent of the federal poverty level would have no out-of-pocket cost, while people earning 1,000 percent of the federal poverty level or higher would see an out-of-pocket maximum of $4,800.
"That should provide some assurance that folks won't be experiencing sticker shock or have an extremely high hospital bill no matter what their insurance status is or what their circumstances are. We want to take that anxiety away," Ms. Kagan said.
Additionally, the hospital will make its patient financial assistance programs easier to qualify for so more people will get financial assistance. This involves increasing the threshold to qualify for the hospital's charity care program. The threshold to qualify will increase from 350 percent of the federal poverty level to 500 percent of the federal poverty level.
The hospital is also adjusting the "sliding scale" financial assistance program for San Francisco residents. Previously, Zuckerberg hospital assessed eligibility for the program based on income and assets but will now only take income into account.
Next steps
The changes will be fully implemented over the coming months.
Ms. Kagan said some changes will take less time to roll out than others. The ban on balance billing is implemented immediately. But it will take longer to implement the change regarding out-of-network vs. in-network costs because the hospital will need to get information from the individual's insurance plan, including what the charge would be for the same service at an in-network hospital.
"It's just a matter of changing policies and then starting to implement the new management of these accounts," said Ms. Kagan.
Overall, she said she’s pleased the hospital is taking these steps to better align its billing with its values and mission.
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