After Vox stories, Zuckerberg Hospital is overhauling its aggressive billing tactics

Zuckerberg San Francisco General Hospital announced Tuesday it has overhauled its billing policies, a move that comes three months after a Vox story drew national attention to the hospital’s abnormal and aggressive billing tactics.

The hospital has for years made the rare decision to be out of network with all private health insurance plans. This created an acute problem for patients like like Nina Dang, 24, who made an unexpected trip to the hospital’s emergency room, the largest in San Francisco. An ambulance took Dang to the trauma center after a bike accident last April. She is insured by a Blue Cross plan, but she didn’t know that the ER does not accept insurance. She received a bill for $20,243.

After the Vox story ran, the hospital reduced Dang’s bill to $200, the copay listed on her insurance card.

Now, Zuckerberg San Francisco General Hospital (ZSFG) is essentially making the same change for all future patients: Its new billing policies will no longer charge those with private coverage “any more than they would have paid out of pocket for the same care at in-network facilities, based on their insurance coverage.”

This will put an end to the hospital’s use of a controversial practice call “balance billing,” when a hospital sends a patient a bill for the balance that an insurer won’t pay.

ZSFG will also create a new out-of-pocket maximum on what patients could end up owing for their treatment. The maximum is tethered to a patient’s income and ranges from zero dollars for the lowest earners to a $4,800 maximum for those with the highest incomes (1,000 percent of the poverty line, or $251,400 for a family of four).

These billing changes will apply to patients who currently have pending bills with ZSFG and will, according to a statement from the city, be implemented in the coming months. The city estimates that these billing changes will reduce the hospital’s revenue by approximately $1.9 million to $2.2 million annually, largely because of the new limits on what it can bill privately insured patients.

Separately, the California legislature is currently considering legislation that would bar all state hospitals from pursuing charges beyond a patient’s regular co-payment or deductible — a move they say was inspired by Vox’s reporting on the issue.

“These practices are outrageous,” California Assembly member Chiu, who represents part of San Francisco in the Assembly, told Vox in February. “No one who is going through the trauma of emergency room care should be subsequently victimized by outrageous hospital bills.”

That legislation was introduced in February and a hearing on the proposal is scheduled for early next week.