San Francisco’s Public Trauma Center Was Out-of-Network for Every Private Insurer. The Ambulance Took Her There Anyway.

On April 3, 2018, Nina Dang, 24, came off her bicycle in San Francisco with a broken arm. A bystander called an ambulance, and the paramedics took her to the emergency room at Zuckerberg San Francisco General Hospital, where she was X-rayed, scanned and splinted.

She had health insurance the whole time. The hospital charged $24,074.50. Her insurer, Premera Blue Cross, paid $3,830.79. The hospital billed her the remaining $20,243.71 and, by December, was threatening to send it to collections.

Nothing about that sequence was an accident or a coding error. It was policy, and the policy was public.

The one fact that made the bill possible

Zuckerberg San Francisco General Hospital did not participate in the networks of any private health insurer. A hospital spokesperson, Brent Andrew, confirmed to Vox that the hospital does not accept any private health insurance, and described that as a normal billing practice.

Out-of-network means the hospital and the insurer had never negotiated a price. An economist who studies surprise bills, Christopher Garmon of the University of Missouri Kansas City, told Vox his research found that just 1 percent of ambulance trips end at an out-of-network emergency room.

The hospital’s emergency room sees about 80,000 patients a year, by Vox’s count, and it receives one-third of the city’s ambulances.

That is an unusual position for any hospital. It matters more at this one, because Zuckerberg San Francisco General is a Level 1 trauma center running 24-hour trauma care, and it is the city’s public hospital.

A patient does not choose a trauma center. Paramedics choose it, and they choose it because the patient is bleeding.

So the people most likely to arrive at a hospital with no insurance contracts were the people least able to arrive anywhere else.

How the bills became public

The billing records came out through a Vox investigation by reporter Sarah Kliff, published on January 7, 2019 under the headline “A $20,243 bike crash: Zuckerberg hospital’s aggressive tactics leave patients with big bills.” Vox had spent a year collecting emergency room bills submitted directly by patients, more than a thousand of them, and reading what the paperwork actually said.

For this hospital, Vox reviewed five patient bills from its emergency room, in consultation with medical billing experts. Dang’s was one of them. Another patient named in the coverage, Alexa Sulvetta, 31, had by then spent more than $3,000 in legal fees contesting a $31,000 bill from her own visit.

Two of the five patients had reversed their bills, with significant time and effort. Three were still contesting them, arguing that they could not have known that the hospital an ambulance chose for them was outside their insurance.

The mechanism in every file was the same, and it has a name. Balance billing is when a hospital bills the patient for the balance the insurer did not pay.

For an in-network hospital, that balance is capped by contract. For a hospital in nobody’s network, there is no contract to cap it.

Credit where it belongs: this file exists because Vox obtained and published the documents. The Peril Desk is reading published records, not breaking a story.

What the numbers say when they are lined up

Charge: $24,074.50. Insurer payment: $3,830.79. Patient balance: $20,243.71.

The insurer did not refuse the claim. It paid what it pays an out-of-network provider, which is a fraction of the charge rather than a negotiated rate.

That is the shape of the trap. A denial is visible and appealable. A partial payment against an uncapped charge looks like the system working, right up until the envelope arrives.

The insured patient ended up owing roughly five times what her insurer paid.

The reversal

Then the thing that almost never happens happened.

The reporting landed on January 7, 2019. On Friday, February 1, Mayor London Breed and Supervisor Aaron Peskin called for a temporary halt to balance billing at the hospital. Only about 6 percent of the roughly 100,000 people the hospital as a whole treats each year carry private insurance, by SFist’s count; the hospital’s own April announcement put the share of patients on Medicare, Medi-Cal or no insurance at 94 percent.

Balance billing of patients was halted the same day, February 1, 2019, at first as a 90-day pause while the hospital built a longer-term plan. The revised policy went before a Board of Supervisors committee hearing in the third week of February.

On April 16, 2019, the hospital announced the replacement rules on its own website.

Insured patients treated out-of-network at Zuckerberg San Francisco General would be billed no more than they would pay for the same services at an in-network hospital. The hospital created an income-based cap on out-of-pocket payments across all income levels, from $0 for patients earning up to 138 percent of the federal poverty level to $4,800 at the top. It also loosened the eligibility rules for its financial assistance programs, and it stated that the February 1 halt “will not resume.”

Roughly three months separated the first published bill and the written policy that made that bill impossible.

Why the timeline is the story

This one ends with a dated policy document posted by the institution that wrote the original bills. The chain is short enough to follow end to end: published bill, public pressure, February suspension, April policy.

It also shows how narrow the original problem was. Nobody had to rebuild American health financing. One public hospital had to decide it would stop charging insured trauma patients the uncapped difference.

The city already owned the hospital. The decision was always available.

What did not change on its own

The halt in February was a pause, not yet a rule. The rule came in April. A pause and a policy are not the same instrument, and only one of them survives a change of administration.

The underlying condition that produced the bills was the absence of private network contracts. The April policy capped what patients could be charged. It was a patient-protection cap sitting on top of the contracting gap, not a closure of the gap itself.

Both facts are in the hospital’s own announcement and in the contemporaneous coverage.

Eight months after the crash, with the collections deadline approaching, Dang told Vox she was still thinking about the bill, “which is crazy to me.”

The Vox investigation and the hospital’s April 2019 announcement are both linked in Sources below.