After Vox reporting, California moves forward on plan to end surprise ER bills

California is moving forward on a new law to end surprise emergency room bills like those that left one patient with a $20,000 treatment bill after a minor bike crash — legislation that was inspired by Vox’s reporting on the issue.

The new bill, introduced by state Assembly member David Chiu and state Sen. Scott Wiener, would bar California hospitals from pursuing charges beyond a patient’s regular copayment or deductible. The ban would apply even if a hospital was out of network with a patient’s health insurance.

The bill passed out of the California Assembly Committee on Health on Tuesday and now heads to the appropriations committee. No members of the health committee voted against the proposal.

In January, a series of stories published by Vox drew nationwide attention to the aggressive billing tactics used by Zuckerberg San Francisco General Hospital, which have left insured emergency room patients with overwhelming medical debt.

The problem is especially acute for patients like Nina Dang and Jason Zanders, both of whom were brought to the hospital by ambulance — Dang after a bike accident, and Zanders after being hit in the face with a pole hanging off a city bus.

Both Dang and Zanders have health insurance but didn’t realize that Zuckerberg Hospital was out of network for all private coverage — something that academic experts and patient advocates describe as an extremely unusual billing practice.

Dang ended up with a bill of $20,243, which the hospital reduced to $200, the copay listed on her insurance card, after our story about her experience. Zanders received a bill of $27,660 that he spent two years fighting in court.

Zuckerberg San Francisco General Hospital has, in light of reporting from both Vox and the San Francisco Chronicle, revised its billing policies to end surprise bills and cap what it charges privately insured patients, based on their income.

But Chiu, who represents San Francisco, thinks even more action is needed: a statewide law that would outlaw this kind of behavior.

“This all came to my attention through your article,” he said. “When your story broke, I started digging into how state law impacted the situation and saw that there were some clear holes in California policy that we needed to address.”

California actually has some of the country’s strongest protections against surprise medical bills, but the state’s laws never anticipated a hospital with billing practices like Zuckerberg San Francisco General.

In 2016, California passed a law that protected patients from surprise bills from out-of-network doctors they didn’t choose.

This might happen if, for example, a patient went to an in-network hospital and then received a bill from an out-of-network anesthesiologist or radiologist they never even met.

That law covered patients receiving scheduled care like surgery or delivering a baby. Separately, a decade-old California Supreme Court ruling provided similar protections for emergency room patients.

Neither the court ruling nor the 2016 law anticipated a situation like the one at Zuckerberg, where the entire hospital is “out of network” with all private health insurance.

Most big hospital ERs negotiate prices for care with major health insurance providers and are considered “in network.” But Zuckerberg San Francisco General had not done that bargaining. Prior to Vox’s reporting, it had a longstanding policy of remaining out of network with all private health insurance plans.

A hospital spokesperson initially told Vox that the hospital’s focus is on serving those with public health coverage, even if that means offsetting those costs with high bills for the privately insured.

“It’s a pretty common thing,” Brent Andrew, the hospital spokesperson, told Vox in January. “We’re the trauma center for the whole city. Our mission is to serve people who are underserved because of their financial needs. We have to be attuned to that population.”

But most data finds that this isn’t a common practice: Academic researchers estimate that just 1 percent of emergency room visits happen at out-of-network facilities. Similarly, I’ve seen this in my own reporting. I’ve read more than 1,000 emergency room bills, and in nearly all of them, the facility is “in network” with the patient’s insurance.

This new legislation would tackle that rarer situation where a hospital is not in network and then sends the patient a bill for whatever balance their insurer won’t pay.

There are two key parts to the proposal. First, the bill would prohibit hospitals from pursuing any balance that the patient owed beyond their regular copayment or contributions to the health plan’s deductible.

Second, the bill would regulate the prices the hospital could charge for its care, limiting the fees to 150 percent of the Medicare price or the average contracted rate in the area, whichever is greater.

“Patients would no longer receive exorbitant, surprise bills,” Chiu said. “The discussion between insurers and hospitals would become far more predictable.”

Chiu said the hospital and insurance industries are aware of the effort but haven’t yet seen the full text of the legislation, which will be introduced on Monday.

The bills included in Vox’s reporting on Zuckerberg San Francisco General Hospital were all submitted by patients to our emergency room billing database, which has served as the basis for a year-long investigation into ER billing practices. Vox has collected more than 1,900 bills from all 50 states and the District of Columbia.

Vox’s reporting on emergency room billing has resulted in more than $92,000 in emergency room bills being reversed, including three from Zuckerberg Hospital. It has also inspired new legislation in the Senate to prevent these bills from happening nationwide.

You can read the rest of our series here — and if you’re a local reporter interested in writing about bills in our database, you can fill out this form and we’ll try to help connect you with a patient.