In one case, the state paid a managed-care plan $383,635 to care for a person in Los Angeles County who had been dead for more than four years, according to California State Auditor Elaine Howle.

She said she found “” in Medicaid enrollment in which state and county records didn’t match up from 2014 to 2017, leading to other errors that persisted for years. The bulk of the questionable payments, or $3 billion, went to health plans that contract with the state to care for 80 percent of enrollees in California’s Medicaid program, known as Medi-Cal.

The program for low-income residents is the nation’s largest and funded by both the federal and state governments. The state findings echo similar problems cited by federal officials and come at a time when the Trump administration has applied extra scrutiny to California’s spending on Medicaid.

In the report, the state auditor said it’s critical for the state to have accurate information on eligibility “because it pays managed care plans a monthly premium for an increasing number of Medi-Cal beneficiaries regardless of whether beneficiaries receive services.”

(Story continues below.)

California’s Medicaid program has 13.2 million enrollees, covering about 1 in 3 residents. It has an annual budget of $107 billion, counting federal and state funds. Nearly 11 million of those enrollees are in , in which insurers are paid a monthly fee per enrollee to coordinate care.

The state’s Medicaid enrollment soared by more than 50 percent since 2013 due to the rollout of the Affordable Care Act and the expansion of Medicaid. Enrollment grew from 8.6 million in December 2013 to more than 13 million in December 2017, according to the audit report.

In the case of the dead patient, a family member had notified the county of the enrollee’s death in April 2014. However, the person’s name remained active in the state system, and California officials assigned the patient to a managed-care plan in November of that year.

From then on, the state kept making monthly payments of about $8,300 to the health plan until August 2018, shortly after the auditor alerted officials of the error. Auditors didn’t identify the health plan.

There also were costly mistakes in cases in which Medi-Cal pays doctors and hospitals directly for patient care – a program known as “fee for service.”

For instance, the state auditor found that Medi-Cal paid roughly $1 million in claims for a female patient in Los Angeles County from June 2016 to December 2017 even though the county office had determined in 2016 that she was ineligible.

In a written response to the auditor, the California Department of Health Care Services said it agreed with the findings and vowed to implement the auditor’s recommendations. However, the agency warned it may not meet the auditor’s timeline, which called for the main problems to be addressed by June 2019.

In a statement to California Healthline, the agency said it is implementing a quality control process and “where appropriate, DHCS will recover erroneous payments.”

Early on in 2014, as the ACA rolled out, the state struggled to clear a massive backlog of Medi-Cal applications, which reached about 900,000 at one point. There were widespread computer glitches and consumer complaints amid the increased workload at the county and state level.

In addition to questionable payments for care of ineligible enrollees, Howle and her audit team also discovered some patients who may have been denied benefits improperly. The state auditor identified more than 54,000 people who were deemed eligible by county officials but were not enrolled at the state level. As a result, those people may have had trouble getting medical care.

In February, a federal watchdog estimated that California had signed up 450,000 people under Medicaid expansion who may not have been eligible for coverage.

The inspector general at the U.S. Department of Health and Human Services said California made $1.15 billion in questionable payments during the six-month period it reviewed, from Oct. 1, 2014, to March 31, 2015.

, Seema Verma, administrator of the U.S. Centers for Medicare and Medicaid Services, told a U.S. Senate committee that she was closely tracking California to ensure the state “returns a significant amount of funding owed to the federal government related to the state’s Medicaid expansion.”

Verma expressed concern that states had overpaid managed-care plans during the initial years of Medicaid expansion, resulting in “significant profits for insurance companies.” By year’s end, she said she expects the federal government to recoup about $9.5 billion from California’s Medicaid program, covering overpayments from 2014 to 2016.

Tony Cava, a spokesman for Medi-Cal, said the state has already returned about $6.9 billion to the federal government and expects more than $2 billion more to be sent back by December.

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Like most people on Medicaid, the Los Angeles trucker was assigned to a private insurance company that coordinated his medical visits and treatment in exchange for receiving a set fee per month — an arrangement known as managed care.

But in 2016, when Nuñez’s retina became damaged from diabetes, the country’s largest Medicaid insurer, Centene, let him down, he said. After months of denials, delays and erroneous referrals, he claimed in a , the 62-year-old was left nearly blind in one eye. As a result, he lost his driver’s license and his livelihood.

“They betrayed my trust,” Nuñez said, sitting at his kitchen table with his thick forearms folded across his chest.

The current political debate over Medicaid centers on putting patients to work so they can earn their government benefits. Yet some experts say the country would be better served by asking this question instead: Are insurance companies — now receiving hundreds of billions in public money — earning their Medicaid checks?

More than two-thirds of Medicaid recipients are enrolled in such programs, a type of public-private arrangement that has grown rapidly since 2014, boosted by the influx of new beneficiaries under the Affordable Care Act.

States have eagerly tapped into the services of insurers as one way to cope with the expansion of Medicaid under the ACA, which has added 12 million people to the rolls. This fall, voters in three more states may pass ballot measures backing expansion. this public program to insurers has become the preferred method for running Medicaid in 38 states.

Yet the that these contractors improve patient care or save government money. When auditors, lawmakers and regulators bother to look, many conclude that Medicaid insurers fail to account for the dollars spent, deliver necessary care or provide access to a sufficient number of doctors. Oversight is sorely lacking and lawmakers in a number of states have raised alarms even as they continue to shell out money.

“We haven’t been holding plans to the level of scrutiny they need,” said Dr. Andrew Bindman, former director of the federal Agency for Healthcare Research and Quality and now a professor at the University of California-San Francisco. “This system is ripe for profit taking, and there is virtually no penalty for performing badly.”

In return for their fixed fees, the private insurers dole out treatment within a limited network, in theory allowing for more judicious, cheaper care. States contract with health plans as a way to lock in some predictability in their annual budgets.

More than Medicaid recipients are now covered by managed-care plans, up from fewer than 20 million people in 2000. (In traditional Medicaid, states pay doctors and hospitals directly for each visit or procedure — an approach that can encourage unnecessary or excessive treatment.)

Already, states funnel nearly annually to Medicaid insurers. That’s up from $60 billion a decade ago. Today’s spending is approaching what Pentagon awards annually to contractors.

Medicaid is good for business: The stock price of Nuñez’s insurer, Centene, has soared 400 percent since the ACA expanded Medicaid eligibility. The company’s chief executive took in $25 million last year, the highest pay for any CEO in the health insurance industry. In California, the largest Medicaid managed-care market with nearly 11 million enrollees, Centene and other insurers made $5.4 billion in profits from 2014 to 2016, according to a Kaiser Health News analysis.

Plans get to keep what they don’t spend. That means profits can flow from greater efficiency — or from skimping on care and taking in excess government payments.

“States are just giving insurers the keys to the car and a gas card,” said Dave Mosley, a managing director at Navigant Consulting and former finance director at the North Carolina Medicaid program. “Most states haven’t pressed insurers for the information needed to determine if there’s any return on their investment.”

Two of California’s most profitable insurers, Centene and Anthem, ran some of California’s worst-performing Medicaid plans, state quality scores and complaints in government records show. California officials have been clawing back billions of dollars from health plans after the fact.

For nearly two decades, federal officials have tried building a national Medicaid database that would track medical care and spending across states and insurers. It’s still , hampered by differing state reporting methods and refusals by some health plans to turn over data they deem trade secrets.

In July, a federal inspector general’s report accused Medicaid insurers of purposefully ignoring fraud and overpayments to doctors because inflated costs can lead to higher rates in the future.

In a report last month, the U.S. Government Accountability Office disclosed that California’s Medicaid program is unable to electronically send records justifying billions of dollars in spending, forcing federal officials to sift through thousands of documents by hand. California said it can’t share key files electronically because it uses 92 separate computer systems to run the program.

“You simply cannot run a program this large when you can’t tell where the money is going and where it has been,” said Carolyn Yocom, a health care director at the GAO.

Today, Medicaid consumes the single-largest share of state budgets nationwide at nearly 30 percent — up from less than 21 percent a decade ago — crowding out funding for education, roads and other key priorities.

“If anything, our results suggest that the shift to Medicaid managed care increased Medicaid spending,” researchers at the Congressional Budget Office and the University of Pennsylvania concluded in 2013, based on a .

Industry officials insist that managed care saves money and improves care. Medicaid Health Plans of America, an industry trade group, points to a showing that health plans nationally saved the Medicaid program $7.1 billion in 2016.

Health plans also say they can help modernize the program, created more than a half century ago, by upgrading technology and adopting fresh approaches to managing complex patients.

Getting it right has big implications for patients and taxpayers alike, but the results in many states aren’t reassuring.

State lawmakers in , both Republicans and Democrats, criticized their Medicaid program last year for ignoring the poor performance of two insurers, UnitedHealthcare and Centene, even as the state awarded the companies new billion-dollar contracts.

In Illinois, the state didn’t properly monitor $7 billion paid to Medicaid plans in 2016, leaving the program unable to determine what percentage of money went to medical care as opposed to administrative costs or profit.

In April, Iowa’s state ombudsman said Medicaid insurers there had denied or reduced services to disabled patients in a “” way. In one case, an insurer had cut a quadriplegic’s in-home care by 71 percent. Without the help of an aide to assist him with bathing, dressing and changing out his catheter he had to move to a nursing home, according to the ombudsman, Kristie Hirschman.

“We are not talking about widgets here,” Hirschman said. “In some cases, we are talking about life-or-death situations.”

Meanwhile, the Trump administration has sent mixed signals on Medicaid oversight. Seema Verma, administrator for the Centers for Medicare & Medicaid Services, has promoted a new, nationwide scorecard and vowed to ramp up audits targeting states and health plans.

“We need to do better,” Verma said in a to the Medicaid managed-care industry. “Medicaid has never developed a cohesive system of accountability that allows the public to easily measure and check our results.”

But consumer advocates also are concerned that Verma’s efforts to roll back “” will weaken accountability overall. Many also disagree with her support of Medicaid work requirements.

Nuñez, the truck driver who lost much of his sight, is suing a unit of Centene for negligence and breach of contract. The company has denied the allegations in and declined to comment further, citing the pending .

Talk of requiring Medicaid recipients to work is hard for him to take. “I need my health to work,” he said. “They took that away from me.”

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Stacks and stacks of it.

Stuck with decades-old technology, the nation’s largest Medicaid program forces federal officials to sift through thousands of documents by hand rather than sending electronic files. That’s one of the critical findings in a from the federal government’s chief watchdog citing inefficient and lax oversight of Medicaid nationwide.

To illustrate, the U.S. Government Accountability Office published a photo showing piles of records submitted for one three-month period. One folder was placed upright to show the height of the heap.

“It’s really amazing when you look at that picture,” said Carolyn Yocom, a health care director at the GAO who focuses on Medicaid, the federal-state health insurance program for low-income people. “For this type of reporting on expenditures, California really should be able to provide that electronically.”

California, with more than 13 million Medicaid enrollees, said it’s hamstrung because it uses 92 separate computer systems to run its Medicaid program — although it has plans underway to modernize its technology.

“Given system limitations and the magnitude of the supporting documentation, providing it electronically is currently not feasible,” the California Department of Health Care Services said in a statement.

The state’s Medicaid program, known as Medi-Cal, has struggled with technology for years. The state thought it had a solution in 2010 when it awarded a $1.7 billion contract to Xerox, which included $168 million for a new system. But after years of delay, the state scrapped the contract in 2016 and started from scratch, leaving the patchwork system in place a few more years.

Nationwide, despite industry buzz about electronic medical records, smartphone apps and artificial intelligence, a lot of paper is still being pushed across the health care system. Consider all those forms patients repeatedly fill out in the waiting room, the screeching sound of fax machines inside doctors’ offices and the bulging binders of patients’ records in file rooms.

Under Medicaid, states submit data quarterly to the federal government on their spending and include supporting documents such as invoices, cost reports and eligibility records. In California, reports on spending are shared electronically, but the copious supporting documentation required for federal review is not, according to the GAO.

When the Xerox venture failed, the company agreed to pay California more than $123 million as part of a settlement agreement, according to state officials.

Meantime, Conduent, the services unit of Xerox that was spun off into a separate company, was left to keep operating the system and process claims.

Last month, the state  to DXC Technology of Tysons, Va., to take over some operations from Conduent. The state said the contract could be worth $698 million over 10 years.

Separately, California’s Medicaid officials are working on plans for a new system that would cost an estimated $500 million. Under the federal-state partnership on Medicaid, the federal government would cover 90 percent of those costs for design and implementation, and the state’s share would be about $50 million.

Pressure has been mounting on California to fix the situation. The Medicaid IT system “needs to be replaced, because it is more than 40 years old, its operations are inefficient, maintaining the system is difficult and there is a high risk of system failure,” state auditor Elaine Howle wrote in to Gov. Jerry Brown and legislative leaders.

In her letter, Howle said the state was paying about $30 million annually to maintain the legacy system.

Overall, Medi-Cal serves 1 in 3 Californians. The annual Medicaid budget in California is about $104 billion, counting federal and state funds.

Beyond California, the GAO criticized the U.S. Centers for Medicare & Medicaid Services (CMS) more broadly. One complaint: Federal officials assign a similar number of staff to states for reviewing case files — even though some states, like California, pose a far bigger risk for enrollment errors and misspent money due to their size and complexity.

For instance, the report’s authors said, CMS reviewed claims for the same number of newly eligible Medicaid enrollees — 30 — in California as it did in Arkansas, even though California had 10 times the number of newly enrolled patients under the Affordable Care Act.

The report also said CMS devoted a similar number of staff to review both California, which represents 15 percent of federal Medicaid spending, and Arkansas, which accounts for 1 percent.

CMS “needs to step back and assess where are the biggest threats and vulnerabilities,” Yocom said. “If you aren’t looking, you don’t know what you aren’t catching.”

Overall, from fiscal years 2014 to 2018, federal Medicaid spending increased by about 31 percent, according to the GAO report. But the full-time staff at CMS dedicated to financial oversight declined by roughly 19 percent over the same period.

In a July 18 letter to the GAO, the U.S. Department of Health and Human Services agreed with the agency’s recommendations for improving oversight efforts.

HHS wrote that it “will complete a comprehensive national review to assess the risk of Medicaid expenditures reported by states and allocate resources based on risk.”

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The story of Drew Calver was first reported by Kaiser Health News and NPR on Monday as part of the “Bill of the Month” series, which examines U.S. health care prices and the troubles patients run up against in the $3.5 trillion industry.

In Calver’s case, the 44-year-old father of two had suffered a heart attack in April 2017 and a neighbor rushed him to the nearest emergency room, which was an out-of-network hospital under his school district health plan. His insurance paid the hospital nearly $56,000 for his four-day hospitalization and procedures to clear his blocked “widow-maker” artery.

But the hospital, St. David’s Medical Center in Austin, wasn’t satisfied with that amount and went after the high school history teacher and swim coach for an additional $109,000 in a practice known as “balance billing.”

Within hours of the story publishing, the hospital offered to waive nearly the entire bill and charge him $782.29 instead. By Thursday, St. David’s lowered the amount even further. Calver said he paid it off over the phone, eager to put this stressful saga behind him.

Calver said it’s a relief that his family doesn’t face a six-figure bill and threatening letters from the hospital’s debt collector. But he said he worries about other patients hit with unjust medical bills of $10,000 or $20,000 who don’t catch the media’s attention.

“It feels great that this is over for me and my family. But this isn’t just about my bill,” Calver said in an interview. “I don’t feel any consumer should have to go through this.”

Calver and his wife, Erin, said they were encouraged by the outpouring of support and attention they received. Drew Calver gave local TV interviews after teaching class and his story was featured on CBS This Morning. The couple said they’re hopeful the national conversation that ensued will lead to changes that help other consumers across the country.

Just after paying off his hospital bill, Calver walked to the school cafeteria Thursday to grab lunch. One of the cafeteria workers approached him and shared that she, too, was facing a huge medical bill from the same Austin hospital. Calver said he plans to follow up with the woman and assist in any way he can.

“This is the next way I can be of help to others,” he said.

The hospital system, St. David’s HealthCare, continues to defend its handling of Calver’s bill, saying it “did everything right in this particular situation.” It also pointed out that it informed the family on several occasions that they could apply for a discount through a financial assistance program, based on their household income.

Calver said he didn’t fill out the financial assistance paperwork earlier because he didn’t feel he owed the $108,951 — and had been contesting the validity of the charges all along.

His health plan said the $55,840 it paid the hospital should have satisfied the hospital’s claim. And Calver was already paying $1,400 as coinsurance, which was the out-of-pocket amount calculated by his health plan.

HCA Healthcare, the largest for-profit hospital chain in the country, and two nonprofit foundations own St. David’s.

The chief executive of St. David’s HealthCare, C. David Huffstutler, wrote a memo Monday addressed to his board of governors about Calver’s story. A St. David’s employee shared the memo with Kaiser Health News, and the hospital didn’t dispute its accuracy.

“I realize this is not the type of coverage any of us want for St. David’s HealthCare,” Huffstutler wrote in his Aug. 27 memo. “With this story, we had a number of circumstances that made it difficult to neutralize the coverage — a monthly news segment that seeks to empower patients to challenge their medical bills; a gap in the system that is affecting patients … and, a compelling patient story.”

Huffstutler also wrote that the hospital’s charges of $165,000 were “reasonable and customary.” He said that the school district and its health plan administrator, Aetna, chose to offer a narrow network plan that “can potentially place a heavy financial burden on the patient.”

Consumer advocates said the hospital should have erased the bill completely after putting the family through so much stress for months.

The drastic reduction in the bill “shows that these hospital numbers are just made up,” said Bonnie Sheeren, who runs Houston Health Advocacy and assists consumers with their medical bills. “It should be a zero balance, and the hospital should pay for therapy sessions to help this family recover from the billing ordeal.”

Several states have passed laws or introduced programs to help shield patients from surprise medical bills, particularly those stemming from emergencies.

But those state rules don’t apply to most U.S. workers because they get their health coverage from employers that are self-insured, meaning the companies pay claims out of their own funds. Federal law governs most of those health plans, and it does not include such protections.

Rep. Lloyd Doggett (D-Texas) heard Calver’s story on the radio while driving Monday and immediately wrote the family a letter offering his support. Calver teaches at the high school that Doggett attended.

The lawmaker proposed last year aimed at limiting surprise billing for patients, but he said it hasn’t received a hearing in the current Congress.

“This is a nationwide problem, and we need a nationwide solution,” Doggett said in an interview. “We have a system where the patient, the most vulnerable person of all those involved, is caught between the insurer and the health care provider. … These problems are solvable.”

Zack Cooper, an associate professor of public health and economics at Yale University, has studied hospital billing practices extensively and said the nearly $109,000 bill was no accident.

He noted that St. David’s, like other hospitals, advertises short wait times for its emergency rooms in order to attract out-of-network patients like Calver. Cooper said his case illustrates the need for better regulation of out-of-network billing at the state or federal level.

“The idea that a hospital would send a bill that will probably bankrupt an individual boggles the mind. For me, that is emblematic of a fairly toxic culture,” Cooper said.

“This was a remarkable story, and it has done remarkable good for him,” Cooper added. “But we shouldn’t be in a world where to avoid financial ruin you have to hope your story is featured in the popular press. We can do better than this.”

Bill of the Month is a crowdsourced investigation by Kaiser Health NewsÌý²¹²Ô»åÌýthat dissects and explains medical bills.

Ashley Lopez of member station KUT in Austin contributed . “CBS This Morning” featured it on Wednesday.

Do you have a bill you would like us to examine? Submit it here.

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UPDATE: This story has an addendum reflecting the hospital’s latest settlement offer.

Drew Calver took out his trash cans and then waved goodbye to his wife, Erin, as she left for the grocery store the morning that upended his picture-perfect life.

Minutes later, the popular high school history teacher and swim coach in Austin, Texas, collapsed in his bedroom from a heart attack. He pounded his fist on the bed frame, violent chest pains pinning him to the floor.

“I thought I was dying,” the 44-year-old father recalled. He called out to the only other person in the house, his oldest daughter, Eleanor, now 7. Using his voice, he texted his wife, who was at the store with their youngest, Emory, now 6. A neighbor rushed him to the nearby emergency room at St. David’s Medical Center on April 2, 2017.

The ER doctors confirmed the trauma to Calver’s heart and admitted him to the hospital’s cardiac unit. The next day, doctors implanted stents in his clogged “widow-maker” artery.

The heart attack was a shock for Calver, an avid swimmer who had competed in an Ironman triathlon just five months before.

Despite the surprise, even from his hospital bed, Calver asked whether his health insurance would cover all of this, a financial worry that accompanies nearly every American hospital stay. He was concerned because St. David’s is out-of-network on his school district health plan. The hospital told him not to worry and that they would accept his insurance, Calver said.

The hospital charged $164,941 for his surgery and four days in the hospital. Aetna, which administers health benefits for the Austin Independent School District, paid the hospital $55,840, . Despite the difference of more than $100,000, with the hospital’s prior assurance, Calver believed he would not bear much, if any, out-of-pocket payment for his life-threatening emergency and the surgery that saved him.

And then the bills came.

Patient: Drew Calver, 44, a high school history teacher and father of two in Austin, Texas.

Total Bill: $164,941 for a four-day hospital stay, including $42,944 for four stents and $10,920 for room charges. Calver’s insurer paid $55,840. The hospital billed Calver for the unpaid balance of $108,951.31.

Service Provider: St. David’s HealthCare, a large hospital system in central Texas. It’s run by HCA Healthcare, the nation’s largest for-profit hospital chain, and two nonprofit foundations.

Medical Treatment: Emergency room treatment followed by four days in the hospital, most of it spent in the cardiac unit. During surgery, four stents were implanted to clear a blockage in his left anterior descending artery, the source of so-called widow-maker heart attacks, because they are so frequently deadly.

What Gives: St. David’s Medical Center is billing Calver for the $109,000 balance — an amount nearly twice his annual pay as a teacher.

The hospital’s billing company sent a notice June 26, urging him to take advantage of this “”

“They’re going to give me another heart attack stressing over this bill,” Calver said. “I can’t pay this bill on my teacher salary, and I don’t want this to go to a debt collector.”

In the wake of his heart attack, Calver fell victim to twin medical billing practices that increasingly bedevil many Americans, even as legislators have tried to protect them: surprise bills and balance billing.

Surprise bills occur when a patient goes to a hospital in his insurance network but receives treatment from a doctor that does not participate in the network, resulting in a direct bill to the patient. They can also occur in cases like Calver’s, where insurers will pay for needed emergency care at the closest hospital — even if it is out-of-network — but the hospital and the insurer may not agree on a reasonable price. The hospital then demands that patients pay the difference, in a practice called balance billing.

Several states, including Texas (as well as New York, California and New Jersey) have passed laws to help shield consumers from surprise bills and balance billing, particularly for emergency care.

But there’s : Those state-mandated protections typically don’t apply to people, like the Calver family, who get their health coverage from employers that are self-insured, meaning the companies or employers pay claims out of their own funds.  Federal law governs most of those health plans — and it does not include such protections.

About of people with employer health benefits are covered by self-insured plans, but many don’t even know it, since employers typically hire an insurer to administer the plan and employees carry a card bearing the name of Blue Cross Blue Shield or another major insurer.

This case “illustrates the dangers that even insured people face,” said Carol Lucas, an attorney in Los Angeles with experience in health care payment disputes. “The unfairness is especially acute when there is an emergency and the patient, who might ordinarily be completely compliant, has no say about the facility he winds up in.”

In a statement, St. David’s HealthCare defended its handling of Calver’s bill and sought to blame the school district and Aetna for offering such a narrow network.

“While we did everything right in this particular situation, the structure of the patient’s insurance plan as a narrow network product placed a large portion of the financial responsibility directly on the patient because our hospital was not in-network,” the hospital said.

Patients experiencing an emergency are particularly at risk of landing at an out-of-network hospital. St. David’s said once ER patients are deemed stable, it tries to transfer them to an in-network facility. “However, this is not always possible because the patient’s health must come first,” the hospital said.

This case also raises questions about the validity of the hospital’s charges.

Industry analysts and consumer advocates say St. David’s has a reputation for exorbitant billing and for trying to collect big payouts as an out-of-network provider. “This is a well-known, problematic provider. We’ve seen multiple bills from them and they are always highly inflated,” said Dr. Merrit Quarum, chief executive of WellRithms, which scrutinizes medical bills for self-funded employers and other clients nationwide.

WellRithms reviewed Calver’s bill in detail at the request of Kaiser Health News and determined that a reasonable reimbursement would have been $26,985. That’s less than half .

Healthcare Bluebook, which offers cost estimates for medical tests and treatments, arrived at a similar conclusion. It said a fair price for a hospitalization in Austin involving four heart stents would be about $36,800. St. David’s Medical Center charged four times that amount.

Quarum and other analysts who reviewed the bill said several charges stood out, especially on the four stents, which were billed at $42,944. Coronary stents are typically metal mesh tubes implanted in arteries to improve blood flow. Most are coated with drugs to assist in healing.

St. David’s charged $19,708 apiece for two Synergy stents made by device giant Boston Scientific. Two other stents used were far cheaper.

The $20,000 price tag represents a significant markup of what U.S. hospitals typically pay themselves for stents. The median price paid by hospitals for the Synergy stent was $1,153 over the past year, according to the nonprofit research firm ECRI Institute.

“St. David’s charge of over $19,000 for those stents is absolutely outrageous,” Quarum said.

St. David’s declined to comment on its markup for the stents or what it actually paid the manufacturer.

Resolution: For now, Calver still faces a bill for $108,951.31, with none of the parties involved in his treatment or coverage providing significant redress.

In fact, the hospital’s debt collector demanding payment in full.

After a reporter made inquiries, St. David’s said collection efforts were put on hold, and a hospital representative called Calver, offering to help him apply for a discount based on his income.

In a statement, St. David’s said “we work with all patients needing financial assistance to help determine their eligibility for this discount.”

Calver said that approach doesn’t address the balance billing or whether the charges were appropriate.

A spokeswoman for Aetna said “we are actively working to rectify the situation on behalf of the member.” But the health plan hasn’t shared any further details. The Austin school district declined to discuss this specific case.

Calver said the whole ordeal has been incredibly stressful for him and his wife.

“I am stuck in the middle of this convoluted, flawed system,” he said. “I’ve never owed a large amount like this or had credit card debt. What does it mean if this goes on my credit report?”

The Takeaway: Faced with a surprise bill or a balance-billing situation, don’t rush to pay any medical bills you receive. First, let the insurance process play out completely so you’re sure what the health plan is paying the hospital and doctors — and what you ultimately might be responsible for, in terms of coinsurance or copayments.

Ask for an itemized bill. Review the charges carefully and talk to your insurer, your employer and the hospital if the prices seem out of line. Arm yourself with estimates you can find online of the average prices charged in your area as you negotiate with all the players.

If the bills keep coming, talk to your employer’s benefits department or the state insurance department about your legal protections. The situation will vary depending on the type of health insurance you have and the state you live in. Tell any debt collection agencies that may contact you that you are contesting the bill.

With any of these entities, you can always appeal to reason, with this argument: You had no choice but to go to an out-of-network hospital in the case of a life-threatening emergency, so the insurer and the hospital should work out payment and hold you harmless from financially crippling bills.

Bill of the Month is a crowdsourced investigation by Kaiser Health News and that dissects and explains medical bills.

Ashley Lopez, a reporter with NPR member station KUT in Austin, contributed to the audio story in this report.

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Summers called Blue Shield of California and got her policy reinstated — then she said it happened again in March and this time, the lapse in coverage dragged on for three months.

Without insurance to cover her medications and doctor visits, her arthritis and fibromyalgia worsened to the point that she could barely walk, she said. In June, she said, the state granted her permission to switch to another insurer.

“This entire mess has been so incredibly stressful,” said Summers, 49, a personal assistant in Los Angeles who had paid $593 a month in premiums. “For Blue Shield just to pull the plug like this is infuriating.”

Around the state, consumers with individual Blue Shield policies, like Summers, say they have been subject to sudden, erroneous cancellations, especially in recent months, forcing them to go without heart medicine, skip vaccinations for their children and pay hundreds of dollars out-of-pocket for other medical care. On social media, customers have described frantic attempts to get their coverage reinstated.

We apologize for the inconvenience. DM you member ID and a Specialist can look into this for you. – AV

— Team Shield (@TeamShieldBSC)

We apologize for the trouble and would like to look into this. DM us your member ID and contact info and a member of our team will reach out to address this with you. – JN

— Team Shield (@TeamShieldBSC)

We apologize for the frustration. A Specialist will reach out shortly to assist you. – JN

— Team Shield (@TeamShieldBSC)

Blue Shield has acknowledged failures in enrollment and billing for some customers who purchased individual policies since 2014, both inside and outside the Covered California exchange. The company declined to specify how many customers were affected. The problems don’t appear to involve people with employer coverage or enrolled in government health programs.

In a , the San Francisco insurer blamed many of these problems on an outside contractor it had hired in preparation for the launch of the Affordable Care Act in 2014. In a , the contractor, HealthPlan Services, denied the allegations and accused Blue Shield of sharing inaccurate customer data.

In a , Blue Shield said: “The roll out of the Affordable Care Act was hard on the entire health care system. Our vendor failed to provide the support it promised and we spent millions of dollars to mitigate the impacts to our members.”

On Friday, Summers in Los Angeles County Superior Court, alleging breach of contract and seeking class-action status on behalf of other customers. The insurer couldn’t be reached for comment about the complaint.

Scott Glovsky, a Pasadena, Calif., attorney representing Summers, said Blue Shield has known about these problems for years. “Blue Shield is taking people’s hard-earned dollars and then abandoning them when they’re sick,” he said.

Tina Hoover, 47, a horse trainer in Sherman Oaks, Calif., said Blue Shield canceled her policy twice in two months, even though she’d been paying her premiums faithfully for years.

Blue Shield denied more than $1,000 in doctor visits, saying she’d been terminated. After four calls, inconsistent responses, non-responses and a pointed comment by her husband on Twitter, she finally got her insurance back, she said.

“It was frightening that Blue Shield could be so disorganized on something so important like my health care,” said Hoover, who pays $858 a month in premiums and has been a policyholder with the insurer for 15 years.

All health insurers face complaints, from improper denials of care to annoying customer service. But some experts say these persistent breakdowns in customer service at Blue Shield represent a black eye for California’s third-largest health insurer, which has 460,000 customers on the Covered California exchange and 3.8 million enrollees overall.

“I’ve never seen anything on this scale for such basic insurance operations,” said Paula Wade, an industry analyst at Decision Resources Group in Nashville, Tenn. “Honest to goodness, if you can’t take people’s money and credit their account — that’s incredibly simple.”

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— Team Shield (@TeamShieldBSC)

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— Team Shield (@TeamShieldBSC)

Across its plans last year, Blue Shield had the per 10,000 enrollees among the eight largest health insurers statewide, according to the California Department of Managed Health Care. Blue Shield had 7.43 complaints per 10,000 enrollees, followed by Anthem Blue Cross (5.83), UnitedHealthcare (4.72) and Kaiser Permanente (4.6). (Kaiser Health News, which produces California Healthline, is not affiliated with Kaiser Permanente.)

For its individual market plans, Blue Shield chose to outsource sign-ups, billing and payment processing to HealthPlan Services, a major contractor for insurers industrywide. In its breach-of-contract lawsuit against the contractor, Blue Shield said it needed outside help to handle the dramatic overhaul of the individual market in 2014 under the ACA.

By June 2014, Blue Shield said it had formed a team of people “whose sole job was to address the failures in HPS’ services to ensure that Blue Shield’s customers’ interests were not impacted,” according to the lawsuit.

But the glitches persisted, and Blue Shield said in its lawsuit that it has lost tens of millions of dollars due to the contractor’s “egregious” failures on billing, refunds and related matters.

HealthPlan Services’ “data was ever-changing, inconsistent and flat-out incorrect,” Blue Shield said in the 15-page complaint in San Francisco federal court.

In a statement to California Healthline, HealthPlan Services called Blue Shield’s claims “baseless” and said it has a “successful track record of providing quality services to its clients and their members.”

But in court papers, Blue Shield said the problems went beyond the sudden cancellations.

For instance, about 14,000 Blue Shield customers experienced “multiple attempted charges on their bank accounts” over one weekend, according to the insurance company’s lawsuit. About half the time, Blue Shield alleged, its contractor proposed refunds or credits that were excessive or had no basis at all. One time, a $27,000 refund went to the wrong customer, according to the lawsuit.

In April 2017, Blue Shield said, it initiated termination of the vendor’s contract.

In an Aug. 13 , HealthPlan Services said “Blue Shield’s highly unusual data maintenance and transmission methods and business processes resulted in customer-facing errors that were directly attributable to Blue Shield’s conduct.”

In a statement, Blue Shield countered that “HPS’ allegations are unfounded and we look forward to responding to them in the legal proceedings.”

Meantime, San Francisco resident Burcu Sivrikaya, 32, said she found out late last month that Blue Shield had canceled her coverage — effective May 1. She spent hours on the phone talking to seven different company representatives trying to get her policy reinstated, only to be told it would take 30 days, she said. “Are they using pen and paper? Why does it take 30 days? It’s insane.”

Now Sivrikaya, a social media manager, is trying to get Blue Shield to refund the $1,179 she said she paid in premiums for the three months the company withdrew coverage.

The Department of Managed Health Care fined Blue Shield and a subsidiary $557,500 last year for and a variety of . Blue Shield is contesting some of those allegations and penalties, according to the state.

Blue Shield noted that it performed well on certain categories in the state data, such as an extremely low complaint rate among medical providers.

The company also said its customer satisfaction score improved in a recent consumer survey by Forrester Research, increasing by nearly 2 percentage points to 63.6 out of 100. Forrester still labeled Blue Shield’s performance as “poor,” putting it in ninth place out of 17 health insurers that were rated this year.

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The state marketplace, Covered California, said the rate increase for 2019 would have been closer to 5 percent if the federal penalty for going without health coverage had not been repealed in last year’s Republican tax bill.

The average increase in California is smaller than the double-digit hikes expected around the nation, due largely to a healthier mix of enrollees and more competition in its marketplace. Still, health insurance prices keep growing faster than wages and general inflation as a result of rising medical costs overall, squeezing many middle-class families who are struggling to pay their household bills.

The 8.7 percent increase in California ends two consecutive years of double-digit rate increases for the state marketplace.

“It’s not great that health care costs are still increasing that much, but the individual market is not sticking out like a sore thumb like it has in other years,” said Kathy Hempstead, senior adviser at the Robert Wood Johnson Foundation. “It’s falling back to earth.”

The future may be less bright. An estimated 262,000 Californians, or about 10 percent of individual policyholders in and outside the exchange, are expected to drop their coverage next year because the ACA fines were eliminated, according to the state. Peter Lee, executive director of Covered California, warned that the exodus of healthier consumers will drive up insurance costs beyond 2019 — not just for individual policyholders but for California employers and their workers.

“We are paying, in essence, a surcharge for federal policies that are making coverage more expensive than it should be,” Lee said in an interview. “There will be more of the uninsured and more uncompensated costs passed along to all of us.”

Critics of the Affordable Care Act say it has failed to contain medical costs and left consumers and taxpayers with heavy tabs . Nearly 90 percent of Covered California’s 1.4 million enrollees qualify for federal subsidies to help them afford coverage.

Foiled in its attempt to repeal Obamacare outright, the Trump administration has taken to rolling back key parts of the law and has slashed federal marketing dollars intended to boost enrollment. Instead, the administration backs cheaper alternatives, such as short-term coverage or association health plans, which don’t comply fully with ACA rules and tend to offer skimpier benefits with fewer consumer protections.

Taken together, those moves are likely to draw healthier, less expensive customers out of the ACA exchanges and leave sicker ones behind.

Nationally, 2019 premiums for silver plans — the second-cheapest and most popular plans offered — are expected to jump by 15 percent, on average, according to an of 10 states and the District of Columbia by the Avalere consulting firm. across the country, however. Decreases are expected in Minnesota while insurers in Maryland are seeking increases.

In California, exchange officials emphasized, consumers who shop around could pay the same rate as this year, or even a little less.

Christy McConville of Arcadia already spends about $1,800 a month on a Blue Shield plan for her family of four, opting for “platinum” coverage, the most expensive type. Her family doesn’t qualify for federal subsidies in Covered California.

She’s worried about further increases and doesn’t want to switch plans and risk losing access to the doctors she trusts. “We’re getting right up to the limit,” McConville said.

Amanda Malachesky, a nutrition coach in the Northern California town of Petrolia, said the elimination of the penalty for being uninsured makes dropping coverage more palatable. Her family of four pays almost $400 a month for a highly subsidized Anthem Blue Cross plan that has a $5,000 deductible.

“I’ve wanted to opt out of the insurance model forever just because they provide so little value for the exorbitant amount of money that we pay,” said Malachesky, who recently paid several hundred dollars out-of-pocket for a mammogram. “I’m probably going to disenroll … and not give any more money to these big bad insurance companies.”

Covered California is aiming to stem any enrollment losses by spending more than $100 million on advertising and outreach in the coming year. In contrast, the Trump administration spent only $10 million last year for advertising the federal exchange across the 34 states that use it.

Also, California lawmakers are looking at ways to fortify the state exchange. State legislators are considering bills that would limit the sale of short-term insurance and prevent people from joining association health plans that don’t have robust consumer protections.

However, California hasn’t pursued an insurance mandate and penalty at the state level, which both health plans and consumer advocates support. New Jersey and Vermont have enacted such measures.

Lee said it’s up to lawmakers to decide whether a state mandate makes sense.

David Panush, a Sacramento health care consultant and a former Covered California official, said some lawmakers may be reluctant to push the idea, even in deep-blue California.

“The individual mandate has always been the least popular piece of the Affordable Care Act,” he said.

Despite the constant uncertainty surrounding the health law, many insurers nationally are posting profits from their ACA business and some plans are looking to expand further on the exchanges.

In California, the same 11 insurers are returning, led by Kaiser Permanente and Blue Shield of California. Together, those two insurers control two-thirds of exchange enrollment. (Kaiser Health News, which publishes California Healthline, is not affiliated with Kaiser Permanente.)

The Covered California rate increases are fairly uniform across the state. Premiums are climbing 9 percent across most of Southern California as well as in San Francisco. Monterey, San Benito and Santa Cruz counties faced the highest increase at 16 percent, on average.

The rates are subject to state regulatory review but are unlikely to change significantly. Open enrollment on the exchange starts Oct. 15.

The ACA’s expansion of coverage has dramatically cut the number of uninsured Californians. The proportion of Californians lacking health insurance fell to 6.8 percent at the end of last year, down from 17 percent in 2013, federal data show.

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Despite receiving billions of dollars in taxpayer money, Medicaid insurers are lax in ferreting out fraud and neglect to tell states about unscrupulous medical providers, according to a federal report released Thursday.

The U.S. Health and Human Services’ inspector general’s office said a third of the health plans it examined had referred fewer than 10 cases each of suspected fraud or abuse to state Medicaid officials in 2015 for further investigation. Two insurers in the program, which serves low-income Americans, didn’t identify a single case all year, the .

Some health plans terminated providers from their networks for fraud but didn’t inform the state. The inspectors said that could allow those doctors or providers to defraud other Medicaid insurers or other government programs in the same state.

In addition, some insurance companies failed to recover millions of dollars in overpayments made to doctors, home health agencies or other providers. The inspector general said insurers stood to benefit financially from this because higher costs can justify increased Medicaid rates in the future. (The report didn’t name specific insurers or states.)

Medicaid plans “are required by law to find fraud and abuse and to share information with states,” said Meridith Seife, a deputy regional inspector general in New York and a co-author of the report. “We are concerned anytime we see evidence that managed-care organizations are not doing that in a rigorous way. There’s a lot of taxpayer dollars at stake.”

In general, Medicaid has struggled for years with poor oversight and billions lost to improper payments, drawing regular scrutiny from federal auditors but little improvement. Authorities have found clinics overprescribing opioids to Medicaid patients and doctors running pill mills. Hospitals and other providers have falsified Medicaid claims, paid illegal kickbacks for patient referrals and billed for unnecessary services.

Health insurers serve about 55 million Medicaid patients across 38 states, and play an increasingly vital role in running the giant public insurance program. States generally split the cost of Medicaid with the federal government.

One in 5 Americans is on Medicaid and enrollment is poised to rise even further as more states consider expansion under the Affordable Care Act. About 75 percent of Medicaid patients are part of a privatized system in which managed-care companies are paid fixed fees per patient to coordinate their care. Big, publicly traded companies such as UnitedHealth, Anthem and Centene dominate the business. In some states like California, evidence shows the funding often flows to the plans with little oversight, sometimes regardless of their performance.

These companies tout their expertise at spotting suspicious billing patterns and chasing down criminals using sophisticated data mining, but the inspector general found that their fraud-fighting results don’t always match the rhetoric.

Andy Schneider, a former federal health official and now a research professor at Georgetown University’s Center for Children and Families, said the lack of reporting to states is “a big problem.”

“If states don’t know a provider has ripped off the managed-care organization, how can they protect other state programs or insurers from that behavior?” he said.

Last year, ²Ô±ð·ÉÌý went into effect that seek to strengthen fraud-detection efforts in Medicaid managed care. For now, the Trump administration has endorsed those changes.

Last month, the administration said they would monitor state compliance and conduct more audits. 

“With historic growth in Medicaid comes an urgent federal responsibility to ensure sound fiscal stewardship and oversight of the program,” Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said in a statement .

In a May 17 response to the inspector general, Verma cited the Obama administration’s managed-care rules and she agreed with nearly all of the recommendations the inspector general made to help remedy the problems.

In the report, the inspector general’s office examined data from the health plan with the largest Medicaid spending in each of the 38 states with managed care. Inspectors also conducted interviews with officials and insurance companies in five states. Among the findings:

• The 38 plans received $62.2 billion in federal and state money in 2015. That represents about a quarter of the $236 billion Medicaid plans received that year. That figure has grown to nearly last year, or about half of Medicaid spending overall.
• The health insurers identified $57.8 million in overpayments related to fraud or abuse during 2015. Health plans only recovered $12.5 million, or 22 percent, of those overpayments. (Four of the health plans found no such overpayments all year.)
• Insurers performed better on erroneous billing and other overpayments not related to fraud. Health plans collected 68 percent of the $831.4 million they identified in 2015.

Insurance industry officials said health plans take their responsibility to protect the Medicaid program seriously and that the new rules at the federal level should address any shortcomings.

Jeff Myers, chief executive of Medicaid Health Plans of America, an industry trade group, said the problems identified by the inspector general’s office may not reflect health plan performance as much as differing approaches to state oversight and what information was required to be reported in 2015.

“The report suggests that, because there isn’t a massive reporting of cases, managed-care organizations are not adequately protecting the program. I don’t think that’s true,” Myers said. “The other limitation of the study is that most of these issues have in fact been addressed by the Medicaid managed-care rule.”

Myers pushed back on the inspectors’ suggestion that insurers are purposely ignoring wasteful spending in order to boost their own revenue and profits from states.

“States look very seriously at ways to reduce Medicaid spending because every dollar spent on Medicaid is a dollar not spent somewhere else,” Myers said.

Some health-policy experts said the federal report reflects the insurance industry’s resistance to what it perceives as meddling in its private business even though plans are participating in a public program. “This kind of behavior, like not reporting bad actors, is totally consistent with their broader philosophy of ‘It’s my money and let me run my business,’” said Schneider, the former federal official.

Christopher Koller, former Rhode Island health insurance commissioner, said states bear the responsibility to address these problems in their contracts with health plans.

“This is one more example of how state oversight can often be insufficient,” said Koller, president of the Milbank Memorial Fund, a foundation focused on health policy. “States who think they can outsource all of the work to the private-sector ‘experts’ are not serving their citizens well.”

In 2015, the 38 health plans examined by inspectors collectively took 2,668 corrective actions, such as payment suspensions, against providers suspected of fraud or abuse, according to the report.

Eighteen health plans canceled contracts for a total of 179 providers “for cause” in 2015. Three of those insurers said they didn’t typically notify the state of provider terminations.

Now the new Medicaid regulations require insurers to notify states about providers’ terminations and other changes in their status, according to the report.

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The results of Tuesday’s primary have set up general-election contests between candidates — for governor, attorney general, insurance commissioner and some congressional seats — with sharply differing views on government’s role in health care.

The outcome in the Golden State could help shape the fate of the Affordable Care Act and influence whether Republicans in Washington take another shot at dismantling the landmark law.

“For the Affordable Care Act, California is a bellwether state,” said David Blumenthal, president of the Commonwealth Fund, a New York-based health policy research organization. If California voters don’t elect more Democrats to Congress, it will be harder for the party to gain legislative control and “the Affordable Care Act will continue, as it has been, to be under attack from an empowered Republican majority,” he said.

Despite being targeted for voting last year to repeal the ACA and cut Medicaid funding, several Republican incumbents performed well at the polls in California.

“California was supposed to lead the blue wave, but that’s not what we saw” in the primary, said Ivy Cargile, an assistant professor of political science at California State University-Bakersfield.

In the California governor’s race, Democratic front-runner Gavin Newsom quickly sought to cast the November contest as a referendum on Trump and his effort to undo much of President Barack Obama’s legacy, particularly on health care.

endorsing Republican candidate John Cox, a multimillionaire real estate investor, helped propel the political outsider to the general election.

“It looks like voters will have a real choice — between a governor who will stand up to Donald Trump and a foot soldier in his war on California,” Newsom said Tuesday night to supporters in San Francisco.

California has embraced the federal health law enthusiastically and stands to lose more than any other state if the ACA is gutted. About 1.5 million Californians buy coverage through the state’s Obamacare exchange, Covered California, and nearly 4 million have joined Medicaid as a result of the program’s expansion under the law.

Newsom, a former San Francisco mayor and the current lieutenant governor, has the coverage gains made under the ACA. He has vowed to go even further by pursuing a state-run, single-payer system for all Californians.

Newsom won the primary with 33 percent of the vote and Cox placed second with 26 percent. Some mail-in votes and provisional ballots .

Cox has slammed Newsom and fellow Democrats for imposing government controls on health care that he says make coverage too expensive for families. He said he isn’t interested in defending the Affordable Care Act and that, if the law is scrapped, millions of Californians can go into high-risk insurance pools — an idea that predates the health law.

Andrew Busch, a government professor at Claremont McKenna College, said the political divide over health care has grown even wider this year as single-payer has gained support from mainstream Democrats in California.

“I’d say the Republican candidates are pretty much where the Republicans have been, but the Democratic candidates have shifted to the left, so the choice is starker than it has been,” Busch said.

Heading into Tuesday’s primary, it wasn’t clear that California voters would face such drastically different choices on the November ballot. Under the state’s primary system, the top two vote-getters, regardless of party affiliation, advance to the general election. That left many experts predicting single-party matchups across the state.

But that scenario also didn’t pan out in the race for attorney general, a position that has played a key role in California’s resistance politics since Trump was elected. Democratic incumbent Xavier Becerra, who has become a national leader against Trump’s agenda, will face off against Republican Steven Bailey in the fall.

Becerra has filed on health care and other issues since taking office in January 2017.

Bailey, a criminal attorney and former judge, has blamed the Affordable Care Act for driving up health care costs, and he favors less industry regulation. He also has criticized Becerra for fixating too much on Trump.

“Just because a tweet comes out of Washington, it doesn’t require a lawsuit to be filed the next day,” Bailey said.

Health care could also play a role in several of California’s congressional races. Democrats are trying to win back control of the House, in part to better block Republican efforts to roll back the ACA.

“The actions of the Trump administration, the elimination of the individual mandate and its impact on markets will become more of an issue,” said Chris Jennings, a former health care adviser in the Obama administration. “The conservative caucus has been forcefully advocating for another aggressive return to the repeal effort.”

nationally is in a district of California’s San Joaquin Valley where Republican incumbent Jeff Denham drew several Democratic opponents after voting to repeal the health law last year — as did .

Denham led a crowded primary field with 38 percent of the vote Tuesday. Democrat Josh Harder is holding on to second place with nearly 16 percent, just ahead of a Republican challenger. until late-arriving ballots are counted.

Harder said the Republicans’ repeal-and-replace effort on health care was a major reason he decided to run. He made it a centerpiece of his campaign and ran ads criticizing Denham for voting to take away coverage from thousands of his constituents. About 40 percent of residents in this Modesto-area district are enrolled in Medicaid, the government insurance program for the poor and disabled.

Denham has defended his repeal vote, saying that patients’ access to doctors has only gotten worse since coverage was expanded under the ACA. In a statement last year, Denham said, “coverage does not necessarily equal care and families must resort to overflowing emergency rooms to be seen.”

But Dan Schnur, a Republican political strategist who teaches at the University of Southern California and the University of California-Berkeley, said health care has gone from a negative to a positive for Democratic candidates, who have spent the past several elections defending Obamacare.

“As a result, they’re doing everything they can to emphasize the health care debate rather than run away from it,” he said.

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The 51-year-old businessman headed to the emergency room at Sutter Health’s California Pacific Medical Center in San Francisco. Sutter charged $1,555 for the 10 minutes it treated him, including $55 for a gel bandage and $487 for a tetanus shot.

“It was ridiculous,” he said. “Health insurance costs are through the roof because of things like this.”

California Attorney General Xavier Becerra couldn’t agree more. The state’s top cop is suing Sutter, accusing one of the nation’s biggest health systems of systematically overcharging patients and illegally driving out competition in Northern California.

For years, economists and researchers have warned of the dangers posed by large health systems across the country that are gobbling up hospitals, surgery centers and physicians’ offices — enabling them to limit competition and hike prices.

Becerra’s suit amounts to a giant test case with the potential for national repercussions. If California prevails and is able to tame prices at Northern California’s most powerful, dominant health system, regulators and politicians in other states are likely to follow.

“A major court ruling in California could be a deterrent to other hospital systems,” said Ge Bai, an assistant professor at Johns Hopkins University who has researched hospital prices nationwide. “We’re getting to a tipping point where the nation cannot afford these out-of-control prices.”

Reflecting that sense of public desperation, Sutter faces two other major suits — from employers and consumers — which are wending their way through the courts, both alleging anticompetitive conduct and inflated pricing. Meanwhile, California lawmakers are considering a bill that would ban some contracting practices used by large health systems to corner markets.

Sutter, a nonprofit chain, is pushing back hard, denying anticompetitive behavior and accusing Becerra in court papers of a “sweeping and unprecedented effort to intrude into private contracting.” Recognizing the broader implications of the suit, both the American Hospital Association and its California counterpart asked to file amicus briefs in support of Sutter.

In his 49-page , Becerra cited a recent finding that, on average, an inpatient procedure in Northern California costs 70 percent more than one in Southern California. He said there was no justification for that difference and stopped just short of dropping an expletive to make his point.

“This is a big ‘F’ deal,” Becerra declared at his March 30 news conference to unveil the lawsuit. In an interview last week, he said, “We don’t believe it’s fair to allow consolidation to end up artificially driving up prices. … This anticompetitive behavior is not only bad for consumers, it’s bad for the state and for businesses.”

To lessen Sutter’s market power, the state’s lawsuit seeks to force Sutter to negotiate reimbursements separately for each of its hospitals — precluding an “all or nothing” approach — and to bar Sutter employees from sharing the details of those negotiations across its facilities. Becerra said Sutter has required insurers and employers to contract with its facilities systemwide or face “excessively high out-of-network rates.”

Heft In The Marketplace

Overall, Sutter has 24 hospitals, 36 surgery centers and more than 5,500 physicians in its network. The system boasts more than $12 billion in annual revenue and posted net income of $958 million last year.

The company’s heft in the marketplace is one reason why Northern California is the in the country to have a baby, according to a . A cesarean delivery in Sacramento, where Sutter is based, cost $27,067, nearly double what it costs in Los Angeles and New York City.

For years, doctors and consumers have also accused Sutter of cutting hospital beds and critical services in rural communities to maximize revenue. “Patients are the ones getting hurt,” said Dr. Greg Duncan, an orthopedic surgeon and former board member at Sutter Coast Hospital in Crescent City, Calif.

Sutter says patients across Northern California have plenty of providers to choose from and that it has held its average rate increases to health plans to less than 3 percent annually since 2012. It also says it does not require all facilities to be included in every contract — that insurers have excluded parts of its system from their networks.

As for emergency room patients like Frizzell, Sutter says its charges reflect the cost of maintaining services round-the-clock and that for some patients urgent-care centers are a less costly option.

“The California Attorney General’s lawsuit gets the facts wrong,” Sutter said in a statement. “Our integrated network of high-quality doctors and care centers aims to provide better, more efficient care — and has proven to help lower costs.”

Regulators in other states also have sought to block deals they view as potentially harmful.

In North Carolina, for instance, the state’s attorney general and treasurer both expressed concerns about a proposed merger between the University of North Carolina Health Care system and Charlotte-based Atrium Health. The two dropped their bid in March. The combined system would have had roughly $14 billion in revenue and more than 50 hospitals.

Last year, in Illinois, state and federal officials persuaded a judge to block the merger between Advocate Health Care and NorthShore University HealthSystem. The Federal Trade Commission said the new entity would have had 60 percent market share in Chicago’s northern suburbs. Still, Advocate won approval for a new deal with Wisconsin’s Aurora Health Care last month, creating a system with $11 billion in annual revenue.

Antitrust experts say states can deliver a meaningful counterpunch to health care monopolies, but they warn that these cases aren’t easy to win and it could be too little, too late in some markets.

“How do you unscramble the egg?” said Zack Cooper, an assistant professor of economics and health policy at Yale University. “There aren’t a lot of great solutions.”

A Seven-Year Investigation

California authorities took their time sounding the alarm over Sutter — a fact Sutter is now using against the state in court.

The state attorney general’s office, under the leadership of Democrat Kamala Harris, now a U.S. senator, started investigating Sutter seven years ago with a 2011 subpoena, show. Sutter said the investigation appeared to go dormant in March 2015, just as Harris began ramping up her Senate campaign.

Becerra, a Democrat and former member of Congress, was appointed to replace Harris last year, took over the investigation and sued Sutter on March 29. His aggressive action comes as he prepares for a June 5 primary against three opponents.

Sutter faces a separate class-action suit in San Francisco state court, spearheaded by a health plan covering unionized grocery workers and representing more than 2,000 employer-funded health plans. The plaintiffs are seeking to recoup $700 million for alleged overcharges plus damages of $1.4 billion if Sutter is found liable for antitrust violations. Sutter also has been sued in federal court by five consumers who blame the health system for inflating their insurance premiums and copays. The plaintiffs are seeking class-action status.

San Francisco County Superior Court Judge Curtis E.A. Karnow Becerra’s request to consolidate his case with the grocery workers’ suit, which is slated for trial in June 2019.

The judge sanctioned Sutter in November after finding that Sutter was “grossly reckless” in intentionally destroying 192 boxes of evidence that were relevant to antitrust issues. As a result, Karnow said, he will consider issuing jury instructions that are adverse to Sutter.

In a , Sutter chief executive Sarah Krevans said she deeply regretted the situation but “mistakes do happen.”

In an April 27 , Sutter’s lawyers criticized the state for piggybacking onto the grocery workers’ case. “The government sat on its hands for seven years, exposing the public to the alleged anticompetitive conduct. … Rather than driving the agenda, the Attorney General seeks to ride coattails.”

Outside court, California legislators are taking aim at “all or nothing” contracting terms used by Sutter and other hospital chains. The proposed law stalled last year amid opposition from the hospital industry. But consumer and labor groups are seeking to revive it this year.

In the meantime, Frizzell said he will probably wind up at one of Sutter’s hospitals again despite his disgust over his ER bill. “Most of the hospitals here are Sutter,” he said. “It’s difficult to avoid them.”

KHN senior correspondent Anna Gorman contributed to this report.

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