San Francisco's cutting-edge universal health care program continues to be roundly applauded for its goal of ensuring all city residents have medical care - but the way employers are paying for it, or sometimes not paying for it, remains a major controversy at City Hall.

At Supervisor David Campos' urging, the Board of Supervisors is expected to hold a hearing this month or next on businesses, primarily restaurants, that levy a surcharge on customers' bills to pay for Healthy San Francisco, but pocket some of the money themselves. Campos has asked that the district attorney investigate the surcharges on the grounds they may amount to consumer fraud.

Campos is also concerned about businesses of all kinds that create health reimbursement accounts as a way to comply with the city mandate but are tight-fisted in actually spending the money on their employees' health care.

"We in San Francisco have been proud to be the first city to have universal health care," Campos said. "But it's hurting the vast majority of businesses that are actually playing by the rules and following the letter and spirit of the law if they have to compete with businesses that are not doing that."

But Rob Black, executive director of the Golden Gate Restaurant Association, said Campos, who is up for re-election in November, is relying on old or faulty data to make his case.

Black believes changes to the employer mandate approved by the board and mayor late last year are working - and that Campos is basing his concern on data produced before the changes were made.

"He's either misrepresenting it or he has no clue what he's talking about," Black said.

At issue is Healthy San Francisco, the first program of its kind in the country, which debuted five years ago. Any uninsured adult living in the city who doesn't qualify for coverage under Medicare or Medi-Cal can participate - regardless of their immigration status, pre-existing medical conditions or whether they're employed. Currently, 47,285 participants are treated at 37 locations.

The overarching idea was always popular in liberal San Francisco, but the restaurant association sued the city over the mandate that employers provide health care, either through private benefits, paying into Healthy San Francisco or creating their own health reimbursement accounts. The city prevailed in court.

In November, Mayor Ed Lee signed legislation intended to close a loophole in the way employers could set up the reimbursement accounts. Previously, employers could take back any unused money at the end of every year. In 2010, 860 employers put a total of $62.5 million into the accounts and re-pocketed all but $12.4 million.

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Restaurants deny Healthy S.F. needs fix