Air Ambulance Providers Seek Improved Federal Payment System

By Frank Wolfe | April 5, 2019
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An MD 902 Explorer Helicopter in service with the London Air Ambulance Charity

Dozens of rural hospitals in the United States out of the 2,400 existing in 2013 closed in the following four years, according to the Government Accountability Office, and air ambulance providers are pushing the federal government to improve the federal payment system under Medicare and Medicaid in order to sustain the emergency air medical services (EAMS) industry, which often provides life-saving care in rural areas.

"As hospitals continue to close throughout the United States, especially in rural areas, EAMS providers are often the only link for critically injured or ill Americans to obtain timely treatment and transportation to definitive healthcare facilities (e.g., Level I and II trauma centers, stroke treatment centers, et alia) during the 'Golden Hour' when those highly effective medical interventions can make a significant difference in the patients’ outcomes," the Association of Air Medical Services (AAMS) said on Apr. 4.


"The air medical industry dramatically improves access to Level 1 and 2 trauma centers for over 120 million Americans who would not be able to receive emergent care in a timely manner otherwise," according to the association. "Over 90 percent of air medical flights are for treating trauma, cardiac, and stroke; those conditions that must be treated at advanced medical facilities. The use of emergency air medical services has become an essential component of the healthcare system."

While the median cost for air ambulance companies to provide transport was $10,199 per flight in 2017, AAMS reported that reimbursement rates from Medicaid and Medicare--the latter rates set in 2002 and based on 1996 cost data--represent a "gross underpayment," as Medicaid covered just $3,463 on average, and Medicare covered $5,998.

"AAMS estimates that in 2017, nearly 40 percent of all EAMS patients transported by helicopter are covered by Medicare," the organization said. "The growth in the volume of Medicare covered transports combined with inadequate Medicare payment rates places EAMS suppliers and providers in financial jeopardy."

In 2017 and 2018, Congress did not act on bipartisan legislation that would have raised Medicare payment rates, the Ensuring Access to Air Ambulance Services Act of 2017, H.R. 3378 and S. 2121.

AAMS issued its call in response to a GAO report last month, Air Ambulance: Available Data Show Privately-Insured Patients Are At Financial Risk, which studied air ambulance billing in six states, Florida, Maryland, Montana, North Dakota, New Mexico, and Texas.

The GAO study found that so-called "balance billing" in which privately-insured patients receive a bill from their health care provider for the difference between the amount charged for air ambulance services and the insurer's coverage for those services can be in the tens of thousands of dollars, often because the air ambulance provider is "out-of-network" for the given air ambulance patient.

In 2012, 75 percent of 13,087 air ambulance transports of privately-insured patients were out-of-network, while 69 percent of 20,726 air ambulance transports of such patients were out-of-network in 2017, according to the GAO.

The GAO said that one consumer in North Dakota reported receiving a balance bill of about $34,700 for an air ambulance transport from Dickinson, North Dakota, to Bismarck, North Dakota, in November 2017.

That year, the median price charged by air ambulance providers in the United States for a helicopter transport was $36,400, an increase of 60 percent from 2012, according to GAO.

GAO noted that one state, Maryland, has increased public awareness, which "has generated public pressure on air ambulance providers and insurers to encourage the two sides to negotiate contracts."

In 2015, the Maryland Insurance Administration convened a public meeting of patient, air ambulance, hospitals, and insurers, and the resulting public pressure around the "balance billing" problem led to one of the large air ambulance providers securing a contract with a large insurer in that state, the GAO said.

The FAA Reauthorization Act of 2018, P.L. 115-254, directed the Secretary of Transportation to form an Advisory Committee for Transparency in the Air Ambulance Industry, in part to recommend steps that states should take to protect consumers, and AAMS said that it "supports the establishment of the advisory committee and looks forward to working with its members to develop solutions that protect patients and preserve access to EAMS."

AAMS also said that the GAO study does not present a comprehensive picture, as the report only considered a half dozen states.

"We agree with the GAO’s conclusion that greater acceptance of in-network contracts between EAMS providers and private insurance companies could decrease the impact of balance billing on the commercially insured population," AAMS said. "We note that one of the largest EAMS operations in the United States increased their network participation from 2 percent to 30 percent in 2018 alone. Unfortunately, not all commercial insurers are as willing to offer and enter into reasonable in-network contracts. AAMS members have reported that several large Blue Cross/Blue Shield plans have refused to discuss the possibility of entering into in-network agreements. The [congressional] committees must consider that both commercial insurers and providers play a role in developing these in-network agreements."

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