Commercial, Public Service

Air Ambulance Providers Argue Against Senate Bill

By Frank Wolfe | July 9, 2019
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A Bell 206L air ambulance helicopter in service with Missouri-based Air Evac Lifeteam.

The air ambulance business in the United States hangs precariously, as 32 air medical transport bases have closed this year alone, and recently introduced U.S. Senate legislation, if it becomes law, would make the matter worse, according to the Association of Air Medical Services (AAMS).

On June 19, Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tennessee, introduced S. 1895, the Lower Health Care Costs Act, which the committee passed on June 26.


Section 105 of the measure — "Ending Surprise Air Ambulance Bills" — provides that "a group health plan or health insurance issuer shall pay for air ambulance services ... at the median in-network" rate, but Seth Myers, president of Missouri-based Air Evac Lifeteam and a former flight nurse, said "paying a median in-network rate can't even be determined in many states," as "there aren't any in-network providers for such services" or the insurers "are not negotiating in good faith."

S. 1895 has "no incentive for insurance companies to contract with air ambulance companies," Myers said. The bill also allows unspecified state authorities to set such median in-network rates, if they cannot be determined — a provision that would have unintended negative consequences, he said.

"If a group health plan or health insurance issuer offering group or individual health insurance coverage does not have sufficient information to calculate a median in-network rate for this service or provider type, or amount of, claims for services (as determined by the applicable state authority, in the case of health insurance coverage, or by the Secretary of Labor, in the case of a self-insured group health plan) covered under the list of out-of-network services set by the state authority or Secretary of Labor, as applicable, in a particular geographic area, such plan or issuer shall demonstrate that it will use a database free of conflicts of interest that has sufficient information reflecting allowed amounts paid to individual health care providers for relevant services provided in the applicable geographic region, and that such plan or issuer will use that database to determine a median in-network rate," according to Section 105 of the legislation.

Rick Sherlock, the CEO of AAMS, said on July 9 that the closure of rural hospitals "would accelerate rapidly," if the bill is enacted.

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 (GAO), 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 industry, which often provides life-saving care in rural areas.

Medicare and Medicaid and uninsured patients account for about 70 percent of air ambulance flights, while another 30 percent fall under some commercial insurance arrangement. But Medicare only covers about 60 percent of the $10,200 average air medical transport cost, while Medicaid only covers 34 percent, according to AAMS. That situation has led to instances of exorbitant, 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 — an amount that takes into account the significant deficits in Medicare and Medicaid payments to air ambulance providers — and the insurer's coverage for those services. Often the air ambulance provider is "out-of-network" for the given air ambulance patient, and the fees can be in the tens of thousands of dollars.

A GAO report earlier this year, Air Ambulance: Available Data Show Privately-Insured Patients Are At Financial Risk, reported that 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.

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

But air ambulance providers say that such amounts are on the "explanation of benefits" and are not bills and that they have been able to work with insurers and patients to reduce "balance billing" in some states, such as Wyoming where the average "balance bill" is $600. The notion that air ambulance providers "are collecting $30,000 to $50,000 [per patient] is just not founded," Myers 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 has 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 Emergency Air Medical Services."

Sherlock said that the advisory committee should finish its work before Congress passes legislation.

Several large Blue Cross/Blue Shield plans have refused to discuss the possibility of entering into in-network agreements, and "the [congressional] committees must consider that both commercial insurers and providers play a role in developing these in-network agreements," according to AAMS.

Physicians and first responders, not air ambulance providers, decide when helicopter emergency medical services are necessary, the association said.

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