Rising frustration with surprise bills for out-of-network air medical services is putting pressure on lawmakers to intervene.
A Texas woman waiting in a Florida airport for a flight home suddenly doubled over with stomach pains. Medical personnel rushed her from the airport to an area hospital. After stabilizing her, the hospital arranged for the woman to be transported by air ambulance to Texas for follow-up surgery.
That’s when the financial trauma began. Unbeknownst to her, the air ambulance company that flew the woman from Miami to Dallas was not part of her Blue Cross and Blue Shield network. The air carrier billed her $300,000 for the 1,100-mile flight, plus an additional $15,000 base fee.
This scenario is common because many air ambulance companies don’t contract with insurers for in-network rates. Rising frustration with sky-high surprise bills is putting pressure on lawmakers to intervene, but federal law makes it difficult for states to regulate the air medical industry.
In many cases air ambulances are transporting patients in an emergency – those patients have little choice which air ambulance service gets them as quickly as possible to the care they need.
Bills for air transportation typically run into the tens of thousands of dollars. These bills can be financially devastating for consumers and their families, who are already often dealing with catastrophic events and significant health care needs.
People with insurance are often “balance-billed” for any amount their plan doesn’t cover. That’s because most air ambulance services that aren’t run by hospitals don’t contract with insurers. Insurers complain that private air ambulance companies will not negotiate in good faith or explain their rates. Air ambulance companies say insurers are making low “take-it-or-leave-it” contract offers.
Insurers looking to curb air ambulance costs are now focusing on the costs associated with non-emergency cases. A patient might need air transportation to be moved a long distance, or when ground transportation isn’t available or could compromise patient care.
Hospitals scheduling these outbound flights often contact the same air ambulance companies that bring in emergency patients.
The Blue Cross and Blue Shield plans in Illinois and Texas recently signed an agreement with an independent company to arrange in-network air ambulance transportation for members when medically necessary. If notified that a hospital has scheduled an out-of-network air service for a member, the company will contact the patient, family or facility to encourage an in-network option and avoid subjecting the member to unnecessary charges.
In 1978 Congress barred states from regulating airline prices and routes as part of a law intended to spur competition in the industry. That law has made it hard for state governments to pass laws that protect consumers from getting stuck with exorbitant bills for air medical services.
This summer, however, Montana passed a bill requiring health insurers and air ambulance companies to negotiate settlements of air ambulance bills. Under the law, patients would only be responsible for their copays and deductibles.
In the wake of the Montana legislation, Blue Cross and Blue Shield of Montana was able to negotiate a contract with a major air ambulance company based out of Oregon to cover southwestern Montana, including services in Helena and Bozeman. The insurer has agreements with other air transport companies for coverage in the rest of the state.
States are also pushing for federal legislation to give states more leeway to regulate the air ambulance industry.
Every year, an estimated 550,000 patients in the U.S. are transported by air ambulance, according to a consumer alert issued by the National Association of Insurance Commissioners. The agency reported that the average air ambulance trip is 52 miles and costs from $12,000 to $25,000 per flight.
Air ambulance is a seller’s market, because the need for air ambulance services will always be there. By focusing efforts on non-emergency transport, insurers are working to reduce those costs for their members while waiting for tighter regulation of the industry.