Most air ambulance services are out-of-network, making them too pricey for most consumers, a new study by authors at Georgia State and Wake Forest law schools, the Brookings Institution and the University of Southern California found.
The report, which analyzed insurance claims data from Aetna, Human and UnitedHealthcare collected by the insurer-backed Health Care Cost Institute, found more than 75% of patients transported by air ambulance with commercial insurance did not have coverage for the transport. Forty percent faced a balance bill nearing $20,000. Even in-network charges are pricey, averaging about 3.6 times Medicare rates.
Although some state regulators have taken small steps toward curbing high air ambulance bills, the study’s authors said the federal government needs to intervene to ameliorate the issue.
In February, North Dakota Insurance Commissioner Jon Godfread took the unusual step of issuing a cease-and-desist order against AirMedCare Network for selling air ambulance subscriptions, which he said not only violated state law, but was “counterintuitive to health insurance.”
That’s because just one of nine air ambulance providers in North Dakota was affiliated with AirMedCare. And since the state’s largest health insurer Blue Cross Blue Shield of North Dakota contracted with another firm, it was essentially a useless product for both the insured or uninsured. And residents can still be balance-billed for air ambulance transports.
Despite containing less than one-quarter of 1% of the U.S. population, North Dakota could be a stand-in for the entire nation, according to data published in the Milbank Quarterly. It found the vast majority of Americans transported by air ambulances aren’t properly insured for it, even if they have commercial insurance coverage, and they face huge bills.
The new study found 77% of more than 36,300 air ambulance transport claims from 2014 and 2017 were out-of-network, although just half the time insurers will cover an out-of-network claim in full. Yet only 39% of all claims were paid in full during that period, a number that was steadily trending downward (it was just 31% in 2017).
Meanwhile, charges for air ambulance transports grew steadily over the four-year study period. The median charge for in-network claims grew from $24,938 in 2014 to $32,708 in 2017. For out-of-network charges, it grew from $31,974 in 2014 to $41,230.
The study noted that air ambulance services have been able to use the Airline Deregulation Act of 1978 to avoid being closely regulated by states, even though their business barely existed at the time. Moreover, the Trump administration recently rejected a bid by Wyoming to expand its Medicaid program to better control the cost of air ambulance transports.
As a result, authors recommended any federal surprise medical bill legislation should also be crafted to address air ambulance services, which some versions have included.
But federal legislation seems unlikely in the near term, given the COVID-19 pandemic and the looming presidential election. Despite momentum in Congress at the end of last year to ban surprise billing, the efforts stalled as hospitals and insurers squabbled over arbitration versus rate setting remedies.