- The biggest air ambulance companies have the most to lose should a balance billing ban working its way through Congress become federal law, a new report by S&P Global says.
- According to the report, the companies most at financial risk are Colorado-based Air Methods Corp. and Global Medical Response, both of which derive a large portion of their profits from out-of-network charges. S&P Global says both companies would suffer impaired credit ratings if the current version of a bill currently being debated is passed. The two companies have projected combined 2019 revenues of $5.2 billion and "stable" ratings from S&P, although the ratings firm considers Global Medical Response the stronger of the two companies.
- The report noted that the proposed legislation "has strong tailwinds" given strong public interest in addressing the issue, as well as bipartisan support in Congress.
S&P Global's report comes after a Senate committee introduced a bill that takes aim at surprise billing and includes air ambulances after early drafts excluded the aircraft from regulation.
Many Americans each year are exposed to balance billing — being charged by providers in excess of what their insurer allows or covers. It can occur during an emergency room visit, or when a patient is unknowingly put under for surgery by an out-of-network anesthesiologist. These bills often amount to tens of thousands of dollars.
But the potential financial burden placed on patients who need emergency medical transport by air can be significant. That has led to the introduction in the Senate of the Lower Health Care Costs Act, which would ban balance billing in many areas of healthcare, including for air ambulance services. S&P Global expects the bill to reach the Senate floor this month.
The legislation would essentially cap out-of-network rates. First, it would bar air ambulances from sending a balance bill to patients and would allow insurers to pay out-of-network air ambulance providers the median in-network amount, which is based on other negotiated contracts in a given area.
S&P said the surprise billing bans would be the most severe on the air transport industry given the frequency of out-of-network rides, coupled with the high usage of unprofitable transports by Medicare and Medicaid patients.
According to a March report by the Government Accountability Office, the median price for a fixed-wing aircraft emergency medical transport in 2017 was $40,600 and $36,400 for helicopter transport — up 60% since 2012. And 69% of air ambulance transports in 2017 were out-of-network.
"The emergency nature of most air ambulance transports, as well as their relative rarity and high prices charged, reduces the incentives of both air ambulance providers and insurers to enter into contracts with agreed-upon payment rates," the GAO report noted.
GAO also analyzed air ambulance balance billing complaints in two states, Maryland and North Dakota. Only one balance bill in the group was for less than $10,000. Some topped $50,000 and even $60,000.
Another study published last week by Health Affairs concluded that recent charges to Medicare for air ambulance services were 4.1 to 9.5 times higher than what they were in 2016.
The S&P Global report expects "insurance companies will gain negotiating power in setting in-network rates" if a bill is signed into law. However, it expects the bill will likely be tweaked significantly before a final version is voted on by both chambers of Congress.
The balance billing ban being debated in Congress has raised concerns among major air ambulance providers. Both Air Methods and Global Medical Response prominently feature balance billing-related stories on their corporate websites.
While Global Medical Response has mostly restricted its coverage to its "Newsroom" section, Air Methods has taken a more aggressive approach. Its home page features a story about Karen Epsinosa, a Florida resident who suffered a stroke in 2017 and required emergency air transport. The Air Methods article celebrated the fact that Espinosa’s husband worked for six months with one of its employees to convince their insurer to pay the entire air ambulance bill.