Will Congress Bring Sky-High Air Ambulance Bills Down To Earth?

Sep 26, 2018
Originally published on September 26, 2018 1:43 pm

Air ambulance rides can be lifesavers. But how much should they cost?

In the ongoing, crowdsourced "Bill of the Month" investigation, NPR and Kaiser Health News have received more than a dozen bills from people around the country on the hook for medevac helicopter rides that ranged from $28,000 to $97,000.

What gives? Why should a lifesaving flight come with a life-altering bill?

If an air ambulance service isn't part of a patient's insurance network, the operator can charge patients for the portion of the bill the insurance company won't cover. That leaves a patient on the hook for the undiscounted rate the air carrier decides to charge.

"There's nothing really they can turn to because of this regulatory blind spot, essentially, that air ambulances fall into," said Erin Fuse Brown, an associate professor of law at Georgia State University who specializes in health care billing. "There's nothing that would protect them, that would allow them to push back on the extraordinary charges that they are billed when they get home from the hospital."

This situation happens because the federal government treats air ambulance companies as air carriers, like Southwest or American Airlines. They are regulated by the Federal Aviation Administration. By law, states cannot set rules for them. That has meant they haven't been required to participate in insurance networks, their prices aren't capped and they can charge patients the balance of the bills, even after insurance has paid.

Congress is hashing out legislation to reauthorize funding for the FAA. The House passed an earlier version of the bill in May that would have allowed states to regulate air ambulances, including pricing and some billing practices. That provision was dropped from a House-Senate compromise bill that is expected to pass.

Some consumer protections remain in the new legislation. An aviation consumer advocate with the Department of Transportation would be responsible for handling patient complaints and could pursue enforcement or "corrective action" against unfair or deceptive practices, including air ambulance operators.

Air ambulances were in their infancy when air travel was deregulated in the 1970s. Since then, the air ambulance sector has had little oversight, especially on the positioning of bases. That has led to vast deserts of coverage and other areas, like on the Oklahoma border, with a saturated market and multiple carriers.

With no cap on pricing and high fixed costs, such as helicopters and trained personnel ready to fly at a moment's notice, increased competition has driven prices up, instead of down, said Greg Hildenbrand, executive director of Life Star of Kansas, a nonprofit air ambulance service and secretary of the Association of Critical Care Transport.

"The numbers of patients per helicopter has dropped, but we still have to spread the same costs per base over fewer numbers of patients, and so that has driven costs up considerably," he said.

The rise in price is dramatic. Take Air Methods, one of the largest air ambulance companies in the nation, whose pricing greatly influences the market. Its average helicopter transport costs increased from $13,000 in 2007 to $49,800 in 2016, according to a Government Accountability Office report.

Because air ambulance providers accept much lower reimbursement rates from Medicare and Medicaid patients — and may not receive any payment from uninsured patients — the impact of these rate hikes has fallen almost entirely on private health care insurers and the people they cover.

Hildenbrand, a 20-year veteran of the industry, said insurance companies are fed up.

"I think we've reached a tipping point in the industry where insurance companies are saying, 'No, we're not going to continue to pay these rates,' and so then patients get balance-billed $40,000 or something after their insurance has paid. I don't think it's a sustainable system," he said.

As billed charges have soared, more insurers have started limiting their reimbursements to air medical providers. Air Methods has responded by hiring patient advocates who go through the appeals process with the insurance company. Ultimately, if the insurance company won't pay, the patient is on the hook.

The House-Senate compromise bill would also set up a council of industry representatives, led by the Department of Transportation, which oversees air ambulances. The group would include air ambulance providers and insurance company representatives, among others, and would write and re-evaluate consumer protections, including balance-billing practices. The legislation also establishes a complaint hotline for patients, similar to one available for commercial airline passengers.

It's a step in the right direction, said Fuse Brown of Georgia State University, but the regulatory council might not go far enough.

"The task of the committee would be to come up with additional consumer protections that haven't been specified in the bill," she said. "It's unclear at this point whether the committee would come up with protections that would substantively provide consumer protections."

This story is part of a collaboration of NPR, Kaiser Health News and StateImpact Oklahoma, a reporting project of NPR-affiliated public radio stations.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.

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Using a so-called air ambulance can be expensive, which is why such flights are usually only used by the critically ill. But a legal quirk means that paying for one of these flights can actually lead to financial ruin. Congress has been working on this. But in the meantime, NPR and Kaiser Health News have been asking patients to send in medical bills. Here's Jackie Fortier of StateImpact Oklahoma.

JACKIE FORTIER, BYLINE: Pilot Chris Glasgow flicks metal switches above his head in the cockpit of an air ambulance in Pocola, Okla.

Now we're over Fort Smith, Ark., and that took - what? Maybe four minutes?

CHRIS GLASGOW: If that. I was going kind of slow.

FORTIER: If I had been a patient, that flight could've been a lifesaver, but it could also come with a life-altering price tag. There is no cap on pricing for air ambulance rides, and the bills are often tens of thousands of dollars. Doug Flanders is the manager of government affairs for Air Methods, a private company that owns the Pocola helicopter and base, along with about 2/3 of all the air ambulances in the U.S. Flanders' company fought a proposal that would have let states restrict pricing for air ambulances.

DOUG FLANDERS: What some people called just a little provision could have large impacts to patients all over the country.

FORTIER: Air ambulance companies are considered air carriers, like Southwest or American Airlines. All are regulated by the Federal Aviation Administration. That's kept states from regulating the industry. Flanders says an earlier version of the FAA funding bill would've have led to a patchwork of regulations.

FLANDERS: What if the state of Arkansas decides that it will only accept Arkansas helicopters? Those are life-and-death decisions. Borders should not make a difference, but this kind of legislation that creates borders in the sky would do that.

FORTIER: The for-profit industry lobbied heavily against it and won. Congress dropped plans to let states regulate prices in the current FAA funding bill. Airline deregulation passed in the 1970s left the air ambulance sector with little oversight. Greg Hillenbrand runs a nonprofit air ambulance service in Kansas. He says with high fixed costs like helicopters and trained medical personnel ready to fly at a moment's notice, more competition in the industry has driven prices up, not down.

GREG HILDENBRAND: We still have to spread the same costs per base over fewer numbers of patients, and so that has driven costs up considerably.

FORTIER: The average air ambulance bill sent to NPR and Kaiser Health News was for more than $40,000. If a patient's insurance won't cover the whole flight bill, air ambulance companies are allowed to directly bill the patient. It's called balance billing, and says Erin Fuse Brown, an associate law professor at Georgia State University, there are no legal options.

ERIN FUSE BROWN: There's nothing really they can turn to because of this regulatory blind spot, essentially, that air ambulance providers fall into that would protect them, that would allow them to push back on the extraordinary charges that they are billed when they get home from the hospital.

FORTIER: The bipartisan legislation calls for a Consumer Protection Committee that will be formed. But Erin Fuse Brown says...

BROWN: It's unclear at this point, you know, whether the committee would substantively provide consumers with protection from these types of bills.

FORTIER: The House is expected to vote on the FAA funding bill as early as today, and the Senate could act before the end of the week.

For NPR News, I'm Jackie Fortier in Norman, Okla. Transcript provided by NPR, Copyright NPR.