Air ambulance rides are literal lifesavers. But how much should they cost?
In the ongoing, crowdsourced 鈥淏ill of the Month鈥 investigation, Kaiser Health News and NPR 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 is not part of a patient鈥檚 insurance network, the operator can charge the patient for the portion of the bill the insurance company won鈥檛 cover 鈥 meaning the patient is on the hook for the undiscounted rate that the air carrier decides to charge.
鈥淭here鈥檚 nothing really they can turn to because of this regulatory blind spot, essentially, that air ambulances fall into,鈥 said Erin Fuse Brown, an who specializes in health care billing. 鈥淭here鈥檚 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.鈥
This happens because the federal government treats air ambulance companies more like air carriers 鈥 like Southwest or American Airlines 鈥 than like hospitals or clinics. They are regulated by the Federal Aviation Administration. By law, states cannot set rules for them. That has meant they haven鈥檛 been required to participate in insurance networks, their prices are not capped, and they can charge patients the balance of the bills even after insurance has paid.
Air Methods’ helicopter in Pocola, Okla. The company owns five other Oklahoma bases under the Tulsa Life Flight brand that it bought in 2009.(Jackie Fortier/StateImpact Oklahoma)
Congress now is hashing out its FAA reauthorization bill. 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 that is expected to pass.
Some consumer protections remain in the . An aviation consumer advocate with the Department of Transportation would be responsible for handling patient complaints and could pursue enforcement or 鈥渃orrective action鈥 against unfair or deceptive practices, including air ambulance operators.
The Deregulation Game
Air ambulances were in their infancy when air travel was in the 1970s. Since then, the air ambulance sector has had little oversight, especially of 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鈥檚 notice, Greg Hildenbrand, executive director of Life Star of Kansas, a nonprofit air ambulance service and secretary of the , said increased competition has driven prices up, instead of down.
鈥淭he 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,鈥 he said.
The Federal Aviation Administration currently regulates all aspects of air ambulances, including the required onboard instruments.(Jackie Fortier/StateImpact Oklahoma)
The rise in price is dramatic. Take Air Methods, the nation鈥檚 largest air ambulance company, 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 .
Because air ambulance providers accept much lower reimbursement rates from Medicare and Medicaid patients 鈥 and may not receive any payment from uninsured patients 鈥 the impact of these rate hikes has fallen almost entirely on private health care insurers and their members.
Hildenbrand, a 20-year veteran of the industry, said insurance companies are fed up.
鈥淚 think we鈥檝e reached a tipping point in the industry where insurance companies are saying, 鈥楴o, we鈥檙e not going to continue to pay these rates,鈥 and so then patients get balance-billed $40,000 or something after their insurance has paid. I don鈥檛 think it鈥檚 a sustainable system,鈥 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鈥檛 pay, the patient is on the hook.
The air ambulance can hold just four people: a pilot, a patient, a nurse and an EMT.(Jackie Fortier/StateImpact Oklahoma)
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鈥檚 a step in the right direction, said Fuse Brown of Georgia State University, but the regulatory council might not go far enough.
鈥淭he task of the committee would be to come up with additional consumer protections that haven鈥檛 been specified in the bill,鈥 she said. 鈥淚t鈥檚 unclear at this point whether the committee would come up with protections that would substantively provide consumer protections.鈥
This story is part of a reporting partnership between , and Kaiser Health News.
