Restraining Balance Billing by Air Ambulance Providers: CHIR Keeps Up with Federal Advisory Committee and Regulatory Actions

By Madeline O’Brien and JoAnn Volk

Air ambulances have traditionally been a major source of surprise out-of-network medical bills. With the median price for a rotary-wing air ambulance ride clocking in at nearly $36,000 and over 70 percent of commercially insured ambulance rides classified as out-of-network,  these bills can place a large financial burden on consumers, particularly in rural areas. And this burden is becoming higher, thanks to a growing trend toward private-equity-backed air ambulance providers with a deliberate business strategy to stay out-of-network and charge exorbitant prices.

The No Surprises Act (NSA), adopted in December 2020, prohibits balance billing for patients who receive non-emergency services at in-network facilities and for emergency care, including air ambulance services. Before the comprehensive protections of the NSA were adopted, Congress established an advisory committee on air ambulances, the Air Ambulance and Patient Billing Advisory Committee (committee) as part of the Federal Aviation Administration (FAA) Reauthorization Act in 2018. The committee was charged with “reviewing options to improve the disclosure of charges and fees for air medical services, better inform consumers of insurance options for such services, and protect consumers from balance billing.”

With an interim final rule (IFR) issued this month and another proposed federal rule expected soon detailing the NSA’s ban on surprise bills for air ambulance transport and other providers, we decided to take a look at where the committee’s work lines up with the NSA protections and reporting requirements that take effect in January.

The Air Ambulance Committee 

During the committee’s first meeting, convened by the U.S. Department of Transportation (DOT) in January 2020, three subcommittees were established to produce recommendations tailored to the specific subjects set out in the FAA Reauthorization Act: preventing balance bills; improving disclosure of charges and coverage of air ambulance services; and making recommendations on actions states and the DOT can take to improve transparency for consumers.

The committee met again in May to discuss the NSA and other topics. The committee hasn’t yet posted the recommendations developed at the May meeting, but a few key themes emerged from the discussion. One is how to define “medical necessity.” It was noted that, while emergency services are considered essential health benefits under the Affordable Care Act, states determine what specific services fall under this category and insurers can interpret what is medically necessary. A second theme is the importance of data and subsequent analysis, to understand the impact of the NSA on cost, quality and the financial health of the air ambulance providers and consumers. A third was how to calculate the initial payment for air ambulance providers during the Independent Dispute Resolution (IDR) process. Lastly, the committee identified the need to re-examine the Airline Deregulation Act (ADA) as it applies to air ambulance services. The committee will reconvene on August 11, 2021 to discuss the impact of the ADA on states level air ambulance regulation and determine whether to recommend amendment to the ADA as a means of improving the regulation of air ambulance providers.

NSA Air Ambulance Provisions

The NSA IFR takes up the issues discussed at the May meeting: It requires the prudent layperson standard for determining medical necessity for emergency services and prohibiting denials based on final diagnosis; requires data collection and reporting on cost, use, type of aircraft and the incidence of out-of-network use; and it defines the “qualifying payment amount” that determines patient cost-sharing. The proposed rule on air ambulances due out soon is expected to provide additional guidance on the NSA’s data reporting requirements.

Looking Ahead

Recommendations provided by the Committee will be used by the Secretary of Transportation to inform the department’s strategy for oversight of air ambulance providers, as well as guidance concerning unfair and deceptive provider practices. The committee’s work may not stop there, though. The multi-stakeholder membership may also serve as a sounding board for implementation issues and the new law’s effects on networks, contract negotiations, access, and costs.


1 Comment

  • Bob Hertz says:

    Thanks for the reporting.

    Seems to me that all the committee discussions are avoiding the obvious solution — which is to federalize and nationalize the entire operation. Air ambulance companies would get an annual stipend from the federal government and charge virtually nothing to patients. (perhaps $500, to prevent wasteful overuse of the service.)

    Actually the same should be done for ground ambulance services. Make them public utilities, like the fire and police departments.

    The overall cost of all this would be 14-18 billion a year, which is a speed bump if that in federal health spending.

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