Guest Author
Recently the Florida Association of Health Plans, Inc. (FAHP) joined with consumer advocates to eliminate the practice of balance billing — which far too often overwhelmed Florida families with surprise medical bills above their insurance coverage after they or a loved one were in a catastrophic accident. Thanks to the Florida Legislature’s recognition that this practice was financially ruinous and overly burdensome on Florida families, a law was passed in 2016 that effectively eliminated balance billing for most medical bills.
Ambulance transportation, however, was not included in the balance billing prohibition because of claims from ambulance companies, as well as government-run ambulance departments, that they need to bill patients in excess of what insurance covers in order to fund expensive emergency-response services on a 24-hour basis. The ambulance companies or government-run ambulance departments also claim the full cost of an ambulance trip doesn’t amount to a level that would financially devastate families. While this may be arguable with ground ambulance services, considering the average trip is billed at $1,000-$2,000, air ambulance trips are clearly billing patients at levels that are unaffordable to even the most affluent patients. For example, recently the 11th Circuit Court of Appeals ruled that a family, whose child was killed in a car accident, must pay a balance bill of more than $17,000 to an air ambulance company – after the family’s insurer reimbursed the company, Air Methods Corp., almost $16,000 for the trip to the hospital.
The reason? The court ruled the amount the insurer paid is pre-empted by the federal Airline Deregulation Act and the patient is liable for whatever amount of money the air ambulance decides to bill the patient for the service above what the insurer paid.
The underlying issue is air ambulance companies are using a federal act designed for commercial airlines as a cover to bill patients whatever amount they see fit. Air ambulance companies don’t just set a price based on actual cost and a profit for a one-time air ambulance trip to a hospital as you would expect; but, instead, they are able to base their pricing on the cost to have emergency transportation available 24-hours-a-day, rather than the actual cost incurred by the patient. Considering the patient is not in a position to ask what the charge will be before being transported, the size of the bill may be based on whether the air ambulance has a large volume of trips or whether the air ambulance company has a small volume of trips resulting in enormous bills to the few patients.
You may ask why this type of pricing occurs, and the answer is with no market forces to encourage efficiencies, there are no incentives for air ambulance companies to look at minimizing costs needed to operate 24-hour air ambulance services. FAHP thinks it is time to challenge the pricing models air ambulances currently use; otherwise, air ambulances will not attempt to find ways to lower costs, because the patient is on the hook for whatever amount is billed. Without a market force pushing back on unreasonable prices, air ambulance companies will continue to send enormous bills in excess of the cost of the actual transportation, and Florida families will continue to suffer under the weight of air ambulance bills.
While, Florida’s health plans, with the assistance of Representative MaryLynn Magar (chair of the Florida House Health Innovation Subcommittee), have participated in roundtable discussions with air ambulance companies, aimed at coming to pricing agreements that would limit or eliminate this balance-billing practice, these discussions to date haven’t led to lower charges to patients in Florida by air ambulances.
If air ambulance companies are not willing to come to the table to stymie the burden of air ambulance transportation fees on Florida families and, instead, continue to run to court and hide behind a federal act designed for commercial airlines, FAHP urges the Florida Legislature to look again at ways to disallow air ambulances from balance billing that are not pre-empted or prohibited by the Airline Deregulation Act.
It is our sincere belief that no family should have to face astronomic medical bills following a catastrophic or life-altering accident, and FAHP is committed to championing the end of the practice of balance billing once and for all.
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Audrey Brown is president and CEO of the Florida Association of Health Plans, Inc.
One comment
Paul Webster
June 6, 2018 at 12:15 pm
Since I personally attended the roundtable discussion hosted by Chairwoman Magar about which Audrey Brown refers, I want to clarify some facts. Air Methods, an air medical service provider, has been at the table with insurance companies in Florida for years, attempting to negotiate fair in-network contracts. Unlike other states where we have network contracts, insurance companies in Florida have been unwilling to agree to pay sustainable rates. The existing underpayments and claim denials by Florida insurance companies, combined with vastly underfunded government programs such as Medicare and Medicaid, are what drive the price of this service higher. Ms. Brown rightly pointed out that the cost is also driven by the need to be available 24-hours per day. In order to respond to emergency calls at a moment’s notice, much like a fire station, air medical service providers must have aircraft, equipment, pilots, nurses, paramedics, and logistics personnel standing by around the clock. Not only is this expensive, it’s vastly underfunded by the majority of payers, including major insurance carriers that don’t recognize the true cost of readiness required to save lives. These same insurers also often deny coverage, claiming that the service is not medically necessary despite being called for by a first responder or medical professional. Insurers need to step up and cover these life-saving services because that’s what insurance is for. Regarding the Airline Deregulation Act, air medical providers are Air Carriers subject to Federal Aviation Administration regulations and Department of Transportation oversight. Since more than 30% of patient transports cross state lines, if state and local jurisdictions begin imposing their own separate regulations cost will rise and access will be reduced. The result will go beyond the issue of cost and will mean patients die who otherwise could have been saved.
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