Out‐of‐Network Air Ambulance Bills: Prevalence, Magnitude, and Policy Solutions

Health insurance Original Scholarship

Policy Points:

  • Out‐of‐network air ambulance bills are a type of surprise medical bill and are driven by many of the same market failures behind other surprise medical bills, including patients’ inability to choose in‐network providers in an emergency or to avoid potential balance billing by out‐of‐network providers.
  • The financial risk to consumers is high because more than three‐quarters of air ambulances are out‐of‐network and their prices are high and rising. Consumers facing out‐of‐network air ambulance bills have few legal protections owing to the Airline Deregulation Act’s federal preemption of state laws.
  • Any federal policies for surprise medical bills should also address surprise air ambulance bills and should incorporate substantive consumer protections—not just billing transparency—and correct the market distortions for air ambulances.

Context: Out‐of‐network air ambulance bills are a growing problem for consumers. Because most air ambulance transports are out‐of‐network and prices are rising, patients are at risk of receiving large unexpected bills. This article estimates the prevalence and magnitude of privately insured persons’ out‐of‐network air ambulance bills, describes the legal barriers to curtailing surprise air ambulance bills, and proposes policies to protect consumers from out‐of‐network air ambulance bills.

Methods: We used the Health Care Cost Institute’s 2014‐2017 data from three large national insurers to evaluate the share of air ambulance claims that are out‐of‐network and the prevalence and magnitude of potential surprise balance bills, focusing on rotary‐wing transports. We estimated the magnitude of potential balance bills for out‐of‐network air ambulance services by calculating the difference between the provider’s billed charges and the insurer’s out‐of‐network allowed amount, including the patient’s cost‐sharing. For in‐network air ambulance transports, we calculated the average charges and allowed amounts, both in absolute magnitude and as a multiple of the rate that Medicare pays for the same service.

Findings: We found that less than one‐quarter of air ambulance transports of commercially insured patients were in‐network. Two‐in‐five transports resulted in a potential balance bill, averaging $19,851. In the latter years of our data, in‐network rates for transports by independent (non‐hospital‐based) carriers averaged $20,822, or 369% of the Medicare rate for the same service.

Conclusions: Because the states’ efforts to curtail air ambulance balance billing have been preempted by the Airline Deregulation Act, a federal solution is needed. Owing to the failure of market forces to discipline either prices or supply, out‐of‐network air ambulance rates should be benchmarked to a multiple of Medicare rates or, alternatively, air ambulance services could be delivered and financed through an approach that combines competitive bidding and public utility regulation.

Keywords: air ambulances, out-of-network, surprise medical bills, balance billing.

Open Access

 

Published June 2020
DOI: 10.1111/1468-0009.12464


Citation:
Fuse Brown EC, Trish E, Ly B, Hall MA, Adler L. Out‐of‐Network Air Ambulance Bills: Prevalence, Magnitude, and Policy Solutions. Milbank Q. 2020;98(3):747-774. https://doi.org/10.1111/1468-0009.12464