A Spotlight on the Problems of Ambulance Balance Billing
Everyone hopes to enjoy a healthy holiday vacation, without any tropical infections, injuries or mishaps on the ski slopes. But the truth is that illnesses and accidents can happen anytime, and emergency transport to a hospital by ground or air ambulance may be necessary. This can set the stage for financial disputes, as ambulance services that are outside of a health plan’s network bill the insured consumer for the balance not covered by the insurer—sometimes very sizable bills, especially in the case of air ambulances.
Many states have made progress in considering and enacting balance billing legislation related to out-of-network emergency room care or out-of-network providers working in in-network hospitals. However, ambulances generally are not addressed by this legislation, leaving consumers vulnerable to high ambulance bills. Several states tried throughout 2017 to address the issue of ambulance-related balance billing, but such efforts are still in their infancy and face challenging obstacles, including how to reimburse ambulance services if consumers are held harmless for amounts exceeding their in-network costs.
Much of the focus in statehouses this year was on air ambulances because of their high charges, sometimes in the tens of thousands of dollars. Ground ambulance charges, while substantial, are more commonly in the hundreds or thousands of dollars.
The major obstacle to state efforts to regulate air ambulance balance billing is the Airline Deregulation Act of 1978 (ADA), a federal law that prohibits states from regulating prices, routes or services of air carriers. So far, several courts have rejected state efforts to pass legislation protecting consumers from out-of-network air ambulance billing, ruling that the ADA forecloses state regulation of air ambulances.
In March 2017, the Fifth Circuit Court of Appeals ruled in Air Evac EMS, Inc. v. Texas that a lawsuit could proceed in which an air ambulance carrier sought a declaration that the ADA preempts enforcement of Texas laws and regulations capping workers’ compensation reimbursement rates for air ambulance claims. In August, in Eaglemed LLC v. Cox, the 10th Circuit Court of Appeals ruled that a Wyoming workers’ compensation rate schedule that set forth a maximum reimbursement rate for air ambulance claims was preempted by the ADA. The court also ruled that the McCarran-Ferguson Act, which reserves to the states the ability to regulate insurance, did not preclude that federal preemption. The court noted that policy arguments to exclude air ambulances from the preemption provision of the ADA had to be addressed by the U.S. Congress, not the courts.
The Utah and Montana legislatures had already made such arguments, passing joint resolutions earlier in 2017 urging Congress to amend the ADA to authorize states to regulate air ambulance billing to protect consumers from excessive out-of-network charges. Congress may be receptive to those concerns. On February 28, 2017, Senator Jon Tester of Montana introduced the Isla Rose Life Flight Act (S471), federal legislation which would end ADA preemption of state or local laws or regulations related to air ambulances. The bill was referred to committee and no further action has been taken, although the Pennsylvania legislature passed a resolution specifically urging passage of the federal proposal. The National Association of Insurance Commissioners (NAIC) and other national organizations of state officials and consumer groups have expressed their support for federal legislation to permit states to enact consumer protection laws regulating balance billing for air ambulance services.
At least two states passed air ambulance-related laws in 2017. In April, Montana enacted SB44, which holds consumers harmless in air ambulance balance billing disputes and establishes an independent dispute resolution process for payors and air ambulance providers. Montana also enacted SB292; it restricts an air ambulance provider from submitting information about a patient’s incomplete bill payment to a credit agency. Also in April, North Dakota passed SB2231, which requires hospitals to notify patients of an air ambulance service provider’s health insurance network status before the patient is transported so that the patient can make an informed decision. The law also requires insurers to provide reimbursement to out-of-network air ambulance services that is equal to the average of the insurers’ in-network rates for air ambulance providers in the state as “full and final payment” for out-of-network services billed to the insured.
State laws regulating balance billing by ground ambulance services are not common. But there are signs of movement in that direction. In New Mexico, proposed balance billing legislation (HB313) would include ambulance services in the definition of emergency services to which the law would apply. Similarly, in Georgia, proposed balance billing legislation (SB8) would include ambulance services. In New York, A03338 would amend the workers’ compensation law to establish a fee schedule covering the costs of ground ambulance services. In Florida, the Office of the Insurance Consumer Advocate formed an Emergency Medical Transportation (EMT) Working Group to meet over the course of a year to gather information and assess the impact of ground and air ambulance costs on Florida’s insurance consumers. FAIR Health was invited to participate in one of those meetings in June, presenting information on EMT pricing and trends in Florida.
Even when states pass balance billing laws related to ambulance services, such laws do not apply to self-insured, employer-sponsored plans, which are exempted from state regulation by federal law (ERISA). Such plans covered 61 percent of privately insured employees as of 2016.
Many state legislatures begin their legislative sessions in January so there will likely be more news on this front soon. In the meantime, as grateful as we are for the work of ambulance services, we wish all readers a year in which they do not need them.
Robin Gelburd is the President of FAIR Health.