Billing practices of air-ambulance services is a “hot topic” among many insurance groups. The question involves the large and often unexpected charges airborne transports can impose on insurers and consumers.
Patients may need air transport when they’re physically and mentally unable to give consent, or to understand the cost impact or options.
No one questions the value of emergency air transport in times of great medical need. Yet issues abound about how the services are billed and paid for.
An air ambulance may sit unused for hours or even days, but expenses are constantly being incurred. Often four crews of pilots and medical professionals work six-hour shifts daily to be “on call.” Maintenance expenses continue even without flights.
Medicare and Medicaid are the largest payers for these services, and have fixed billing schedules on a state-by-state basis. Yet no state appears to cover the full cost for medical air services. Next come private insurers — including healthy and property-casualty insurers. Collecting from uninsured patients is sporadic at best.
Herein lies the issue, which some say is “tantamount” to insurance fraud via excessive billing.
Using what’s called “rate-based billing,” many air ambulance services “roll” insurance bills into the overall operating expenses. Insurers thus arguably pay a disproportionate share of expenses. The billing includes staff and operational expenses far beyond the time spent transporting the insured patient.
Equally concerning, patients are personally billed for the portion of air transport that their insurance doesn’t cover. That can impose thousands of dollars of surprise costs. Consumers are losing their homes from court judgments for air ambulance services the patients never requested or agreed to pay, one Western legislator recently said of incidents in her state.
Compounding matters is whether state insurance regulators have authority over air-transport companies; the federal Airline Deregulation Act covers these services. States lack jurisdiction, a federal court also recently ruled. This situation directly impacts consumers and health insurers. It also affects property-casualty carriers that pay for the services — while denying the state-regulated industry a direct say in oversight.
Large air-transport bills may fall short of traditional insurance fraud. Yet many observers are calling for legislation or for revising federal aviation law to permit more state regulation of air-service providers.
Air ambulances involve large insurance billings, and charges beyond actual services rendered. The Coalition will actively monitor developments for fraud implications, and keep members informed. Consumers and insurers equally should be aware of this important issue. The large bills directly impact on the cost of insurance, medical services, and premiums that consumers pay.
About the author: Matthew Smith is associate director of government affairs for the Coalition Against Insurance Fraud.