Interview: Air Ambulance Access Under Threat from Congress

Published December 16, 2019

The legislation would require providers to accept the median network rate set by insurers. Health Care News spoke to Carter Johnson, spokesperson for the Save Our Air Medical Resources Campaign, on how this legislation would affect access to this lifesaving service.

 Health Care News: How much of a market is there for air ambulance services?

Johnson: Many rural communities face a severe lack of access to emergency medical care. Since 2010, more than 110 rural hospitals have closed throughout the country. Because of these closures, approximately 85 million Americans now live more than an hour away from their nearest Level 1 or Level 2 trauma center.

Health Care News: How much does an air ambulance trip cost?

Johnson: Billing is based on two metrics: lift fee and mileage.

It is important to note the difference between the cost and the charge. The median cost of an air medical mission is just over $11,000 if every transport is paid equally by all payers: government health care programs and private insurance. That is not what occurs, however, because 70 percent of air medical flights are reimbursed by Medicare, Medicaid, or people who are uninsured and pay out of pocket, and these payers only cover just over 30 percent of that median cost.

Health Care News: What percentage of the air ambulance service market do Medicare and Medicaid cover, and what are the reimbursement rates?

Johnson: More than 70 percent of emergency air medical transport patients are covered by Medicare, Medicaid, another form of government insurance, or are uninsured. This means that air medical transport providers are drastically under-reimbursed on more than seven out of 10 transports.

On average, Medicare reimburses only about half of the cost of an air medical flight. In some states, Medicaid’s reimbursement doesn’t even cover the cost of fuel for a flight.

While Medicaid reimbursements vary by state, some states are reimbursing as little as 1/25th. Iowa and Utah Medicaid, for example, reimburse just $250 per air medical transport. By comparison, the average cost of fuel is $450 for the average transport.

This chronic under-reimbursement has led to the closure of 38 bases since January 1, leaving four million rural Americans without medical coverage within a 10-minute response time.

Health Care News: Who covers these unmet costs?

Johnson: The 30 percent of remaining transports are for patients with private insurance. Because of the drastic under-reimbursement by government payers, the cost of those transports is borne by the rest of the market. Unfortunately, private insurers increasingly deny emergency air medical transports based on “medical necessity,” after the fact, in more than 40 percent of privately insured claims, even though 100 percent of all air medical flights are deployed by first responders or medical professionals.

In some cases, insurance providers deny claims based on network status, while intentionally keeping air medical providers out of network.

Consumers buy insurance so they are covered in an emergency. That’s what insurance is for. According to a 2106 paper by Sierra Health Group, all air ambulance transports could be covered with a $1.70 a month premium.

Health Care News: How would benchmarking, setting out-of-network bills to a median price, affect air ambulance companies?

 Johnson: The Lower Health Care Costs Act [currently under consideration in Congress] would allow health insurers to decide what they want to pay, by setting a benchmark rate at the “median in-network rate.” These rates could be even lower than the ones air medical providers currently receive, further jeopardizing their ability to operate.

Moreover, this proposal does nothing to address the bad practices of private insurers. Some insurance providers have refused to allow any emergency air medical providers to go in-network, and others have only one in-network emergency air medical provider.

Health Care News: Let’s suppose more insurance companies included air ambulance services in their networks and reimbursed them fairly. Could that lead to oversaturation in the market and overuse of a pricey service?

Johnson: No. Air medical services follow demand, and they work to ensure that every American—no matter where they live or what their insurance status is—has access to emergency lifesaving care. These services are often the only way patients, particularly in rural America, have access to critical medical care.

Health Care News: What would be the best way to maintain access and keep costs in line?

Johnson: Moving forward with legislation before understanding the full cost of these health care services will not solve the problem. In fact, setting any kind of arbitrary benchmark rates without insight into accurate data could further limit patient access to air ambulances.

There is a better way. Last year, Congress directed the U.S. Department of Transportation to collect data from the air medical industry, develop recommendations for protecting patients from balance billing, improve disclosure, and inform consumers of insurance options. In addition, Rep. Ben Ray Lujan (D-NM) rightly introduced an amendment to the bill that would require private insurers to disclose their claims and payment data.

That committee has just begun to tackle this task, and Congress must allow this important work to continue. Then Congress should address the chronic under-reimbursement by government payers and the failure of private insurers to do right by their customers. Only then can we protect and preserve access to these lifesaving services.