The phenomenon, widely known as surprise billing, has troubled the United States for quite some time. It has been highlighted from time to time and fingers have been pointed at the insurance companies. The air ambulance industry is the only exception where it is being blamed for the excess bills that people are compelled to foot. Why so? The answer is obvious: the size of the bills is so big that it often makes headlines. In this context, the pertinent question to ask is this: is surprise billing a problem that is limited to the air ambulance industry? The answer is a resounding ‘no’.
Air Ambulance Services and the Concept of Insurance Network
Imagine a situation where you have to get checked for a potential disease that can be life-threatening. You take care to ensure that you choose a hospital that is within your insurance network. You are referred to a specialist and a few lab tests are ordered. A week later, you come to know that the specialist and the lab tests are not within the insurance network and you are expected to pay off the bills all by yourself. It seems like a no-win situation, right?
Whose Responsibility is to Verify Insurance Network?
It is unrealistic to expect the patients, who often are in emergencies, to verify network coverage before availing treatment. The responsibility must, therefore, be jointly shared by the service providers and the insurance companies. At present, that is not the case. This is the precise reason why surprise billing is so prevalent. In the case of air ambulance services, this amount is usually pretty steep, driving families towards bankruptcy. The blame ultimately is pinned on the air ambulance industry, which is not entirely fair. However, it must be noted that the medical flight industry is loosely regulated when it comes to billing practices and must be scrutinized too.
Congress has been focussing heavily on eliminating surprise billing practices and involves not just the air ambulance industry but the healthcare landscape as a whole in the United States. In this regard, one significant development has been the introduction of the Consumer Protection Against Surprise Medical Billing Act. The Act is currently slated to enter the United States House of Representatives for a vote. Thus far, the billing practices of the industry have found protection under the Airline Deregulation Act of 1978, which precludes the states from interfering in the matters of medical flight billing.
The New Bill and Air Ambulance Billing
The most important provision of the bill is that it will protect all the patients against balance billing practices even if the service provider is out-of-network of the insurance company. The patients will only be charged according to the in-network charges, which obviously will be covered by their insurance.
Explanation of benefits in advance is another important provision. Currently, the patients have no say in opting for air ambulance services during emergencies. The healthcare provider would take the call during the emergency, and the patient would not have a say. This will change with the introduction of the new bill, allowing the patient to make an informed decision.
If the new bill is successful, the air ambulance service providers would be compelled to give cost estimates before providing the services to the patient. In essence, the patient will be able to make a prudent financial decision if he or she is paying by cash or is uninsured.
A mediated process for resolution of the dispute would be put in place. Any party involved including the air ambulance company would be free to dispute any part of the payment through a mediated process. There would be a window of 30 days to find a resolution.
An insurer has gone to the Kansas Supreme Court dragging a medical flight company. The contention has been that the company has been charging unreasonably high prices for its services. Terming the practice of billing ‘predatory’, the petitioner has asked the court to intervene, although the medical flight industry has been insulated by a federal law that bars states from interfering in the matters of billing. The court is yet to pass a ruling, and the service provider in question is EagleMed. The air ambulance industry argues that high charges towards privately insured people are a way to offset the losses resulting from uninsured people or those with Medicaid and Medicare.
The Tough Competition in the Medical Flight Industry
There are several players in the medical flight industry today. This means more service providers for a limited number of service seekers. This makes it incredibly hard for most companies to stay afloat because they fail to get enough customers to balance the costs. As a result, the cost of maintenance is distributed among those who avail of their services. The federal law acts as a shield allowing these companies to employ this practice.
The Federal Law is Aimed at Staying Competitive
The Airline Deregulation Act of 1978 is a federal law. It is aimed at airlines, and since the medical flight industry is considered a part of aviation and not the healthcare industry, the Act holds good for it too. However, the main purpose of this act is to encourage competition to lower prices. This is not the case with air ambulances. Since the patients have little say in the service providers that they choose during emergencies, the medical flight companies get a free hand to charge as they please. The insurance companies, on the other hand, have not changed their coverage for years together. This translates into lower coverage, and the ultimate burden of clearing the bills falls on the customers.
Healthcare costs are not just about air ambulance costs. The United States of America has one of the highest healthcare costs in the entire world. An average American spends over 10 thousand USD in a year and the nation spends 3.3 trillion USD each year. This amounts to about 18 percent of the country’s GDP. Let alone the need for an air ambulance, a simple emergency room visit can leave a foreign national in huge debt. Hospitals simply do not release patients unless the care debts are paid out in full. A scenario like this can quickly turn a fun vacation into a financial nightmare, leaving the patient bankrupt.
A New Legislation May Necessitate Insurance
Although the legislation is primarily targeted towards immigrants to the nation, it is not entirely clear whether it applies to visitors to the nation as well. According to the new law, immigrants will have to purchase insurance for a period of 365 days or until such time that they stay in the country, whichever comes earlier. The move is meant to insulate the country from bearing high healthcare costs. In the face of this uncertainty, experts recommend that, regardless of the regulation, visitors must opt for comprehensive insurance.
A Policy that Covers Air Ambulance Services is Ideal
Not all visitors to the country arrive without insurance. However, many of them do not opt for adequate coverage. A slightly expensive premium can offer comprehensive coverage. Here is a scenario: you embark on a cruise during your visit. Unfortunately, you end up having a stroke. You will need to be flown to the nearest appropriate medical facility via an air ambulance service. The cost of this transport is going to cost quite a lot. The wise thing to do, therefore, is to explicitly ask your insurance provider about air ambulance coverage to stay safe.
The air ambulance industry has been in the headlines for quite some time now. Most recently, however, it was because the state of Wyoming was attempting to regulate it. The hurdle was (and is) a federal regulation that prohibits state governments from interfering in the affairs of air ambulance industry. However, the attempts were rejected by CMS. Wyoming had proposed that the states must be allowed a say in the matters of air ambulance industry. It had done so to keep the cost of medical flight services at bay as they have been getting steeply expensive recently.
Does this Mean the Air Ambulance Industry has Won?
The answer is “yes.” At least for now, the air ambulance industry seems to have won. The CMS verdict favors the medical flight service providers. They will not be subjected to any state control and will be free to fly across state borders and also charge the consumers what they feel is the right amount.
The industry had feared that if they are forced to come under insurance networks, they will then have to conform to the reimbursement rates that are set by the insurance organizations. This was especially worrying since the rates have not been revised in over a decade. Moreover, since bidding system to offer services for a particular state would have come into picture, there were high chances that some insurance companies would have gone out of business.
What does it Mean for Consumers?
Consumers will now have access to a wide range of air ambulance companies. This means they will be able to avail specialized medical flights during emergencies. Since the profitability will remain unchanged, the air ambulance industry would find it financially encouraging extending their reach to remotest parts of the country. There, however, is one drawback. Since insurance companies have not still revised their reimbursement rates, the consumers are at risk of high out-of-pocket expenses.
A recent survey has shown that medical flight services are now more open to insurance network participation. In fact, the numbers have gone up by a healthy 20%. It has also been seen that the medical flight services and insurance companies are holding intense discussions and negotiations surrounding in-network arrangements.
The reason behind this change has been the huge increase in consumer demand and also to steer clear of the negative publicity that both the industries have been subject to in recent times. The efforts by the state governments to regulate air ambulance pricing and also getting insurance companies onboard with their cost-controlling measures have seen a lot of backlash recently.
The Medical Flight Services and their Cost Compulsions
The refusal of the insurance companies to take cognizance of the fact that maintaining medical flight services is an expensive affair – some say – was the cause of all the misunderstanding. Air ambulance companies usually spend a fortune to remain on standby for emergencies. The cost, of course, is then transferred to their services. When insurance companies refuse to foot these costs, the burden unfortunately is transferred to the patients who avail the service. This is a practice that is popular as ‘balance billing’.
How In-Network Coverage Helps
Customers are able to enjoy discounted and ‘fair’ out-of-pocket expenses to cover medical flight services when in-network coverage becomes a reality. In an ideal world, all air ambulance services providers must be in-network. However, the onus of it does not lie only on these emergency service providers. The insurance organizations too must be willing to reimburse a fair amount. Otherwise, it simply does not make business sense for medical flight services to join any network.
The good news, however, seems to be that both these industries are coming around and finding common grounds to work together.
There has been much anticipation surrounding the new air ambulance bill that aims at curtailing surprise billing practices. However, experts opine that the draft leaves much to be desired for both parties – the payers and the air ambulance service providers. The feeling is that the lawmakers have tried to take a middle ground so as to not displease the air ambulance industry or the medical insurance industry.
From the insurance industry point of view, the fact that it suggests an in-network rate even for those medical flight service providers that are out of network seems like a big win. The provision is something that payers have wanted all along.
From the air ambulance industry point of view, the draft allows for arbitration if there is a dispute with regards to the billing. However, since this comes in the backdrop of a set rate, the industry is not too happy about it.
How is the Air Ambulance and the Wider Healthcare Industry taking it?
The American Hospitals Association has strongly opposed the draft. Their reasoning is that it harms the rural hospitals by limiting the access that patients currently have. The association went as far as saying it is a ‘windfall’ for the insurers ‘at the expense of’ community hospitals. American Association of Medical Colleges too has opposed the draft.
America’s Health Insurance Plans has displayed its dissatisfaction surrounding the provision for arbitration.
More about Arbitration
When it comes to air ambulance companies, arbitration will only be possible for amounts over $25,000. The industry is also expected to provide two years’ worth of data pertaining to costs. This data would be provided to US Transportation Secretary as well as HHS.
The air ambulance industry has been vocal in raising the concerns surrounding patient safety as well as closure of medical bases. They also pointed out that the current insurance payouts by Medicare and Medicaid do not cover even 40% of the costs.
Imagine a situation where a patient is in a life-threatening situation and a medical flight is an absolute necessity. The treating physician recommends an air ambulance. However, when a call is placed for dispatch, the service provider refuses to comply. The reason behind this is bad weather conditions. The hospital then calls several other service providers until they find one that is willing to take the risk. This is called medical flight shopping. While this might seem to be a logical recourse for the patient, it is not always desirable. The risk taken by the patient and the crew is huge in such circumstances. Why do air ambulance service providers agree to such a call?
The Pressures on the Medical Flight Industry
There are over a thousand medical flight service providers in the United States. This means they have to divide the existing customer base within themselves. Plus, most of these businesses are privately funded so profits matter. Rejecting patients for whatever reason does not serve the profit motive of these investors. Hence, the crew is compelled to take the call of answering to the need. However, this eventually places a huge financial burden on the patient. Let’s understand how.
The Out of Network Issue
In a situation where the need for medical flight service is huge and time is short, the patient does not really have the option of choosing a service provider. Most often, the service that he or she ends up with is one that is not covered by the insurance provider. While the insurance might cover a base rate, medical flight companies do not always comply with such rates. As a result, the patient is later compelled to cough up a steep price that the medical flight company charges in the form of balance bills. Medical flight shopping thus is a high-risk and expensive affair – a practice that must be relooked.
Surprise billing or balance billing is not just a problem specific to the air ambulance industry. The healthcare landscape itself is riddled with it. We have seen far too often that people who opt for a medical flight service receive huge bills that are not covered by the insurance network.
As a result, they end up liable to pay the surprise bill to the air ambulance service provider. While we often see that the money is waved off or a huge discount is offered, it is still an inconvenience and often a point of friction between the consumers and the medical flight company.
Is the Air Ambulance Industry Doing Enough?
Doubts are often raised whether the air ambulance industry is doing enough to keep the costs in check. While it is undeniable that there are some bad actors, the industry experts reveal that going in-network is not an option. The reason is the unfair reimbursement rates they say.
At the current time, the cost projections by the air ambulance industry and what the insurance companies are willing to reimburse are poles apart. Of course, there are some initiatives like memberships that medical flight companies offer, but not many are able to get the full benefits of such initiatives as consumers do not feel that necessity to pay extra, in addition to their insurance premiums.
What Can the Air Ambulance Industry Do Further?
It all comes down to negotiations. It is imperative that the air ambulance industry has a healthy discussion with the insurance companies to arrive at a fair reimbursement rates. The industry must be flexible enough to ultimately join the insurance networks.
Moreover, there is a necessity to present their points of view to the government so that there is a clear understanding of the roadblocks. The ultimate aim must be to unburden the common man.
Recently a woman aboard a cruise ship called Norwegian Escape fell seriously ill. It went on to the extent that an air ambulance had to be called out. Lucky for her, the coast guard was reachable and quickly responded to the emergency by evacuating her. However, not all are as fortunate as this woman to find help when it is needed most while cruising through a fun vacation in high seas.
Often, while in international waters, with different national borders in place, the logistical problem can turn out to be a nightmare. The cost too can be quite high as evacuation is rather tough and involves huge distances. Insurance coverage is therefore of paramount importance.
Ask About Air Ambulance Coverage Beforehand
Not all travel insurance policies will cover air ambulance evacuation and you might have to shell out a huge amount for this purpose. There have been instances where people have even turned to crowd funding to pay air ambulance bills. The wisest thing, therefore, is to opt for a travel insurance that has comprehensive medical flight evacuation coverage. Moreover, you would not want to be treated in a foreign country if the treatment duration is long. Getting back to your home country among your loved ones would be among your top priorities.
Your Options without an Air Ambulance Coverage
If you have deep pockets, of course, there is absolutely nothing to worry but if you do not, it can be a problem. Minor ailments like broken bones, fever, and food poisoning is cared for onboard the cruise as each one hosts medical professionals. However, if the health condition is severe, the ship simply has to wait for the nearest port and admit you there. It would then leave with the remaining passengers once you are assured appropriate medical care. Sounds a little scary? That’s precisely the reason you need comprehensive air ambulance coverage.