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Are Air Ambulances Truly Flying Out Of Reach? Surprise-Billing Policy And The Airline Deregulation Act

21 Oct 2019 9:30 AM | AIMHI Admin (Administrator)

HealthAffairs Source Article | Comments courtesy of Matt Zavadsky

Interesting that the authors opine that the Department of Transportation may have the ability to create regulations for air ambulance services.  The ‘lead’ federal agency for EMS is in fact NHTSA, which resides within the Department of Transportation.

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Are Air Ambulances Truly Flying Out Of Reach? Surprise-Billing Policy And The Airline Deregulation Act

Karan Chhabra

Kevin A. Schulman

Barak D. Richman

OCTOBER 17, 2019


It wasn’t long ago that congressional leaders in both parties seemed to agree that something had to be done about surprise medical bills. But recent headlines suggest that federal legislative momentum has stalled, despite an initial surge of bipartisan interest.

 

One reason for the slowing response in Washington is that policy makers appear to have realized that surprise bills do not have an easy fix. To the contrary, surprise bills are pervasive throughout our health system, with many parts of the industry explicitly relying on surprising patients with out-of-network charges. The problem is typified by the rise (and political clout) of the air ambulance industry. The House Energy and Commerce Committee recently heard that 50–60 percent of air ambulance rides lead to out-of-network bills, such as the well-publicized charge of more than $55,000 for a helicopter ride after a snake bite and other shockingly high charges. In Massachusetts, which has collected all-payer surprise billing data, ambulance services in general account for 52 percent of all out-of-network claims.

 

The profitability of air ambulances has caught the attention of private equity firms, whose investments have allowed the industry to expand and consolidate. (These investment firms have also funded the lobbying campaign that has helped stall surprise-billing legislation.) 

 

It is critical to understand how air ambulances have become so lucrative, for their success reveals the core of the policy challenges that underlie other surprise bills. The air ambulance business model does not rely on a new technology or providing a valuable service; instead, it rests upon a carefully devised legal strategy that exploits the basic charge model in health care and then hides behind a legal loophole to prevent state policy makers from policing the industry.  

The Injustice Of Collecting Charges

Air ambulances rely on the ability to collect charges. Charges are what providers impose unilaterally, usually after a service has already been provided, without any assent from the consumer. Charges are different from prices, which emerge from voluntary market interactions between sellers and buyers. Prices are creations of market forces, whereas charges are foisted on the unknowing.

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