By Liz Carey
Imagine for a moment you are a rural teacher driving home on a wintery day.
As you navigate the icy roads, your car runs off the road and into a ditch. A passing motorist sees the accident and calls 9-1-1. Unconscious, you aren’t aware what is happening. When the emergency medical crew shows up to treat you., and there’s no one around to give consent for you.
The small critical access hospital in your hometown can’t provide you with the care you need though, so you’re loaded into an air ambulance and flown to a medical center in a nearby urban area. With you are a nurse and a paramedic, providing you with the care you need to get you to the medical center alive. Again, you’re not given a choice where to go. No one checks your insurance to make sure the hospital is in your network.
After arriving at the hospital, you’re treated by emergency physicians, anesthesiologists, pathologists, X-ray technicians, and attending surgical staff. Within a few days, you’ve recovered and you’re released from the hospital.
Three months later, the bills start coming in.
The hospital may be in-network, but the anesthesiologist isn’t. While your insurance will cover your hospital stay, it only pays the anesthesiologist what it would pay any other anesthesiologist. The anesthesiologist bills you for the rest. And since your insurance company doesn’t cover air ambulance rides, you’re responsible for the entire bill, which could be in the tens of thousands of dollars. Even though you didn’t choose the air ambulance company, or authorize being transported that way, you are on the hook for the out-of-pocket expense. Because it’s not something that’s covered by your private insurance company, the expense doesn’t apply to your deductible either.
On your teachers’ salary, you’re unable to pay the bill that could amount to what you make in a year. The bill is sent to collections. Unable to pay, you’re forced to file for bankruptcy, ruining your credit.
Scenarios like these, researchers say, are common. But new legislation designed to combat surprise medical bills and bills for air ambulances will take effect January 1, 2022.
As part of the “No Surprises Act”, the U.S. Departments of Health and Human Services (HHS), Labor, and Treasury, along with the Office of Personnel Management (OPM), have issued new rules and requirements surrounding healthcare costs that seek to get rid of surprise billing and balance billing. The new rules also apply to services provided by ambulances and air ambulances.
Frequently, the quickest means of transportation for rural patients in emergencies are air ambulances. With rural hospitals closing, said Melissa Ballengee Alexander, professor of law at the University of Wyoming, in her piece “Rural Health Inequity and the Air Ambulance Abyss,” air ambulances are a necessary mode of transportation, but add to the inequity of rural healthcare – increasing costs for rural residents.
“Three-fourths of air ambulance transports are out-of-network, and the average balance bill sent to patients greatly exceeds the savings held by most Americans,” Alexander wrote in the Wyoming Law Review.
Providers are asking the uninsured and under-insured to pay up to 9.5 times the rate paid by Medicare. These inequitable cost and cost-shifting problems are getting worse each year, and they are disproportionately borne by rural populations who can least afford them. In addition to cost and cost-shifting issues, there are supply challenges. In some areas, oversupply of air ambulances has dramatically increased prices, as more providers spread their high fixed costs over fewer patients. In other areas, there are not enough air ambulances available within a reasonable response time. The problem is particularly acute in rural areas, which rely heavily on air ambulance transport to address gaps in access to care.
Patients rarely have control over the use of air ambulances when it comes to their care, as well as which services are used, and whether or not they are covered by their insurance provider.
The Centers for Medicare & Medicaid Services (CMS) estimated the median cost for air ambulance transportation at between $36,000 and $40,000. While air ambulance providers are not allowed to send surprise bills to Medicaid or Medicare patients, patients with private insurance often find that their air ambulance trips are out-of-network, leaving them with surprise bills in the tens of thousands of dollars, according to CMS. How much of the cost is passed on to patients is unclear.
A spokesman with CMS said air ambulances were something the Biden administration was including in the No Surprises Act.
Passed as part of the omnibus legislation to fund the federal government in 2021, as well as provide Covid-19 pandemic relief funds, the No Surprises Act’s new rules and requirements would protect consumers from out-of-network bills and balance billing, the spokesman said.
Currently, when an insurance plan doesn’t cover out-of-network care, the insurer may deny a patient’s bill entirely, or only pay a portion of the bill. When this happens, it leaves the patient liable for the balance of the bill – the difference between the undiscounted fee charged by the provider and the amount reimbursed to the provider by the insurance plan.
Balance billing can leave patients on the hook for hundreds, if not thousands of dollars.
Loren Adler, associate director with the USC-Brookings Schaeffer Initiative for Health Policy, said the “No Surprises” Act will fix that.
The No Surprises Act will, for one, completely stop the situation. If you go to an in-network facility or the facility that you’ve ended up at is in your insurer’s network, now it no longer matters what the nominal network status is of the anesthesiologist who assists with the procedure or the radiologist who does any imaging or the pathologist who reads a biopsy. It doesn’t matter whether they are out-of-network or in-network, your insurance company has to treat that service as if it’s in-network and that means your cost-sharing will be whatever the standard in-network levels are. And it has to apply to in-network deductible if you have that, and similarly, if you have an out-of-pocket limit on how much you can be held liable for any year, it will also apply there. It certainly should take that worry out entirely, and it would be just blatantly illegal for the anesthesiologist to send you a balance bill in that situation.
Under the new rules, in emergencies, out-of-network providers would only be allowed to bill what in-network providers would bill, and they would be prohibited from billing the patient for whatever insurance doesn’t cover.
Over the summer, the White House announced that the departments and OPM had drafted their first set of requirements addressing emergency services, air ambulance services, and non-emergency services provided by out-of-network providers at in-network facilities and that it would be requiring insurance companies and air ambulance service providers to submit information on air ambulance services.
“The air ambulance industry is a highly consolidated market that often leads to surprise bills for patients,” said Health and Human Services Secretary Xavier Becerra in a statement.
Most recently, in late September 2021, the departments issued a rule that aims to take patients out of the middle of payment disputes between healthcare providers and insurance companies. The rule also seeks to provides a transparent process to settle out-of-network rates between providers (including air ambulances) and payers.
“So, (with the new rule) it would be illegal to send an out-of-network air ambulance bill,” Adler said. “The insurer has to treat this as in-network. They have to apply whatever the in-network charge would have been for an air ambulance ride. If the air ambulance carrier is upset with or doesn’t agree with how much they are getting paid by the insurer… they can challenge it through an arbitration process which will make a final determination.”
Arbitration between insurers and providers though would happen behind the scenes and not impact the amount the patient is responsible for, he said.
The new rule would also require healthcare providers and healthcare facilities to provide uninsured patients with clear and understandable estimates of what their scheduled healthcare services would cost them.