Missourians are frequently subjected to aggressive collection efforts by air ambulance providers totaling tens of thousands of dollars in a practice called balance billing, according to a detailed report released today by the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP).
To assess the scope of the problem, the DIFP initiated a data call for insurers in Missouri. The data call covered fully-insured health coverage under the regulatory purview of the DIFP. Estimates derived from these data indicate that of the $25.7 million billed for air ambulance services in 2017 alone, Missourians could have been balanced-billed a maximum of $12.4 million, or an average of nearly $20,000 per individual.
Among the key findings of the Department identified in the report:
- Balance billing for air ambulance transports is widespread in Missouri and has a significant and negative impact upon Missouri consumers. In some instances, Missourians with private health insurance have been subjected to balance billing in amounts in excess of $100,000;
- Many air ambulance providers do not participate in many health insurance provider networks. Provider networks allow covered enrollees to take advantage of an insurer’s negotiations to keep costs low and protect. The contracts entered into between insurers and providers also protect enrollees from owing additional money beyond the mutually agreed upon reimbursement rate.
- Private health insurance is increasingly bearing the brunt of costs of air ambulance transports, with Missourians ultimately seeing these increased costs reflected in higher health insurance premiums. Based upon data provided by Missouri insurers as well as a review of publicly available information on Medicare and Medicaid reimbursement rates, the report identifies Medicare reimbursement rates for base charges run between $3,368 to $6,404, Medicaid reimbursements for base charges average $2,253. Conversely, data from the insurers revealed private health insurers were billed $41,321 on average, with the average amount paid by health insurers in 2017 being $23,087.
- Some air ambulance providers engage in aggressive collection efforts to collect amounts not paid by private health insurers, including filing lawsuits and placing liens on homes. A quick search of Missouri’s court records returned over 184 records since 2012 for one of Missouri’s largest air ambulance providers. The four most legally active providers together had 427 actions over the same time period, with recoveries commonly in the tens of thousands of dollars.
“With air ambulance bills, Missourians are subjected to extremely aggressive collection efforts, at a time when they are quite vulnerable as they are already recovering from a medical emergency”, said Director Chlora Lindley-Myers. “We hope this report illustrates to state and federal policymakers the scope and seriousness of this problem and the need for urgent action.”
The report also highlights findings from consumer complaints received by the Missouri Department of Insurance, Financial Institutions & Professional Registration (DIFP). Since 2013 (the first year the DIFP began tracking such complaints), 128 individuals have contacted the Department with questions or complaints involving their insurance coverage for air ambulance services. Since 2014, the Department has received 115 complaints and inquiries related to air ambulance services.
Consumers received some form of recovery in 23 cases, such as when a denial was overturned, or insurers increased their settlement offer. As a result, consumers recovered over $560,000 since 2013.
In investigating complaints regarding air ambulances, the Department’s jurisdiction is limited to fully insured health plans, covering approximately 1.2 million Missourians in 2017. The Department has no authority to assist consumers who are covered under self-funded group health plans, which cover approximately 1.9 million Missourians.
The investigations ensure that the insurer is in compliance with relevant state insurance laws as well as their own contractual language. The Department also is, in many instances, unable to assist consumers who have been saddled with unpaid air ambulance bills when the insurers’ actions do not clearly run afoul of insurance regulatory standards. States generally have very limited regulatory authority over air ambulances in general.
Air ambulance services are governed by the federal Aviation Deregulation Act (ADA) of 1978, which carved out broad federal preemptions to state regulation of aviation. The act specifies that states may not regulate in any way the “price, route or service of an air carrier.” The National Association of Insurance Commissioners has been engaged on this issue and in working with members of Congress to find ways to protect consumers from the financial devastation of air ambulance balance bills. More information about state insurance regulators work on this issue through the NAIC can be found on the NAIC’s website.