When patients need to be airlifted to medical care in an emergency, the first priority is getting them to the right healthcare provider as quickly as possible. Patients are at a disadvantage in this urgent situation because they cannot determine whether air transport is a medical necessity, nor are they equipped to direct which air ambulance provider should transport them. This can lead to surprise expenses when the air ambulance provider does not have a contract with the patient’s health insurance plan. The patient may then be billed for the full charge of the flight or the balance left after any payment by the insurer for the out-of-network coverage.
Over the last 15 years, there has been a dramatic change within the air ambulance industry, with a rapid expansion of operators entering the market, particularly increasing the number of vehicles run by for-profit carriers. Those market changes have had far-reaching effects on the costs patients must pay for services, and have resulted in patients receiving unexpected, exorbitant bills for tens of thousands of dollars for emergency transportation that the patient assumed would be covered by their health insurance.
Unexpected air ambulance bills are often the result of a common practice known as “balance billing” – when a provider charges patients for outstanding balances beyond what the insurance company has paid the provider. Consumers are generally protected from this practice if their insurance company has a contract with the air ambulance provider but out-of-network providers are not bound by in-network rate agreements.
During the 2017 legislative session, legislation was enacted to eliminate the large and unexpected balance bills North Dakotans have been receiving from air ambulance providers even though these North Dakotans have health insurance. From 2013 through 2017, the North Dakota Insurance Department received 34 complaints totaling $1.86 million in uncovered charges for air ambulance services. Based on these complaints, each air ambulance ride has cost the consumer $54,705 on average.
The 2017 legislation states that before a hospital refers a non-emergency patient to an air ambulance service provider licensed by the Department of Health or initiates contact with such an air ambulance service provider for air transport of the patient, the hospital shall inform the patient or the patient’s representative of the air ambulance provider’s health insurance network status for the purpose of allowing the patient or the patient’s representative to make an informed decision on choosing an air ambulance service provider or alternative form of transportation. In other words, consumers are being educated as to which air ambulance company should be called in order to make sure the majority of the charges will be covered by their health insurance. The Department created a user-friendly chart, the Air Ambulance Participation Guide, to help inform patients of which air ambulance providers are in-network or out-of-network with the three insurance carriers in North Dakota. This portion of the law went into effect Aug. 1, 2017.
This legislation also included a law regulating how health insurance companies pay certain out-of-network air ambulance claims to eliminate the large and unexpected balance bills from air ambulance providers. The law required an air ambulance patient’s insurance company to pay an out-of-network air ambulance provider the average of the in-network rates for air ambulance providers the insurance company contracted with, and that payment was considered full and final payment for air ambulance services. The law went into effect as of Jan. 1, 2018. However, in Jan. 2019, a federal district court order was issued that prevents the Insurance Commissioner from enforcing this law. The district court decision was appealed, and that case is currently pending a decision in the 8th Circuit.
The final provision of this bill addresses subscription services sold by air ambulance companies. The law states an air ambulance provider may not sell, solicit, or negotiate a subscription agreement to cover air ambulance services. Most of the subscription services in the state have been marketed and sold by Valley Med Flight. The subscription services are problematic for several reasons. If your health insurance company is in-network with Valley Med Flight (Blue Cross Blue Shield of North Dakota and most Medica plans currently are, Sanford Health Plan is not), then the consumer already has existing coverage for air ambulance flights and the subscription plan is duplicative and unnecessary. This portion of the law was also effective Aug. 1, 2017.
If a consumer has Medicare, under federal law an air ambulance must accept the Medicare payment as full and final payment. Therefore, Medicare patients cannot be balanced billed beyond deductibles and coinsurance requirements. So if a consumer has Medicare, paying for a subscription plan is again unnecessary and duplicative coverage.
On March 27, 2021, the 8th Circuit Court of Appeals issued an Order holding that the 2017 legislation attempting to prohibit balance billing by air ambulance providers was pre-empted by the Airline Deregulation Act, which prohibits states from regulating the price, route, or service of an air carrier, including air ambulance providers. Under the Patient Protection and Affordable Care Act, consumers who receive ambulance services are protected from balance billing. However, in the case of air ambulances, these protections are only applied when the service is affiliated with a hospital and thus considered an extension of the emergency department service. The 8th Circuit’s ruling allows Guardian Flight, LLC, and other air ambulance providers in North Dakota, who are not in-network with the patient’s insurance plan, to continue to balance bill the air ambulance patient.
The Court also invalidated the legislation attempting to ban the sale, solicitation and negotiation of air ambulance subscription agreements in North Dakota, concluding that this law was also pre-empted by the Airline Deregulation Act and was not saved by the McCarran-Ferguson Act, which offers some protection for state laws that govern the “business of insurance.”
The North Dakota Legislature, in the 2021 session, enacted section N.D.C.C. § 26.1-47-10 regarding notice and prior authorization requirements related to non-emergency air ambulance services. This statute requires health care providers in North Dakota to either request a prior authorization from a covered person’s health care insurer for air ambulance services to be provided to the covered person or, in the event that the provider is unable to request or obtain a prior authorization from the covered person’s health insurer, the health care provider must do the following:
- Provide the covered person or the covered person’s authorized representative with a written disclosure regarding potential out-of-network air ambulance provider costs, along with other written notice of other patient rights and responsibilities related to non-emergency out-of-network air ambulance services and related expenses.
- Upon providing the covered person or covered person’s representative with the written disclosure described above, the provider must obtain the covered person’s or the covered person’s authorized representative’s signature confirming receipt of the written notice prior to access to the non-emergency air ambulance services.
The No Surprises Act, Public Law 116-260, which will go into effect on Jan. 1, 2022, generally prohibits out-of-network providers in emergencies, and out-of-network providers at in-network facilities, from billing patients for more than their in-network cost-sharing amounts. The purpose of this is to protect patients from surprise balance bills from out-of-network providers. The Act also sets up an independent dispute resolution process to determine the amount the patient’s health plan will pay the providers for the out-of-network service.
The Act applies to air ambulance providers. Specifically, the Act applies in the case of an insured patient who utilizes air ambulance services via helicopter or airplane from a non-participating, or out-of-network, air ambulance provider (The Act does not apply to ground ambulance services or providers). The Act prohibits an out-of-network air ambulance provider from billing or holding liable the insured for a payment amount for its air ambulance service that is more than the in-network cost-sharing amount (co-pays, deductibles, etc.) for that service under the plan. The Act does not set benchmark reimbursement amounts for any service.
The provider and the health insurance plan must either negotiate a reimbursement amount or utilize an independent dispute resolution process via arbitration. If the out-of-network provider and the health insurance plan cannot agree on a payment rate through negotiation, they must enter into an arbitration process and each submit their final proposed rates to the arbitrator, who must then choose one of the proposed rates. The arbitrator must consider certain factors, and determine the final reimbursement amount.
Regardless of whether the reimbursement amount is reached through negotiation (between the air ambulance provider and the health insurance plan), or through arbitration, the patient is protected from any surprise balance bills above and beyond the amount the cost-sharing amount they would pay for in-network air ambulance services under the terms of their health insurance plan.
In summary, the Act, as it relates to air ambulance services in particular, (1) protects air ambulance patients from receiving surprise medical bills resulting from gaps in coverage for emergency services and certain services provided by out-of-network air ambulance providers; (2) holds air ambulance patients liable only for their in-network cost-sharing amount; (3) allows air ambulance providers and insurance plans an opportunity to negotiate reimbursement; (4) allows air ambulance providers and insurers to use independent dispute resolution process if they cannot agree upon reimbursement through negotiation; and (5) requires both providers and health insurance plans to provide notice and assist patients/insureds in accessing health care cost information.
The Act is a very important step in protecting consumers from costly surprise balance air ambulance bills.