Air ambulance billing model remains largely untouched – for now

March 22, 2018 Tina Seever, RN, CPHQ

Like so many of our clients, we’ve been closely watching the developments in air ambulance billing. The recent ruling by Texas’s 3rd District Court of Appeals on January 31 was the latest blow to those who want to see regulatory limits and air ambulance billing disassociated from the federal Airline Deregulation Act (ADA).

The ruling in Texas reversed a lower court’s decision allowing the state’s Division of Workers’ Compensation to set reimbursement rates for air medical transport services. Like similar decisions by federal trial judges in Florida, North Dakota and Wyoming, as well as a state appellate judge in California, it holds that the ADA preempts state law. Federal judges in West Virginia and the Kansas Workers’ Compensation Appeals Board also reached a similar conclusion, but those cases have been appealed.

As a medical bill review company, we’re constantly looking for compliant ways to reduce what’s owed on a medical bill. In the case of air ambulance services however, there are no current restrictions on what they can bill. As a result, these companies can set basically any price.

The major obstacle to various states’ efforts to regulate air ambulance balance billing is the ADA, which prohibits states from regulating prices, routes or services of air carriers.1

At least two states passed air ambulance-related laws in 2017. Montana enacted SB44, which holds consumers harmless in air ambulance balance billing disputes and establishes an independent dispute resolution process for payers and air ambulance providers. Montana also enacted SB292, which restricts an air ambulance provider from submitting information about a patient’s incomplete bill payment to a credit agency.1

Also in 2017, North Dakota passed SB2231, which requires hospitals to notify patients of an air ambulance service provider’s health insurance network status before the patient is transported so that the patient can make an informed decision. The law also requires insurers to provide reimbursement to out-of-network air ambulance services that is equal to the average of the insurers’ in-network rates for air ambulance providers in the state as “full and final payment” for out-of-network services billed to the insured.1
Federal balance billing legislation (S284/H817; H3877) was introduced in 2017 but without explicitly mentioning ambulance services.1

Given the conflict existing among many federal courts as to whether the ADA preempts states’ rights to regulate air ambulance reimbursements under workers’ compensation laws and regulations, the U.S. Supreme Court may again have to resolve this – going one step further than the court in the Morales case.2

Until then, jurisdictions concerned about not being able to regulate air ambulance rates for workers comp may have to go the route of lobbying Congress to amend federal law to allow for an express exemption for workers compensation – just as HIPAA exempts workers compensation from its coverage.

1 Excerpted from “A Spotlight on the Problems of Ambulance Balance Billing” by Robin Gelburd, FAIR Health
2 Morales v. Trans World Airlines (90-1604), 504 U.S. 374 (1992)


About the Author

Tina Seever is a Workers Compensation Compliance Leader

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