A patient and air ambulance company jointly sued Anthem on Wednesday, alleging the Indianapolis-based insurer wrongfully deemed a critically ill patient's nearly $240,000 flight to a hospital as "medically unnecessary."
The lawsuit, filed in the U.S. District Court for the Middle District of Florida, arises from a coverage denial faced by an unnamed patient, who suffered a heart attack while on a cruise in the Dominican Republic in August 2019. The individual was covered under a company plan administered by Anthem through the Employee Retirement Income Security Act. The patient's doctor, who diagnosed the individual with myocardial infarction, insisted on medical evacuation to a level-one trauma center in the U.S., the complaint said.
The individual left the Dominican Republic via Tampa, Florida-based Jet ICU, and flew to Broward Medical Center in Ft. Lauderdale, Florida for care, according to the complaint. Anthem, which operates Blue Cross and Blue Shield plans in 14 states, agreed to reimburse the patient's ground ambulance services, but left the patient on the hook for the $237,770 out-of-network air ambulance charge, which Jet ICU and the patient allege violated its own coverage policy.
Under Anthem's certificate of coverage, the insurer promises to cover air ambulance services when an individual is transported for a medical emergency to a hospital, according to the complaint. But in a letter denying the individual coverage in December 2020, Anthem contended: "There were hospitals in the Dominican Republic that were able to provide the care that you needed."
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The complaint stated that Anthem did not specify which local hospitals operated level-one trauma centers that could have provided the care the individual needed. Lawyers also questioned why Anthem paid for the patient's land ambulance trip in Florida if the individual could have been treated at a hospital in the Dominican Republic.
"The fact that it did illustrates what is at issue: [Anthem's] arbitrary and capricious decision making to save money rather than an actual medical necessity determination," the complaint said.
By denying air ambulance coverage, the individual and Jet ICU alleged Anthem owes them for unpaid benefits under ERISA, and violated a Florida law that states insurers must reimburse out-of-network providers for emergency services.
Anthem did not respond to an interview request.
The No Surprises Act is intended to protect patients from being balance-billed for high out-of-network charges, including invoices that come from air ambulances, which are steadily increasing in price. The average price of an air ambulance ride rose 27.6% from 2017 to $24,507 in 2020, a recent FAIR Health analysis found.
From 2014 to 2017, 77% of air ambulance transports of commercially insured patients were designated as out-of-network, according to Milbank Quarterly. From 2016 to 2017, patient bills averaged about $20,000 for these surprise services, the publication found.
But there are questions about how effective the No Surprises Act will really be at protecting patients since air ambulance rates are, in general, so irrationally high thanks to fierce competition among private equity operators that have historically remained out-of-network, a recent Health Affairs article said. The rule stipulates that out-of-network arbitration between payers and providers will be based on the median in-network rate or previously contracted rates.
Some analysts also expect air ambulance companies to make up for any revenue lost under the law by charging higher in-network rates, which insurers will likely pass on to consumers in the form of pricier premiums. The Health Affairs article called for Congress to update the price Medicare pays for air ambulance services, and then use Medicare prices to determine commercial insurers out-of-network obligations.
"Arbitration cannot fix market failures, consolidation and unequal bargaining power that characterize the air ambulance market," Health Affairs authors wrote.