A new study documenting high air ambulance charges could bolster a congressional effort to ban the medical transport companies from balance billing for their services.
In 2016, the national median charges for air ambulance services were 4.1 to 9.5 times what Medicare paid for the same services, according to a study published in Health Affairs on Monday by Johns Hopkins University researchers.
That's a much higher median charge disparity than for ground ambulance services or for physician services.
In addition, median charges for air ambulance services compared to Medicare rates soared by 46% to 61% from 2012 to 2016. For Medicare patients, the median charge per trip increased from $24,000 to $39,000.
Many air ambulance providers are not in insurance networks, leading to patients getting stuck with surprise out-of-pocket bills for thousands or tens of thousands of dollars. That has triggered public anger, prompting state and federal lawmakers to propose limits on balance billing by air ambulance companies.
Last month, the Senate health committee shocked the air ambulance industry, which is made up heavily of private equity-owned companies, by including a balance-billing ban for air ambulance services in its broader legislation to regulate surprise out-of-network billing.
Experts say only the federal government has the authority to address the problem of out-of-network bills from air ambulance companies. Courts have blocked states from regulating these companies due to a federal law governing air carriers, the Air Deregulation Act of 1978.
The Johns Hopkins researchers agreed on the need for federal action.
"Our results suggest that without congressional or regulatory effort to address air ambulance billing practices, patients—who in emergencies have few options and little bargaining power—are at risk of exposure to excessive charges," they wrote.
The lead researcher, Ge Bai, an associate professor of health policy and management, said the balance-billing issue results from a market failure in that some geographic areas have an oversupply of air ambulance providers, but patients have no way of comparison shopping in emergencies.
The Association of Air Medical Services, the industry's lobbying group, blamed inadequate Medicare and Medicaid payment rates for the out-of-network billing controversy. It said air ambulance services are essential for Americans, particularly in rural areas, and that the federal government needs to conduct a study to develop rates that cover actual costs in order to preserve these services.
The new study found that helicopters provided about 85% of air ambulance trips for Medicare patients in 2016. From 2012 to 2016, the numbers of trips and miles served for Medicare patients jumped by 17% and 21%, respectively. For fixed-wing aircraft, those numbers increased by 25% and 32%, respectively.
Rocky Mountain Holdings, owned by private equity firm American Securities, was the largest parent company for helicopter ambulance services, providing 21% of all trips for Medicare patients in 2016. Its three subsidiary providers were among the top five in median charge ratios compared to Medicare rates at 7.9, 8.7 and 10.4.
In the fixed-wing category, Eagle Air Med Corp., owned by private equity firm Kohlberg Kravis Roberts & Co., and Rocky Mountain Holdings were the two largest providers, accounting for 17% of all trips for Medicare patients in 2016. Their median charge ratios compared to Medicare rates were 9.2 and 9.4, respectively.
In March, the Government Accountability Office reported that air ambulance companies have substantially increased their number of aircraft bases since 2012. But some experts say they have increased supply beyond the need for their services.
Congress last year ordered creation of an advisory committee of stakeholders to examine air ambulance price-transparency measures and consumer protections against excessive charges.
