For some time now, Americans have found themselves at the mercy of a bloated healthcare system. Sure, healthcare in the US is among the best in the world, both in terms of timeliness and quality of care. But for many, the exorbitant prices make these healthcare services inaccessible – and healthcare bills have become a source of severe apprehension, outstandingly so in the instance of an emergency.

Take, for example, findings from a 2021 study cited by the Centers for Medicare & Medicaid Services (CMS). Data revealed that payments made to providers by people who got a surprise bill for emergency care were more than 10-times higher than those made by other individuals for the same care.

Not only that, but cases of surprise medical bills have increased year-on-year, as have the prices of the bills themselves. Indeed, a 2021 report published by the US Department of Health and Human Services (HHS) estimates that for those that are privately insured, over 50 per cent of air ambulance trips are out-of-network (OON), which inherently results in surprise bills.

Engineering a ‘more competitive healthcare system’

But it’s not as if anyone reading this needs a history in balance billing. And it’s also not that anyone working in emergency medical assistance operations disagrees with the sentiment that citizens should be charged less for healthcare. Most people that go into this industry primarily do so because they have a desire to help people. For those in the know, the issues surrounding balance billing run deeper than this. But all that aside, change that will protect US consumers from expensive bills is now imminent.

Enter the No Surprises Act – a nifty new piece of legislation that is set to arrive as the clocks slide into the early hours of 1 January 2022. It aims to revolutionize the US healthcare system by adapting the approach to emergency medical billing, establishing new protections from surprise billing and excessive cost sharing for consumers receiving healthcare services. Or, as a CMS spokesperson neatly put it: “No one should have to go bankrupt over surprise medical bills. The goal of the No Surprises Act is simple: to give people a better deal from a more competitive healthcare system.”

Gathering data on air ambulance service costs

Specifically for the air ambulance industry, the No Surprises Act restricts surprise billing for patients who receive emergency air ambulance services from OON providers. It also requires air ambulance operators to submit data on the costs of providing emergency air transportation – that includes operating costs, frequency of balance billing and average payment amounts.

This information will all be gathered up over the course of four years by the US government’s healthcare and public service watchdog, the HHS. The overarching objective of this being to establish the median in-network rate, or QPA – Qualifying Payment Amount for the service in that geographic area, which can then be applied to out-of-network assistance cases. The data could also help settle disputes between payers and providers, CMS told AirMed&Rescue. Or at least that’s the consensus on one side of the fence.

Tensions pick up as the deadline draws closer

While the goal of the No Surprises Act has generally received a humble reception, in some ways, it has also been a rather damning ruling for the air ambulance industry.

Back in November, The Association of Air Medical Services (AAMS) filed a lawsuit challenging the interim final regulations of the No Surprises Act that would allow QPAs to play a leading role in determining payment rates between insurers and providers. AAMS insisted that insurers would be able to leverage QPA against future payments, lowering all payments over time, and this could have an adverse effect on access to care for patients. “By building this process in favour of the payor, our healthcare systems will suffer through reduced payments for necessary services, deepening an ongoing public healthcare crisis,” Cameron Curtis, President and CEO of AAMS, said at the time.

Hefty fines for No Surprises rulebreakers

But it’s not all about arbitration. AirMed&Rescue spoke to CMS to find out how the legislation is to be regulated going forward. The government organization explained that under the No Surprises Act, states will be the primary enforcers of new requirements. In states that do not have the authority to enforce federal requirements, or else ‘fail to substantially enforce one or more of the provisions’, HHS will take over enforcement responsibilities. HHS, as we already know, is also collecting the data on air ambulance costs to establish a fair standard pricing model.

And while HHS will be carrying out compliance checks on providers in certain states, a notice of proposed rulemaking (NPRM) set out in September 2021 stipulates that CMS will be able to determine whether a state is substantially enforcing Public Health Service (PHS) Act requirements with relation to providers (including air ambulance services). What this essentially means is that there is very little room for inconsistent enforcement across the US.

The NPRM also asserted that a process would be created for initiating investigations and determining whether a medical provider, facility, or provider of air ambulance services is in violation of a PHS Act requirement. Lawbreakers could face fines of up to US$10,000 per violation, CMS explained. And air ambulance providers that fail to submit data on their services could face further fines of up to $10,000.

In defence of air ambulance costs

The trouble is that air ambulance services come at a premium, and reimbursement rates are not tied to today’s actual costs of providing services.

Critical situations call for critical response operations, and these events arise surprisingly often. And with additional travel restrictions and health and safety requirements in place – maintaining invaluable air ambulance operations has been a veritable minefield. Even taking Covid-19 out of the equation, the level of expertise required for the life-threatening situations they serve naturally makes air ambulance services a costly affair.

Note, for example, the fact that the most common diagnoses associated with US-based rotary-wing air ambulance transport for the period 2016-2020 were cerebrovascular issues and diseases (including intracerebral hemorrhage, subarachnoid hemorrhage and other types of ‘brain bleeds’), followed by heart attacks and head injury. In the pediatric population, head injury, epilepsy and seizures were among the most common diagnoses. These are no low-level complications. It therefore stands to reason that between 2016 and 2020, patients transported by air ambulance were much more likely to be admitted as inpatients to a hospital than patients transported by ground ambulance were. Considering that time is of the essence for critical injuries and conditions, it goes without saying that an air ambulance is the most appropriate emergency transportation service for achieving the best patient outcome. It follows too then that cases flown in by air ambulance more often end up as inpatients. And yes, inpatient care will drum up a higher bill than outpatient (and again, this depends on the rates set out by that particular healthcare provider), but with critical conditions such as those identified above, a higher level of care and monitoring is required.

Will payor-provider partnerships become a staple?

Hopefully then, knowing the crucial role that these services play (and the inevitable cost of them), in line with the new regulation, we’ll begin to see an increased number of payor-provider partnerships, whereby cost sharing for emergency services will be determined on an in-network basis. This will hopefully help the industry absorb the costs of those more resource-heavy rescue missions. Otherwise, as some have noted, there is the possibility that consumers will feel the sting of this new legislation – depending on how often disputed bills go to arbitration, premiums could increase.

Addressing the holes in balance billing laws

Still, in the long run, as CMS noted, these new rules will help the US healthcare system ‘better identify pressure points for high surprise costs’, in addition to taking consumers out of the middle of surprise bill disagreements and providing important protections for those who are uninsured or self-pay for care.

“These protections could not be more critical,” CMS told AirMed&Rescue. “Individuals with surprise bills may have to spend more out-of-pocket because they have to pay their OON cost sharing and surprise billing amounts regardless of whether they’ve met their deductible and maximum out-of-pocket limits.”

If you feel that you’re getting a case of déjà vu at this point, you wouldn’t be wrong. Back in 2020, a law banning non-contracted air ambulance providers from balance billing insured patients was passed. However, as CMS noted, these laws were only enacted across certain states, and even then, these protections did not apply to individuals enrolled in self-insured health coverage, as federal law generally pre-empts state laws that regulate self-insured group health plans sponsored by private employers. “In addition, states have limited power to address surprise bills that involve an out-of-state provider and providers of air ambulance services,” CMS said.

Keep the discussion going

For air ambulances specifically, especially in the short term, they’re going to need to consider how they capture data on service prices, whether that means working with tech companies to install a system that allows them to stay up to date on data submissions – so as to avoid getting penalised by HHS – or else working with a ‘middle man’ to agree upon realistic rates with insurers and avoid cases of arbitration.

As for the US healthcare system, an argument could be made for moving towards more preventative care practices – if citizens aren’t discouraged from seeking out care before a condition advances to a critical stage, the number of cases of emergency assistance operations would inevitably decrease. Of course, this is an approach currently being channelled by a number of healthcare institutions, but it will be some time before we see the fruits of that labor on any large scale.

No, for now, we turn to the air ambulance industry – inter-industry discussions and open communication will be key going forward. As long as the common goal is to improve access to healthcare for US citizens, between them, payors, providers and governmental organizations should be able to come to a resolution that is economical for all parties involved – it may just be a bit choppy getting there.