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November 14, 2019

This patient's surgery was fully covered by his insurance. So how did he wind up with an $11,000 bill?

Daily Briefing

    In 2018, 63-year-old Tom Saputo was transported via air ambulance to receive a life-saving double lung transplant, but while the operation was fully covered, the air ambulance ride was out of network and left Saputo with an $11,524.79 bill, Anna Almendrala reports Kaiser Health News.

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    Saputo's transplant

    In 2016, Saputo was diagnosed with idiopathic pulmonary fibrosis, a disease that scars the lungs, making it difficult for the patient to breathe.  

    Saputo went on a list for a double-lung transplant at UCLA, but before a transplant became available, Saputo suddenly stopped breathing.

    An ambulance drove Saputo and his wife Dana to Los Robles Regional Medical Center, where Saputo spent four days in the ICU, before he was transported to UCLA Medical Center by air ambulance.

    According to Almendrala, when Saputo first arrived to UCLA he was "on the brink of death." But in a stroke of good luck, the hospital had received a pair of donor lungs that matched Saputo and was able to provide him with a transplant. Two days after arriving at UCLA, Saputo was breathing normally again.

    The bill

    Saputo had some complications during recovery, "[b]ut the most unexpected setback was financial," Almendrala writes. And it wasn't due to the cost of the surgery.

    On the day of the surgery, the operation, including the surgeon, cost $40,575—all of which was covered by his insurer Anthem. But when Saputo saw the bill for the air ambulance, he learned the air ambulance company Mercy Air, which was out of network, had charged his insurance $51,282 for the flight. His insurance covered some of the charge, but he was left responsible for $11,524.79.

    Even though Saputo appealed to Anthem about the air ambulance charges twice, Mercy Air kept contacting Saputo, asking him to negotiate with Anthem about how much they would cover. The air ambulance company even called Saputo's daughter about the bill. "I have no idea how they even got her name or her number," he said.

    The resolution

    In January 2019, six months after Saputo's transplant, Anthem contracted with Air Methods, the helicopter operator that owns Mercy Air, to make the air ambulance company in network. But that decision did little to help Saputo who'd flown when the company was out of network. In August, Air Methods forgave Saputo's bill after ABC's "Good Morning America" and Kaiser Health News started looking into the case.

    Air Methods agreed that the process of billing Saputo was "long and arduous," but said that Saputo's insurer was the reason he faced high out-of-pocket costs.

    However, Anthem spokesperson Leslie Porras disagreed. She said the issue was with the air ambulance company's decision to be out of network. "The ability to bill the consumer for the balance provides little incentive for some air ambulance providers to contract with us," she said.

    Air ambulance rates climb

    According to an analysis by the Government Accountability Office, the median cost of a helicopter air ambulance flight was $36,400 in 2017, an increase of more than 60% from 2012, and two-thirds of those flights were out of network.

    According to Almendrala, air ambulance companies say the charges are necessary to compensate for low reimbursement rates from Medicare and Medicaid. Beneficiaries from the federal programs make up the bulk of air ambulance patients.  

    Air Methods said it would support legislation that would establish new Medicare reimbursement rates, as long as the adjusted rates are based on the industry's cost data. In the meantime, as long as the number of air ambulance helicopters continue to increase and the demand for them stalls, patients will still face rising air ambulance prices, according to Almendrala (Almendrala, "Shots," Kaiser Health News/NPR, 11/6).

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