Understand how we got here — and how to move forward.


October 5, 2018

Congress wants to fix surprise air ambulance bills. Here's how.

Daily Briefing

    The Senate on Wednesday voted 93 to 6 to pass a transportation reauthorization bill (HR 302) that would increase reporting requirements for air ambulances.

    Air ambulance prices skyrocket

    Prices for air ambulances have risen "dramatically" since the industry's birth in the 1980s, Bloomberg reports. According to a Government Accountability Office (GAO) report, the average charge for a medical helicopter flight increased from $14,000 in 2010 to $30,000 in 2014. For one air ambulance company, Air Methods, the average charge increased from $13,000 in 2007 to $49,800 in 2016.

    The high prices have left some people with surprise, high medical bills. For example, a radiologist received a $56,603 bill after he was transported by medical helicopter to a trauma center to undergo surgery on his arm. In another case, a West Virginia family was charged $45,930 to transport their three-year-old son, West Cox, from Princeton Community Hospital to CAMC Women and Children's Hospital to treat his 107-degree fever.

    Bill details

    The bill contains a compromise provision by Sen. Claire McCaskill (D-Mo.) that would require HHS and the U.S. Transportation Department to create an advisory committee to examine the air ambulance industry. Among other things, the committee would discuss measures to increase price transparency, improvements to consumer education about air transport insurance coverage, and protections from surprise charges.

    The bill also would require air ambulance companies to include the Transportation Department's complaint hotline and website on all bills. The transportation secretary also would be required to develop an oversight plan for the industry and to issue guidance to states on how to handle billing complaints.


    Insurance stakeholders, patient advocates, and the medical air transport industry have praised the measure, but some experts say it's not clear whether the changes would resolve the billing problems, "Transformation Hub" reports.

    Julie Mix McPeak, president of the National Association of Insurance Commissioners and Tennessee insurance commissioner, said, "The Department of Transportation has regulatory authority and can determine whether the practices of any airline are fair or unfair, but they don't have expertise on medical billing practices."

    The Association of Air Medical Services (AAMS), the lobbying group for air ambulance companies, said, "We believe the formation of the advisory committee of stakeholders tasked with solving the complex issue of balance billing is a definite step in the right direction." However, the group said low Medicare reimbursements are to blame for high bills for non-Medicare patients. According to "Transformation Hub," Medicare reimburses $4,624 per transport, then an additional $31.67 per mile. AAMS said addressing the Medicare reimbursement rate is "the only lasting solution."

    However, some experts have pushed back against that argument. According to Modern Healthcare's "Transformation Hub," one expert who spoke on the condition of anonymity estimated that Medicare pays about 33% of the total cost of all air ambulance flights, commercial plans pay an additional 33%, and Medicaid pays about 20%. He said the problem is simply that air transport companies have too many helicopters.

    "In 1997 there were about 350 helicopters doing this," the expert said. "Today there are over 1,100." He added, "The problem is not that operating costs have dramatically increased; rather, companies cannot spread those costs over a reasonable number of flights" (Luthi, "Transformation Hub," Modern Healthcare, 10/2; Halsey, "Gridlock," Washington Post, 10/3; Mutzabaugh, USA Today, 10/3).

    Oct. 9 webconference: The top challenges facing revenue capture today

    As hospital leaders combat eroding margins, cash acceleration and contract integrity are more important than ever. Best-in-class organizations are doubling down on the revenue cycle, unlocking value by transforming into a core strategic asset.

    Join our revenue cycle experts to learn the top challenges facing revenue capture today.

    Register Now

    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.