Washington, D.C. – January 25, 2022 – No one should face a surprise medical bill that could lead to financial ruin, particularly those who require emergency transport by air ambulance. That was a central theme in AHIP’s amicus brief filed today in the DC District Court in Association of Air Medical Services v. the U.S. Department of Health and Human Services (HHS). AHIP argues in support of HHS’ legal arguments for its rules for implementing the No Surprises Act in relation to air ambulance transport, and that HHS’ cross-motion for summary judgment should be granted. Here are the highlights:
Air Ambulance Market Dysfunction Creates Perverse Incentive to Not Join Networks
“Protected from state regulation by a separate broadly written federal law, air ambulance providers have stayed outside of health plan networks at a greater rate than any other form of emergency care. About 69-75% of air ambulance transports are out-of-network, compared to 51% of ground ambulance transports and 14-22% of emergency department services.”
“Air ambulance providers have leveraged that out-of-network status—and the associated ability, until now, to send surprise bills to patients—to extract large payments from patients with commercial insurance. A presentation by the Association of Air Medical Service to the federal Air Ambulance and Patient Billing Advisory Committee showed that 70% of air ambulance revenue comes from the roughly 30% of their transports that are covered by commercial insurance, with privately insured patients and their health insurance providers paying more than double the cost of services—by even the industry’s estimate.”
Qualifying Payment Amount (QPA) Rule Sensibly Addresses Market Dynamics
“Air ambulance services are distinct … given the dearth of in-network rates caused by providers’ business models that turned on leveraging out-of-network status to increase charges before the Act. When establishing the QPA methodology for air ambulances, the Departments sensibly grappled with these unique—and uniquely inflationary—market dynamics.”
“Networks—and particularly in-network rates, as reflected in the QPA—are central to the No Surprises Act. Having largely relied on a business model that focused on remaining out-of-network for so long, air ambulance providers can hardly fault the Departments for implementing the QPA in a manner that reasonably responds to the dearth of air ambulance network agreements.”
“…centering of the [independent dispute resolution] IDR process around the fair and competitively negotiated QPA rates reduces the likelihood and costs of resolving disputes, furthers predictability and efficiency, and helps remedy a uniquely dysfunctional market dynamic that foisted supracompetitive air ambulance charges on patients for far too long.”
Private Equity Impacts the Air Ambulance Market, Too
“Over time, air ambulance providers have shifted from a non-profit hospital-based model to a model where air ambulance services are provided by a handful of independent for-profit firms, focused on ‘increas[ing] revenue.’ Private equity firms, in particular, have invested heavily in air ambulance providers and leveraged their larger market share, and the absence of meaningful regulation (until now), to aggressively raise prices. A 2020 analysis by the Brookings Institution found that carriers owned by private equity firms were charging 7.2 times Medicare rates, in contrast with non-private equity owned firms charging roughly 4.3 times Medicare rates.”
Association of Air Medical Services v. the U.S. Department of Health and Human Services (HHS) is just one of several complaints filed by providers against implementation of the No Surprises Act. Read AHIP’s amicus brief filed in Texas Medical Association v. the U.S. Department of Health and Human Services.
About AHIP
AHIP is the national association whose members provide health care coverage, services, and solutions to hundreds of millions of Americans every day. We are committed to market-based solutions and public-private partnerships that make health care better and coverage more affordable and accessible for everyone. Visit www.ahip.org to learn how working together, we are Guiding Greater Health.