It is time to negotiate air ambulance charges

Air ambulance flights — both by helicopter and plane — save many lives each year. But for most payers and self-funded employer plans, it’s an out-of-network charge that can be staggering.

Here are some recent examples:

· In 2015, Oklahoma State University basketball coach Tommy Wade suffered a heart attack and was flown from Stillwater to a hospital in Oklahoma City. The air ambulance charge for the 20-minute flight: $38,000. Wade’s insurance company paid what it felt was a fair charge, but that left Wade with the balance of the bill. His case is now part of a class-action lawsuit against the transport provider. One of the attorneys handling the case notes that some air ambulance companies are “making profit margins in excess of 750%.”
· As reported last year on National Public Radio, one Montana family was charged $56,000 to have their infant daughter flown from Butte, Montana to Seattle for medical treatment. The family was on the verge of hiring a lawyer to contest the charges when their insurance company reluctantly paid the full amount.

· Rancher Clarence Kendall was sued by an air ambulance company when he was unable to pay his $47,000 bill for transport from Pearce, Arizona to a hospital in Tucson.

Federal law prevents states from limiting aviation rates, routes and service terms. An air ambulance bill usually has two parts: the lift-off fee (which NPR says can be as high as $15,000 in Montana) and a per-mile charge.

Air ambulance providers argue that they’re forced to cover the cost of 24/7 readiness to remain profitable. But that makes it difficult to negotiate in-network deals.

Here are several solutions that every payer and self-funded employer should consider:

· Employers should request regular reporting on air ambulance charges and discounts (if any). Highly utilized providers should be approached for in-network participation or a letter of agreement.
· Follow the lead of some Fortune 100 companies and their payers/TPAs who are negotiating agreements to pay just 50% of air ambulance charges. Even getting a 10% or 20% discount can still be significant.
· Whenever possible, negotiate air ambulance deals with hospitals that have their own helicopters. These providers generally charge less and offer better discounts than commercial providers.
· Offer employees optional air ambulance coverage. An annual premium or membership fee is usually less than $100, and covers all emergency transport charges for each participating employee.

Now is the perfect time to begin negotiating more equitable air ambulance rates. Both Maryland and Montana are holding legislative investigations into the high pricing in their states. The subject is becoming top-of-mind, especially in rural states that have fewer tertiary care hospitals and Level One trauma centers.

Proactive negotiations with air ambulance providers can prevent the PR nightmare of employees who receive lifesaving treatment only to get an exorbitant bill for their transport.

Randy King is president of Healthcare Horizons in Knoxville, Tennessee, the industry leader in claims auditing for self-insured employers.

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