Washington, D.C. 鈥� January 25, 2022 鈥� 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鈥檚 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). 熊猫视频argues in support of HHS鈥� legal arguments for its rules for implementing the No Surprises Act in relation to air ambulance transport, and that HHS鈥� cross-motion for summary judgment should be granted. Here are the highlights:
Air Ambulance Market Dysfunction Creates Perverse Incentive to Not Join Networks
鈥淧rotected 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. 熊猫视频 69-75% of air ambulance transports are out-of-network, compared to 51% of ground ambulance transports and 14-22% of emergency department services.鈥�
鈥淎ir ambulance providers have leveraged that out-of-network status鈥攁nd the associated ability, until now, to send surprise bills to patients鈥攖o 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鈥攂y even the industry鈥檚 estimate.鈥�
Qualifying Payment Amount (QPA) Rule Sensibly Addresses Market Dynamics
鈥淎ir ambulance services are distinct 鈥� given the dearth of in-network rates caused by providers鈥� 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鈥攁nd uniquely inflationary鈥攎arket dynamics.鈥�
鈥淣etworks鈥攁nd particularly in-network rates, as reflected in the QPA鈥攁re 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.鈥�
鈥溾�entering 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.鈥�
Private Equity Impacts the Air Ambulance Market, Too
鈥淥ver 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 鈥榠ncreas[ing] revenue.鈥� 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.鈥�
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鈥檚 amicus brief filed in Texas Medical Association v. the U.S. Department of Health and Human Services.
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