Air Ambulances and Workers Compensation Summary
April 2017, NCCI presentation to the Workers’ Compensation (C)Task Force
Air Ambulance Memorial Study Report
January 2017, New Mexico Office of Superintendent of Insurance
Air Ambulance Regulation
April 2016, NAIC Government Relations Issue Brief
Air Ambulance: Effects of Industry Changes on Services are Unclear
September 2010, Government Accountability Office Report
Understanding Air Ambulance Insurance
NAIC Consumer Alert
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Last Updated 5/16/17
Issue: Air ambulances are used to quickly transport patients in life-threatening situations. Air ambulances are often helicopters equipped with medical equipment and staffed by medical professionals just like traditional ground ambulances. According to the Association of Air Medical Services, more than 550,000 patients in the U.S. use air ambulance services every year. Air ambulance services have grown significantly in recent years; in 2002 there were approximately 400 dedicated air ambulances, but by 2008 the number had more than doubled to over 800. Possible reasons for the growth of this industry include an aging population, a decline in the number of emergency departments in existing hospitals, and changes in the delivery of health care in rural settings. There are also concerns that such high growth in this industry may be an indicator of medically unnecessary use.
Costs for the average air ambulance trip run in the tens of thousands of dollars. These high costs can be attributed to maintenance of expensive equipment as well as the need to staff specialized medical personnel around-the-clock. Out-of-network air ambulance providers can leave patients enormous bills.
The Airline Deregulation Act of 1978 (ADA), originally passed with the intent of encouraging competition in the airline industry, prohibits states from regulating the prices air carriers charge. As such, any state laws passed to regulate the costs of air ambulance services are preempted by the ADA.
Background: Over the past decade, many states have reported issues with air ambulance providers not affiliated with any hospital or insurance carrier. This leaves patients in some areas with no in-network choices for life-saving care. Unlike air ambulance services, traditional ground ambulance services are regulated under the ACA as well as any applicable state laws.
In lieu of Congressional action on this issue, a few states have looked for alternative ways to help protect consumers from extremely high bills. A law in North Dakota requiring 911 operators to contact in-network air ambulance providers before out-of-network providers was struck down in 2016 on the grounds that the ADA preempts such legislation. A second bill, signed into law in April 2017, mandates that hospitals notify patients in non-emergency situations which air ambulance providers are in-network as well as addresses balance billing. Montana’s legislature also took action in 2017, considering legislation intended to impose taxes on air ambulance charges above allowable Medicare costs for providers that do not contract with any insurance networks, a bill to protect patients’ credit reports from certain unpaid bills, and a bill to regulate air ambulance “members” as insurance products.
This issue also affects workers compensation insurance as there is some question as to which law ultimately applies to air ambulance rates in a workers compensation situation – state workers compensation laws or the federal ADA.
Ultimately, federal legislation is needed to provide a workaround to the ADA.
Status: Senator Jon Tester of Montana has introduced S. 471 which carves out an exemption in the ADA for state regulation of air ambulances. This bill does not insert states in federal oversight of any other type of aviation. The NAIC supports this bill and is closely following its status in Congress. The Workers’ Compensation (C) Task Force received a report from the National Council on Compensation Insurance at the Spring 2017 National Meeting and continues to monitor air ambulance costs and their impact on workers compensation insurance.