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Patient Care

Wyo. Bill Proposal Aims to Lower Air Ambulance Costs

Casper Star Tribune, Wyo.

Wyoming lawmakers are proposing moving many Wyomingites under Medicaid's coverage when it comes to one specific and often costly medical service: air ambulances.

"We've gotta come up with other ways to deal with it," Rep. Eric Barlow, the bill's sponsor and a Republican from Gillette, said Monday. "It's needed health care, but it's gotten to a place where it's just not affordable or accessible."

Under the bill—designated House Bill 194—the state would ask the federal Department of Health and Human Services and the Centers for Medicare and Medicaid Services to allow it to move air ambulance coverage under the state Medicaid plan. The state would pay a minimum of 80 percent of each transport's cost, with the individual patient paying up to 20 percent of the ride.

"What we're trying to do is limit, if not eliminate, balanced billing," Barlow said, referring to the practice of patients receiving bills for medical services not covered fully by insurers.

He said the state would pay the air ambulance companies enough to cover their costs and to keep them interested in coming to Wyoming, as—he said—they're a needed service. But he said the state would not pay as much as the companies typically charge now.

According to a 2017 federal report, the average air ambulance ride from Air Methods—one of the largest operators in the nation that also flies in Wyoming—was over $49,000.

The question of how to pare down air ambulance costs is a difficult one to answer, primarily because of a 1978 federal law that prohibits states from regulating the transports. That law was the basis of a lawsuit against Wyoming and its Department of Workforce Services brought by Air Methods and three other companies. The state had attempted to cap how much money it would pay the companies for workers' compensation-related flights, but courts ruled that the federal law preempted any fee schedule.

Barlow said this bill would automatically include those insurers regulated by the state—including Blue Cross Blue Shield, which would be heavily affected. Other insurers could choose to opt in.
Multiple messages left for a Blue Cross Blue Shield spokeswoman were not returned Monday afternoon.

The bill would create an "air ambulance coverage account" to pay for the expanded coverage. The funding would be drawn from multiple sources, including a 0.75 percent tax on participating insurers' premiums and considerations. Barlow said the state would also draw federal funding because the bill would essentially expand Medicaid in a very limited scope, for one singular purpose.

The goal is to shield Wyomingites from facing financial hardship—if not ruin—as a result of an air ambulance ride.

"My belief is that an air ambulance is one of those things that a majority of Wyomingites can't afford," Barlow said.

Richard Mincer, a Cheyenne attorney who represented air ambulance companies during their litigation against the state, expressed some skepticism about the measure. He and several attorneys and officials close to labor expressed concern about another air ambulance bill before Barlow's committee, which would have allowed companies to balance bill Wyoming workers if they chose not to accept a roughly doubled Medicare rate. Barlow said that bill had been gutted and acknowledged it had been flawed.

"It's either a creative way to try to address the whole issue of air ambulance bills or it's a creative way to try to accomplish what they can't through the workers' comp system," Mincer said Monday of this latest effort. "I'm not sure which one it is from the committee's standpoint."

"If the reimbursement rate is enough, if the reimbursement rate was enough to make it work, well it's probably a good idea," he added. "But I don't think at this point that the Legislature is looking at the whole thing. I think they're looking at what they've read about what an average air ambulance ride costs and they're not factoring in how much of the people that are transported pay much less than what it costs and what that all ends up meaning."

He pointed to a recent article in Aviation International News, a monthly publication that covers the air industry, that quoted an Air Methods executive as lamenting the low reimbursement pay of Medicare and Medicaid patients. That low pay, the executive and Mincer argued, explained why insured patients who ride air ambulances are charged as much as they are: In order to stay open, the companies have to charge the privately insured more to balance out the low amounts paid by the majority of patients.

The average flight costs between $6,000 and $13,000, according to the 2017 government report, which also quoted one company as saying that they had to increase prices 15 percent to grow revenue 3 percent.

Mincer said the air ambulance industry was not the "gold rush" it was made out to be. He disputed several claims made at the beginning of the bill about the high cost—and the effects of those costs—of transports.

Prices jumped significantly—by nearly 300 percent for Air Methods—between 2007 and 2016, according to the 2017 Government Accountability Office report. The number of actual transports has stagnated, but the number of aircraft has increased (industry officials told investigators this may be affected by rural areas, where more helicopters are needed to cover a wider area but with fewer people). Three large companies told government investigators that they charged an average price of $40,000 per flight.

Similarly, the industry is becoming increasingly consolidated, often under the umbrella of private equity firms. One provider was purchased four years ago for $2 billion. Air Methods announced in 2017 that it would be acquired for $2.5 billion.

"The presence of private equity in the air ambulance industry indicates that investors see profit opportunities in the industry," the report's authors wrote.

Further, the report states that air ambulance companies could charge what they liked, as the patients who used their services were typically not in a position to weigh one company's prices against another.

The report found that the majority of revenue for the large air ambulance companies comes from those with private insurance—a group that would largely fall under Barlow's Medicaid proposal. Between 2010 and 2014, three large insurers reported paying 70 percent more to air ambulance companies—from $15,600 in the earlier year to $26,600 in 2014.

At the very least, both Barlow and Mincer agree that Wyoming needs air ambulances. It's just a question of how to best serve that need.

Barlow said some have suggested waiting for a federal fix—for Congress to change the 1978 law that stops states from regulating the industry. But he said such a fix did not appear to be coming.
"We're probably millions of dollars away in cost to Wyoming consumers before anything even gets proposed there," he said, "much less accomplished."

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