How to Address Balance Billing
The SOAR campaign wants an immediate and durable solution to the problem of balance billing – we want to get patients out of the middle. To do this, all parties must come together to honestly address the underlying factors that result in balance billing, and adopt solutions that preserve access to emergency air medical services for all communities.
The underlying problem: Reimbursement rates that fail to acknowledge true cost of service
Every air medical provider must be able to deploy on a moment’s notice 24 hours a day, 7 days a week, 365 days a year. And when they are called in, air medical providers must deliver a high level of care to every patient. This type of life-saving service comes with significant costs, most of which are fixed. The unfortunate reality is that the reimbursement rates currently provided by government insurance (Medicare and Medicaid, in particular) and by many private insurance companies are drastically below the true costs of providing air medical services for patients.
In fact, 70% of air medical transports are under-reimbursed. The average Medicare reimbursement only covers 50% of actual transport costs. In some states, Medicaid reimburses for these transports as low as $200, which is less than half of the price of fuel alone for the average transport. If an air medical transport company is reimbursed substantially below cost for seven out of every 10 transports, it means that the remaining transports are essentially paying for the whole system.
If we do not acknowledge the problem, we will not find a workable solution.
The solutions: Fixing government reimbursement, and insurance companies coming to the negotiating table in good faith
The solutions are twofold: First, the drastically low reimbursements from the Centers for Medicare and Medicaid Services must be fixed. SOAR strongly supports the proposed federal legislation that would resolve the Medicare reimbursement shortfall by updating reimbursement rates, and supports efforts at the state level to address Medicaid rates.
Second, private insurance companies must do their part and be willing to reimburse for air medical transport services at a reasonable rate. While some insurers already do so, a large portion of them refuse to acknowledge the true cost of service, thereby blocking any chance of reaching fair, in-network agreements that would remove a huge burden from the shoulders of the patient. A recent study conducted in Montana showed that for only a $1.70 more per month in insurance premiums, emergency air medical transportation can be reimbursed in full without burdening patients with huge bills.