a report on disclosures and distinction of charges

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A Report on Disclosures and Distinction of Charges January 2021 BY THE AIR AMBULANCE AND PATIENT BILLING ADVISORY COMMITTEE’S SUBCOMMITTEE ON DISCLOSURES AND DISTINCTION OF CHARGES AND COVERAGE FOR AIR AMBULANCE SERVICES Gregory D. Cote, DOT, Chair Dr. Michael K. Abernethy, University of Wisconsin School of Medicine and Public Health, as representative of physicians. Dr. Kevin Hutton, Golden Hour Data Systems, as representative of physicians. Kyle Madigan, Dartmouth Hitchcock Advanced Response Team, as representative of nurses. Edward R. Marasco, Quick Med Claims, as representative of billing service providers. Rogelyn McLean, U.S. Department of Health and Human Services, as the Secretary of Health and Human Service’s designee. Asbel Montes, Acadian Ambulance Service, as representative of the air ambulance industry. Dr. David P. Thomson, East Carolina University, as representative of physicians. Blane Workie, DOT, Designated Federal Officer

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TABLE OF CONTENTS

Executive Summary of Recommendations ............................................................................................... 3

Chapter 1. Overview ..................................................................................................................................... 4

1.1 Introduction ......................................................................................................................................... 4

1.2 Scope of Subcommittee ...................................................................................................................... 5

1.3 Meetings and Process of the Subcommittee........................................................................................ 5

Chapter 2. Disclosures .................................................................................................................................. 7

2.1 Background ......................................................................................................................................... 7

2.2 Pre-Purchase Disclosures from Payors to Consumers ...................................................................... 10

2.3 Point-of-Care Disclosures ................................................................................................................. 12

2.4 Claims-Related Disclosures .............................................................................................................. 14

2.4.1 Payor Disclosures .................................................................................................................. 14

2.4.2 Air Ambulance Provider Disclosures to Patients .................................................................. 17

2.5 Subscription Program Disclosures to Patients .................................................................................. 18

Chapter 3. GAO Recommendations on Disclosures ................................................................................... 19

Chapter 4. Distinguishing Between Charges for Air Transportation and Non-Air Transportation Services .................................................................................................................................................................... 22

APPENDIX A. Glossary of Terms Used Throughout the Report .............................................................. 28

APPENDIX B. SBC Forms ........................................................................................................................ 30

APPENDIX C. Form Based on ABN ......................................................................................................... 33

APPENDIX D. Sample Website Disclosures for Air Ambulance Providers .............................................. 34

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Executive Summary of Recommendations Section 418 of the FAA reauthorization Act of 2018 (FAA Act) directed the U.S. Department of Transportation (Department or DOT) to establish an Air Ambulance and Patient Billing Advisory Committee (Advisory Committee) tasked with developing recommendations on a variety of topics, including the disclosure of charges and fees for air ambulance services and insurance coverage. In 2017, the Government Accountability Office (GAO) found that individuals with private insurance are often billed a higher amount for medical air transport than the amount covered by their insurance.1 GAO recommended that the Department consider consumer disclosure requirements for air ambulance providers, which could include information such as established prices charged, the business model and entity that established prices, and the extent of an air ambulance provider’s contracting with insurance providers. The Subcommittee believes that increasing and enhancing disclosures regarding air ambulance services will result in more transparency and a better understanding of the air ambulance industry. It recognizes that disclosures benefit not only consumers, but also others such as insurance providers and air ambulance companies. To that end, the Subcommittee has developed comprehensive recommendations intended to address challenges in understanding air ambulance coverage, costs, and billed charges through enhanced disclosures. The Subcommittee also considered the feasibility of distinguishing between air transport and non-air transport charges on air ambulance bills, as well as disclosures that could increase consumers’ understanding of insurance coverage and air ambulance subscription programs, on which the FAA Act also mandated the Advisory Committee to consider recommendations. The Subcommittee presents the following recommendations for the Advisory Committee to consider and adopt: • Pre-Purchase Disclosures – The Subcommittee recommends that the U.S. Department of

Health and Human Services (HHS) conduct rulemaking to require payors (defined as private health insurance companies or self-funded group health plans) to disclose air ambulance coverage, cost, and network information within Statements of Benefits and Coverage.

• Point-of-Care Disclosures – The Subcommittee recommends that HHS conduct rulemaking to require entities that request non-emergency air ambulance transport to provide notice to consumers regarding potential transport charges that may not be covered by insurance.

• Claims-Related Disclosures – The Subcommittee recommends that HHS and other agencies conduct rulemaking to require payors (defined as private health insurance companies or self-funded group health plans) to disclose information to patients and providers explaining the payor’s denial of a claim for air ambulance charges and providing options for recourse. The Subcommittee also recommends that DOT conduct rulemaking to require air ambulance providers explain the charges to patients, as well as options for recourse.

1 U.S. Government Accountability Office, GAO-17-637, Air Ambulance, Data Collection and Transparency Needed to Enhance DOT Oversight (2017). GAO found that some air ambulance providers reported adjusting their charges to receive sufficient revenue from private health insurance to account for certain under-paid transports such as those covered by Medicare and Medicaid. See id. at 7–8 and 17–18.

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• Air Ambulance Subscription Programs – The Subcommittee recommends that relevant stakeholders work together to develop best practices and standards for disclosures of information on subscription programs by air ambulance providers to consumers, including coverage information.

• Air Ambulance Disclosures Recommended by GAO – The Subcommittee recommends that DOT conduct rulemaking to require air ambulance providers to disclose on their websites information regarding base and certain ancillary rates and the providers’ in-network status with payors. The Subcommittee declines to adopt GAO’s other recommendations regarding disclosure of air ambulance provider business models.

• Distinction of Air Transport/Non-Air Transport Charges – The Subcommittee does not recommend that air ambulance providers distinguish air transport and non-air transport charges on consumer bills or claims to insurance providers, or provide cost allocation information related to air transport and non-air transport costs. The Subcommittee finds that such a recommendation would raise practical concerns and generally lead to negative impacts on all stakeholders, while generating only limited benefits for some stakeholders.

Chapter 1. Overview

This report of the Advisory Committee is provided in response to the mandates in section 418 of the FAA Act and does not reflect the viewpoint or policies of any element of DOT, HHS, or the rest of the Administration. To the extent that the report contains proposed changes to Federal law, the DOT member and HHS member of the Advisory Committee abstained from voting on the proposed changes. The Administration is not proposing changes to Federal laws at this time. If, in the future, the Administration determines a need for statutory changes in this area, DOT or HHS will so advise Congress. 1.1 Introduction On October 5, 2018, President Trump signed the FAA Act. Section 418 of the FAA Act requires the Secretary of Transportation, in consultation with the Secretary of HHS, to establish an advisory committee to review options to improve the disclosure of charges and fees for air medical services, better inform consumers of insurance options for such services, and protect consumers from balance billing. In September 2019, the Secretary established the Advisory Committee. The Advisory Committee held its first plenary session in January 2020. Recognizing that Congress directed the Advisory Committee to make recommendations on a broad range of topics, the Secretary of Transportation created three distinct and narrowly framed subcommittees in February 2020: the Subcommittee on Disclosure and Distinction of Charges and Coverage for Air Ambulance Services (“Subcommittee”); the Subcommittee on State and DOT Consumer Protection Authorities; and the Subcommittee on Prevention of Balance Billing. Each subcommittee consists of some members of the Advisory Committee, as well as other experts and advisors.

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1.2 Scope of Subcommittee The scope of the Subcommittee is drawn from the FAA Act and covers the following subjects:

1. Disclosure of charges and fees for air ambulance services and insurance coverage (including GAO recommendations to consider consumer disclosure requirements for established prices charged, business model, entity that establishes prices, and extent of contracting with insurance);

2. Improving explanations of insurance coverage and subscription programs to consumers; and

3. Costs, benefits, practicability, and impact on all stakeholders of distinguishing clearly between charges for air transportation services and charges for non-air transportation services in bills and invoices, including the costs, benefits, and practicability of developing cost-allocation methodologies for air/non-air transportation charges and formats for bills to distinguish between air/non-air transportation charges.

1.3 Meetings and Process of the Subcommittee The Subcommittee held eight full-day meetings between July 2020 and November 2020. Due to the COVID-19 public health emergency, the Subcommittee’s meetings were held virtually. The meetings are summarized as follows: Meeting on June 24, 2020: The Subcommittee held its first meeting on June 24, 2020. During the meeting, DOT staff offered potential definitions of several terms. The members discussed these terms and whether the Subcommittee should define them for the Advisory Committee. A presentation by a representative of America’s Health Insurance Plans (AHIP) led to a discussion on appropriate language, timing, and method of insurer disclosures regarding air ambulance services. A representative of DOT also shared a presentation regarding various State disclosure requirements for healthcare providers and pending Federal bills that propose additional disclosure requirements. Following these presentations, the Subcommittee discussed potential recommendations for disclosures by insurers/payors during the pre-plan purchase timeframe. The Subcommittee also discussed potential recommendations for disclosures at the point-of-care and during after-care time periods, as well as the content and form of the disclosures. Meeting on July 15, 2020: During the second meeting, the Subcommittee continued discussing potential recommendations for disclosures at the point-of-care and during after-care time periods, as well as the content and form of the disclosures. The Subcommittee also developed a general framework for disclosure recommendations, and a subcommittee member presented information on various State disclosure requirements for air ambulance providers, followed by a DOT staff presentation on a GAO report noting generally that DOT should consider fare transparency for air ambulance providers. Meeting on August 5, 2020: At the third meeting, the Subcommittee discussed claims-related disclosures to patients made by payors and air ambulance providers and identified the usefulness

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of such disclosures in three different situations. The Subcommittee also noted that the types of disclosures that are helpful differ depending on whether the recipient is a patient or a provider. The Subcommittee also discussed the readability and complexity of the language recommended for patient disclosures. The Subcommittee concluded the meeting after discussing GAO’s disclosure recommendations. Meeting on August 26, 2020: During the fourth meeting, the Subcommittee received feedback from a representative of AHIP on the Subcommittee’s draft disclosure recommendations and agreed to revise the language in the draft recommendations to ensure they accurately describe the type of specific disclosures the Subcommittee intended. The Subcommittee also continued discussing GAO’s disclosure recommendations, focusing on GAO’s recommended disclosure of the “established prices charged” and the “extent of contracting with insurance.” The Subcommittee subsequently received a presentation from the Executive Director of the Association of Critical Care Transport (ACCT) and CEO of LifeFlight Eagle (an air ambulance company), who discussed air ambulance subscription programs. A presentation followed from the Assistant Director for Health Policy for the National Association of Insurance Commissioners (NAIC), who spoke about the limitations of air ambulance subscription programs, including what generally is and is not covered, and the need to disclose this information. Meeting on September 16, 2020: During the fifth meeting, the Subcommittee discussed potential revisions to its draft recommendations for pre-purchase and claims-related payor disclosures. For pre-purchase disclosures, the Subcommittee considered a mock-up Summary of Benefits and Coverage (SBC), which incorporated some of the Subcommittee’s recommendations for payor disclosures. The Subcommittee also discussed the concept of essential health benefits (EHB) and whether air ambulance services qualify as an EHB. The Subcommittee also continued discussing the GAO disclosure recommendations, and a Subcommittee member provided an overview of his January 2020 presentation to the Advisory Committee regarding split billing and issues relating to separating aviation costs from the health care costs in the air ambulance context. Following this, the Subcommittee discussed a framework for its consideration of issues relating to distinguishing air transport and non-air transport charges. Meeting on October 7, 2020: During the sixth meeting, the Subcommittee continued its discussion of a mock SBC form incorporating its recommended disclosures. The Subcommittee also discussed potential benefits (positive impacts), costs (negative impacts), and practicability on all stakeholders of distinguishing transport and non-transport costs in bills and invoices, as required by the FAA Act. The Subcommittee then re-examined whether to recommend disclosure of base rates by air ambulance providers as proposed by GAO, and discussed what a base rate generally includes. The Subcommittee also considered options for how air ambulance providers could display their rates. Meeting on October 28, 2020: During its seventh meeting, the Subcommittee reviewed and revised its draft recommendations for pre-purchase, point-of-care, and claims-related disclosures, as well as its recommendations for air ambulance subscription programs and the air ambulance disclosures recommended by GAO. The Subcommittee also reviewed the sample disclosure

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forms corresponding with its recommendations. The Subcommittee also identified terms to define to provide context and clarity for the recommendations. Meeting on November 18, 2020: At its final meeting, the Subcommittee reviewed and finalized each set of recommendations and corresponding exemplars. During this process, the Subcommittee made minor revisions to its recommendation and analysis regarding the distinction of air transportation and non-air transportation charges. The Subcommittee also discussed and confirmed the authority of HHS, DOT, and other agencies to regulate various disclosure requirements. Chapter 2. Disclosures

2.1 Background Section 418 of the FAA Act directs the Advisory Committee to develop recommendations with respect to “disclosure of charges and fees for air ambulance services and insurance coverage . . . .” In relevant part, section 418 also states that the Advisory Committee’s recommendations must address, at a minimum, the costs, benefits, practicability, and impact on all stakeholders of clearly distinguishing between charges for air transportation services and charges for non-air transportation services; options, best practices, and identified standards to prevent instances of balance billing, such as improving explanation of insurance coverage and subscription programs to consumers; recommendations made by the Comptroller General study, GAO-17-637; and other matters as determined necessary or appropriate. To address this task, the Subcommittee reviewed and discussed various disclosures that are currently required of or proposed for air ambulance providers and payors, including proposed State and Federal legislation and recommended disclosures identified in GAO-17-637. After carefully considering the issue of disclosure of air ambulance charges and fees, the Subcommittee determined that appropriate disclosures will differ depending on the type of entity that makes the disclosure, which could include payors (defined by the Subcommittee as a health insurer or a self-funded group health plan), medical professionals and others who may request air ambulance services on behalf of patients, and air ambulance service providers. The Subcommittee also considered the appropriate recipient for each disclosure, and concluded that some information may benefit multiple entities, including patients and air ambulance providers, with some variation in the type and format of the information disclosed. The Subcommittee determined that enhancing current disclosure requirements in the healthcare and insurance context (e.g., the Statement of Benefits and Coverage) could increase transparency and understanding of coverage, charges, and bills, specifically with respect to air ambulance services. The Subcommittee also determined that enhancing existing disclosure documents, when possible, can provide benefits at minimal increased cost to regulated entities. Presently, some disclosures relating to air ambulance service and coverage are mandated and regulated at both the State and Federal level. Based on its statutory authority to investigate and prohibit unfair and deceptive practices and unfair methods of competition in air transportation,

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DOT has required various consumer disclosures applicable to U.S. and foreign air carriers2 and ticket agents. These include requirements that an indirect air carrier (i.e., entities that indirectly hold out air transportation to be operated by a direct air carrier)3 identify the corporate name of the direct air carrier operating the flight in any advertisements and prior to entering a contract with a consumer.4 Other disclosure requirements include a requirement that air carriers disclose information relating to code-sharing arrangements and the identity of the operating carrier,5 and a requirement that air carriers adopt and disclose customer service plans.6 In addition, DOT compiles and publishes its monthly Air Travel Consumer Report, which includes information about complaints received by DOT. GAO notes that the information disclosed to consumers in the Air Travel Consumer Report is “intended to enable consumers to make informed decisions on tradeoffs when selecting flights, considering such factors as provider, service quality, and price.”7 Although DOT has these existing disclosure requirements in place, DOT’s disclosure requirements are not specific to air ambulance providers and, in many cases, may not apply in an air ambulance context. For example, DOT’s customer service plan requirements are applicable only to carriers that offer scheduled or public charter service using aircraft designed to have a seating capacity of at least 30 passengers.8 Several States also require air ambulance providers to disclose information to patients.9 Montana, for example, requires out-of-network non-hospital-based air ambulance providers to disclose any relationships or financial relationships with healthcare providers, insurers or health plans. The disclosures must be filed with Montana’s Department of Public Health & Commissioner of Insurance by July 1st of each year and any changes must be filed within five days. In Kentucky, licensed ground and air ambulance services must provide and post a comprehensive fee schedule, and these must be updated annually or within 15 days of fee schedule modifications. Michigan requires several disclosures be made by air ambulance operators before they transport non-emergency patients. These disclosures include information

2 As defined in 49 U.S.C. § 40102(a)(2) and (a)(21), an “air carrier” is a citizen of the United States undertaking by any means, directly or indirectly, to provide air transportation, and a “foreign air carrier” is a person, not a citizen of the United States, undertaking by any means, directly or indirectly, to provide foreign air transportation. 3 The Department granted economic authority to indirect air carriers holding out air ambulance services through a blanket exemption (Order 83-1-36). Hospitals and other providers that hold out air ambulance services are considered indirect air carriers. 4 See, e.g., 14 CFR 380.30(a) (requiring solicitation materials for a Public Charter to include the name of the charter operator and the name of the direct air carrier), 14 CFR 380.32(b) (requiring the name of the direct air carrier in contracts between the charter operator and charter participants), and 14 CFR 295.24(a) (requiring air charter brokers to disclose the corporate name of the direct air carrier prior to entering a contract with a charterer). 5 14 CFR 257.5. 6 See 14 CFR 259.5. 7 U.S. Government Accountability Office, GAO-17-637, 26. 8 14 CFR 259.2 9 The Subcommittee was provided a general overview of various State disclosure requirements as context for the Subcommittee’s discussions. The Subcommittee is not opining on whether these State disclosure requirements are or are not consistent with Federal preemption laws.

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on whether an air ambulance is a participating provider in a patient’s health plan and a disclaimer that a nonemergency patient has the ability to travel by means other than a rotary wing aircraft. In addition, there are pending legislative initiatives that would require air ambulance provider disclosures in other States. There are also Federal requirements for disclosures relating to insurance coverage. The Patient Protection and Affordable Care Act (PPACA) requires the development and utilization of a uniform explanation of coverage document and standardized definitions. Regulations promulgated by the Department of the Treasury, the Department of Labor, and HHS require the issuers of insurance plans to provide a SBC to the insured.10 In addition, the regulations mandate that the SBC include, among other things, uniform definitions of standard insurance terms and medical terms so that consumers may compare health coverage and understand the terms of (or exceptions to) their coverage; a description of the coverage, including cost sharing, for each category of benefits; the exceptions, reductions, and limitations of the coverage; the cost-sharing provisions of the coverage, including deductible, coinsurance, and copayment obligations; coverage examples; and contact information for questions. Other disclosures that are required include the appeals process for denied claims and maximum out-of-pocket limits. While the SBC is a form of disclosure made upon a consumer’s application for insurance coverage and prior to the receipt of covered medical services, payors also send disclosures to patients after they receive medical services, generally in the form of an Explanation of Benefits (EOB). An EOB is a statement sent by the payor to the patient that explains what medical treatments or services were paid on behalf of the patient. While EOBs contain substantive notices that are required by Federal law, many States have specific EOB requirements that call for the inclusion of additional information. EOBs are typically required to include the following: the names of the payor and the patient; the service performed and the date of the service; the name of the person or place that provided the service; the provider’s billed amount; the payor’s allowed amount for the service; the amount the payor actually paid; and the amount the patient is responsible for paying to the service provider. In addition to insurance, some consumers/patients participate in air ambulance/EMS membership programs. These programs are designed to charge an annual fee to members in exchange for a financial benefit such as a discount on the services or even write-off of the entire bill. These memberships can vary in length, geographic scope, and benefits. For example, plans may cover the individual or everyone living in the household; ground transport, air transport or both; and may last for 1 year, 3 years, or a patient’s lifetime. Medicare/Medicaid requirements may impact these programs, and in some cases, such programs may also be covered by State regulations. Although these subscription programs have existed for years, State regulators have raised concerns about consumers’ knowledge of the membership coverage and its limitations (e.g.,

10 Section 104 of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104-191, directs the Secretary of the Treasury, the Secretary of Labor, and the Secretary of HHS to ensure that regulations, rulings, and interpretations relating to certain HIPAA provisions over which two or more Secretaries have responsibility are administered so as to have the same effect at all times. Section 104 also requires the coordination of policies relating to enforcing of these shared provisions. The shared provisions include laws governing group health plans and health insurance issuers offering coverage in the individual and group markets, including church plans. See 64 Fed. Reg. 70164-01 (Dec. 15, 1999).

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geographic coverage or reciprocity with other plans) and consumers’ understanding of their actual coverage needs (e.g., State and Federal laws prohibit charging Medicaid beneficiaries any out-of-pocket cost or cost-sharing amount for emergency medical services). To address these concerns, States have taken various actions such as banning subscription memberships, requiring certification, or regulating these programs as insurance. 2.2 Pre-Purchase Disclosures from Payors to Consumers The Subcommittee recognizes that health insurance providers already disclose covered services and benefits as required by the PPACA. However, the Subcommittee is concerned that many consumers do not carefully review this information prior to purchasing a plan, particularly on coverage of air ambulance services. As one subcommittee member stated, most people never anticipate needing an air ambulance service. GAO notes that “given the relative rarity of air ambulance transports, patients may not anticipate needing air ambulance transports and may not choose insurance plans based on which or how many air ambulance providers are in payors’ networks.”11 For those consumers who do look for air ambulance coverage, the current disclosures may not provide an accurate picture of their actual coverage or potential liability. For example, some plans may cover air ambulance services, but a consumer may not have any in-network providers in the area. In other cases, an air ambulance plan may state that it covers up to $10,000 for air ambulance service. To the consumer, this might seem like sufficient coverage, but as GAO notes, “[i]n 2017, the median price charged by air ambulance providers for a transport was approximately $36,400 for a helicopter transport and $40,600 for a fixed-wing transport,” according to its analysis of FAIR Health data.12 Based on these discussions, the Subcommittee determined it is important for information about coverage of air ambulance services to be clear and simple. The Subcommittee determined that adding specific information to the SBC about air ambulance coverage is likely the best way to provide this information to consumers and other stakeholders. Recommendations

Entity Responsible for Disclosure

• The Subcommittee recommends that payors provide disclosures about air ambulance coverage during the pre-purchase period of insurance policies.

Form13

• The Subcommittee recommends that payors’ pre-purchase disclosures be incorporated into the SBC, if applicable, and into the approved SBC template offered by CMS on its website.

11 GAO-19-292, 8. 12 GAO-19-292, 17. 13 A sample SBC form that incorporates these recommendations can be found in Appendix B.

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• The Subcommittee recommends that statutory authority be granted to HHS, the

Department of Labor, and the Department of the Treasury (the Departments) to enable them to promulgate regulations that will permit the SBC to be expanded in length and to include the Subcommittee’s recommended disclosures.

• The Subcommittee recommends that once the statutory authority described above is

granted, the Departments initiate rulemaking to require the payor pre-purchase disclosures recommended by the Committee. If the rulemaking is not initiated within one year of Congress granting such authority, the Subcommittee recommends that Congress require the Departments to do so through legislation.

Content The Subcommittee recommends that payors disclose the following information in the SBC form: • A new row should be added to the SBC table of important questions. In the “Important

Questions” column of this new row, the text “Are air ambulance services covered?” should be displayed. In the column “Answers” on that same row, the payor should disclose whether the plan covers air ambulance services. If the plan covers air ambulance services, the payor should state “Yes” and list the air ambulance providers that are in-network or provide a means for the patient/consumer to obtain such information (e.g., a web address or a toll-free phone number). If the plan’s network does not include air ambulance providers, the payor should expressly state that no air ambulance providers are in-network. In the “Why this Matters” column on that same row, the payor should provide notice of the percentage of the maximum allowable amount for covered services that the plan will pay if the patient/consumer uses an air ambulance provider that is in-network. In the same column, the payor should provide notice to the consumer that if an out-of-network air ambulance provider is used, the plan will only pay what is considered the maximum allowable amount for the service and that the patient/consumer may be responsible for paying any amount owed that exceeds the maximum allowable amount. The payor should also provide a web link and phone number that the patient/consumer can use to obtain more information about the maximum allowable amount.14

• A new row should be added to the SBC table of important questions. In the “Important

Questions” column of this new row, the text “What is the average air ambulance bill?” should be displayed. In the column “Answers” on that same row, the payor should disclose the dollar amount of the average air ambulance bill charged by participating (in-network) providers and charged by non-participating providers based on the consumer’s state or region. In the column “Why this Matters,” the payor should provide notice that the average billed amount for the plan’s in-network providers is not representative of what the consumer will pay, and that the most the consumer would pay is subject to the consumer’s deductible

14 One Subcommittee member, although joining this recommendation generally, expressed concern that making information on maximum allowable amounts accessible only through a link or telephone number adds an unnecessary step for consumers and lessens the likelihood that consumers will access the information when making pre-purchase insurance decisions.

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and/or out-of-pocket limit for in-network providers. The payor should also provide notice that the average billed amount for non-participating providers includes only the average balance bill that is not included in the consumer’s annual deductible or out-of-pocket limit.

• In the SBC’s table of common medical events, in the row labeled “If you need immediate

medical attention,” under the column “Services You May Need,” the text “Emergency medical transportation” should be revised to state “Emergency air and ground medical transportation.” In the same row, under the column “Limitations and Exceptions,” text should be added stating that emergency services, including emergency ground and air ambulance services, are an essential health benefit.

• In the SBC’s table of common medical events, in the row labeled “If you have a hospital

stay,” under the column “Service You May Need,” a new sub-row should be added with the text “Air Ambulance.” In this sub-row, the payor should disclose in the appropriate columns information on costs that are the patient’s responsibility for using a participating and non-participating provider, and in the “Limitations and Exceptions” column, the payor should disclose that preauthorization of services may be required.

Frequency • The Subcommittee recommends that this disclosure be updated periodically to reflect any

changes in plan benefits or the composition of the plan’s provider network. A sample SBC reflecting the Subcommittee’s recommendations can be found in Appendix B. Contextual Definitions

For context, the Subcommittee has adopted definitions for the following terms used in the

recommendations above (see Glossary, Appendix A, or click on the terms below):

Payor, Network, Emergency, Provider, Supplier 2.3 Point-of-Care Disclosures Due to the emergency nature of most air ambulance transports, it is not always possible or appropriate to provide insurance disclosures to patients at the point-of-care. Therefore, the Subcommittee’s analysis and discussion about point-of-care disclosures focused on non-emergency situations. In non-emergency situations, such as transports for convenience of a patient or doctor, there generally is time to provide disclosures to patients prior to the air ambulance transport. In addition, most insurance plans require pre-authorization for services in non-emergency situations for the transport to be covered by the plan.15 In these non-emergency 15 HealthCare.gov defines preauthorization as “A decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency.

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situations, providing disclosures to the patient regarding the air ambulance transport ensures that the patient has a full picture of the service to be provided as well as their resulting potential financial liability. Recommendations The Subcommittee recommends that point-of-care disclosures be required in non-emergency situations only. Entity Responsible for Disclosure • The Subcommittee recommends that this disclosure be made by the entity that requests the

non-emergency air ambulance transport, usually hospitals and other healthcare providers. Form

• The Subcommittee recommends that the entity making Point-of-Care Disclosures may use

the disclosure form attached to this recommendation,16 which is based on the Advanced Beneficiary Notice of Noncoverage (ABN) for Medicare patients, or any other form, provided that the following information is disclosed: a) Service or procedure that may not be covered, b) Reason why the service or procedure may not be covered, and c) Estimated charge.

• The Subcommittee recommends that HHS initiate rulemaking to promulgate regulations

requiring the point-of-care disclosures recommended by the Committee. If the rulemaking is not initiated within one year of the adoption of the recommendation by the full Committee, the Subcommittee recommends that Congress require HHS to do so through legislation.

Content The Subcommittee recommends that Point-of-Care Disclosures include the following information: • When a non-emergency air ambulance transport is medically necessary and the patient can

seek preauthorization for the transport’s coverage, the patient should receive information on the price of the air ambulance transportation.

• When an air ambulance transport is not medically necessary, but requested based on

convenience (“Convenience Transfer”), the patient should receive information on the price of

Preauthorization isn’t a promise your health insurance or plan will cover the cost.” https://www.healthcare.gov/glossary/preauthorization/#:~:text=Get%20Answers-,Preauthorization,medical%20equipment%20is%20medically%20necessary.&text=Your%20health%20insurance%20or%20plan,them%2C%20except%20in%20an%20emergency. 16 See “Point-of-Care Disclosure for Non-Covered Services” Form in Appendix C.

https://www.healthcare.gov/glossary/preauthorization/#:%7E:text=Get%20Answers-,Preauthorization,medical%20equipment%20is%20medically%20necessary.&text=Your%20health%20insurance%20or%20plan,them%2C%20except%20in%20an%20emergency.



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the convenience transfer and be notified in writing that he/she may be responsible for the full cost of the transport if it is not medically necessary.

• Contact information for the entity providing the form should be included. The form should also recommend the patient contact their payor.

A sample form modeled off the ABN and reflecting the Subcommittee’s recommendations can be found in Appendix C. Contextual Definitions



Charge, Emergency, Preauthorization, Medical Necessity 2.4 Claims-Related Disclosures The Subcommittee understands that many patients become aware of their air ambulance insurance coverage and limits after they have received the air ambulance service, usually when the patient receives either the EOB from their payor or when they receive a bill from the air ambulance provider. The Subcommittee acknowledges that each of these communications requires different patient responses and provides the patient with different information. Recommendation Entities Responsible for Disclosure • The Subcommittee recommends that both air ambulance providers and payors provide

claims-related disclosures concerning payment, coverage, denial, appeal, and preauthorization of air ambulance bills.

2.4.1 Payor Disclosures

Current disclosures made on an EOB can be difficult for patients to understand, especially in cases where a patient’s claim is fully or partially denied. Thus, the Subcommittee determined that payors should provide after-care disclosures separately from the EOB that are as simple as possible to minimize patient confusion. Because air ambulance transports are rarely isolated medical events, the patient may receive several EOBs for air ambulance and other medical services simultaneously. Currently, patients receive EOBs that display the codes for the service received, the health plan codes indicating whether the service is covered, and the amount paid, if any, on the claim by the payor. The Subcommittee discussed the difficulty patients frequently have in understanding why their insurance denied their claim or made only a partial payment on the claim. For example, an EOB may say that the claim was denied for lack of medical necessity, but the patient may not

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understand what that means. The Subcommittee recognized that the information in the current EOB is sufficient for some patients, but that many patients would benefit from additional information. The Subcommittee also discussed the difficulty that many patients experience navigating the health insurance arena, and that they may not know that they can call upon family or others to represent them in appeals of payor denials. In addition, patients often receive a check directly from their payor for a portion of the bill charged by an out-of-network provider. The Subcommittee is concerned about patient confusion regarding these direct payments and noted that some patients deposit and spend these payments without understanding their obligation to use the funds to pay the provider. The Subcommittee also noted that payors usually communicate with the air ambulance service provider as well as the patient, and that there is a need for air ambulance providers to receive additional information regarding payors’ decisions not to cover payment for their services. Although the communications are generally similar (e.g., whether the payor approved or denied the claim, and how much the payor will pay on the claim), the information needed by the air ambulance provider is different than the information needed by the patient. Further, the Subcommittee discussed how air ambulance providers may need additional disclosures from payors to understand the decision and to assist in contesting that decision or negotiating an additional payment amount. Recommendations

Content for Payor Disclosures • The Subcommittee recommends that payors should provide disclosures when they deny a

patient’s claim for lack of medical necessity, when they cover only a partial amount of the charges, when they submit payment to the patient directly, and when they deny a claim for lack of preauthorization.

• The content for this disclosure will differ depending on whether the disclosure is made to the patient or to a provider. a) The disclosure to patients should include the following in layman’s terms:

i) basic statements about why the payor denied the claim for lack of medical necessity or lack of preauthorization, or why the payor did not pay the claim in full;

ii) the amount the payor covered as an essential health benefit (EHB); iii) the amount of the bill for which the patient is responsible for paying and can expect to

receive a bill; iv) a statement that the patient has the right to assistance from an authorized

representative, which could include a family member, a lawyer, an organization, a health care or air ambulance provider, or any other person or entity the patient authorizes;

v) a statement that the patient has the right to have his/her claim processed in a timely fashion and to be kept informed about the status of the claim at reasonable intervals; and

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vi) a statement that any payment received by the patient directly from a payor is money owed solely to the air ambulance provider. It should also be written in large print that the payment represents a settlement payment in full with the patient’s payor and the patient will be responsible for and can expect to be billed for the remainder of the air ambulance bill, which should be estimated on the disclosure. A statement that failure to use this settlement as intended can lead to possible legal, tax, and credit reporting implications should also be prominent.

b) The disclosure to the provider should contain enough information to give providers notice reasonably calculated to inform them of the nature and basis for the action being taken (i.e., denial or partial payment) and to allow an opportunity to challenge the action and to avoid unfair surprise. Specifically, the payor should provide not only the code for the denial, but also the credentials of the reviewer and more detailed information about the basis for the denial. - For example, if the denial is because the patient was not taken to the nearest hospital,

the disclosure should identify the hospital that was closer to the patient and could have appropriately treated the patient at the time of the transfer. If the payor only makes a partial payment, the disclosure should include information explaining the basis for the amount of the payment, and whether the amount was based on usual and customary rates.

Form for Payor Disclosures • The Subcommittee recommends that the payor disclosures to the patient should accompany

the EOB as a separate document. Review for Payor Disclosures

• The Subcommittee recommends that HHS conduct a retrospective review after five years to ensure disclosure requirements of insurance providers are working as intended.

Implementation of Payor Disclosures

• The Subcommittee recommends that HHS, Labor, and Treasury initiate rulemaking to promulgate regulations requiring the claims-related disclosures recommended by the Committee for payors. If the rulemaking is not initiated within one year of adoption of the recommendation by the full Committee, the Subcommittee recommends that Congress require the Departments to do so through legislation.

Contextual Definitions



Payor, Provider, Preauthorization, Medical Necessity, Charge

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2.4.2 Air Ambulance Provider Disclosures to Patients Air ambulance providers also communicate with patients after they have received care, usually in the form of a bill. The Subcommittee realizes that patients may not expect to receive a bill from the air ambulance provider and may become confused or upset as a result. To assist the patient in comprehending the air ambulance bill, the Subcommittee recommends several disclosures for air ambulance providers. Recommendations Content for Air Ambulance Provider Disclosures • The Subcommittee recommends that air ambulance providers disclose the following

information to patients:

i) An explanation of the charge, including the mileage calculated, the rate per mile, other specific charges, and a statement that the patient has the ability to request documentation supporting these charges;

ii) The amount the air ambulance provider received from the insurance plan; iii) The amount owed by the patient; iv) A statement notifying the patient about his/her right to access medical records under

HIPAA; v) Contact information if the patient has questions; vi) Information regarding how to initiate an appeal of an adverse benefit determination; vii) A statement notifying the patient that he/she may file a complaint with DOT, listing

the hotline telephone number (when available) and a link to the DOT complaint website;

viii) A statement about any charity/assistance programs offered by the air ambulance provider and the potential for other sources of payment outside of the patient’s health insurance policy, including information on payment flexibilities and any discounted rates available from the air ambulance provider; and

ix) A statement that the patient has the right to assistance from an authorized representative.

Form for Air Ambulance Provider Disclosures • The Subcommittee recommends that the air ambulance disclosures accompany the bill. Review for Air Ambulance Provider Disclosures • The Subcommittee recommends that DOT conduct a retrospective review after five years to

ensure disclosure requirements of air ambulance providers are working as intended.

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Implementation of Air Ambulance Provider Disclosures

The Subcommittee recommends that DOT initiate rulemaking to promulgate regulations requiring the claims-related disclosures recommended by the Committee for air ambulance providers. If the rulemaking is not initiated within one year of adoption of the recommendation by the full Committee, the Subcommittee recommends that Congress require DOT to do so through legislation.

Contextual Definitions For context, the Subcommittee has adopted definitions for the following terms used in the


Payor, Provider, Preauthorization, Medical Necessity, Charge 2.5 Subscription Program Disclosures to Patients

Beyond traditional health plans, some consumers participate in subscription or membership programs with various emergency medical services providers. In the air ambulance context, these subscription programs are intended to avoid out-of-pocket expenses for air ambulance transports and vary in length, cost, and coverage. These programs usually are based on an annual fee to members, who will receive financial benefits, such as a write-off or reduction of out-of-pocket charges, should they need an air ambulance transport. The Subcommittee discussed membership subscription programs, including the various components and challenges associated with the programs. The Subcommittee further discussed impactful State legislation and potential best practices for these programs. To assist the consumer in understanding and navigating air ambulance subscription programs, the Subcommittee recommends several disclosures for these programs. Recommendations

• The Subcommittee recommends that relevant stakeholders (such as industry associations and

consumer groups) work together to develop the best practices or standards for how air ambulance companies disclose the following information regarding air ambulance subscription programs to consumers:

a) A statement about the potential for balance billing following the purchase of a

subscription/membership. b) A statement about whether there is reciprocity with other programs. c) Specific information on rates and coverage (what is covered?). d) A list of any specific limitations on or exclusions from coverage, including:

i) Is the benefit limited to the use of participating providers? ii) Is the benefit only available in a particular service area?

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iii) Is there a requirement that the patient/consumer be insured and that the service be covered by insurance? Are uninsured individuals also eligible for the program, and if so, what benefits are available to them?

iv) Are there consumers/patients who do not need this coverage? (e.g. in-network, Medicare, Medicaid beneficiaries)

v) Are there operational factors that may limit, cause discontinuation of, or otherwise affect the delivery of services under the subscription program, including limitations related to patient age, size, or medical conditions; weather; base relocation or closure; or change in service area?

e) An explanation of the cancellation policy and any waiting periods before coverage begins.

f) Information on the complaint and dispute processes. g) Pre- and post-purchase notifications regarding substantial changes in coverage or service

(including service area), refunds and cancellations, as well as potential remedies to consumers for these changes.

Contextual Definitions



Balance billing, Provider Chapter 3. GAO Recommendations on Disclosures Section 418(d)(4) of the FAA Act tasked the Advisory Committee with considering recommendations contained in the 2017 GAO Report on Air Ambulances.17 That report recommended consideration of consumer disclosure requirements for established prices charged, business model and entity that establishes prices, and extent of contracting with insurance.18 GAO’s 2017 report stated that “DOT enforces disclosure requirements due to the [Airline Deregulation Act]’s focus on competitive market forces, which relies on consumers having accurate and timely information on which they can make decisions.”19 Further, GAO noted, “[s]uch consumer disclosure requirements are intended to enable consumers to make informed decisions on tradeoffs when selecting flights, considering such factors as provider, service quality, and price.”20 GAO suggested that DOT might consider similar consumer disclosures for the air ambulance industry as required for the commercial airline industry. In response, DOT noted that, because of the emergency nature of most air ambulance transports, “patients have little to no choice or ability to ‘shop.’”21 The report further noted that even if consumers are not able to choose which air ambulance provider transports them during an emergency, “it is 17 GAO-17-637 18 GAO-17-637, 28. 19 GAO-17-637, 25. 20 GAO-17-637, 26. 21 GAO-17-637, 26.

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important that the public understands the price variation that exists among air ambulance providers, along with any potential limits of their insurance coverage.”22 GAO’s report stated that patients are not the only “consumers” of air ambulance services and noted that “all stakeholders need to know such fundamental aspects as average prices charged, transport frequency, and the amount insurance and patients may pay” because “[w]ithout such information, stakeholders may not be able to make decisions that serve the patients’ best interest.”23 The Subcommittee discussed GAO’s suggested disclosures as well as their potential to benefit consumers other than patients. The Subcommittee considered the purpose for these suggested disclosures and whether and how the disclosures would accomplish the Subcommittee’s goals of improving the patient’s experience and understanding of the industry. The Subcommittee also discussed the potential creation of a repository for the collection of relevant air ambulance data, but ultimately concluded that this would be unduly burdensome and costly with minimal benefits. In discussing “base rate” disclosures, the Subcommittee determined that how each air ambulance provider calculates its “base rate” likely varies because each has different costs. For example, some air ambulance providers have partnerships with medical providers or use advanced equipment that could result in higher fixed costs than those of other providers, and, consequently, their base rates may include service levels that other providers do not include. Similarly, the Subcommittee agreed that providers serving rural areas have higher base rates than more urban providers to offset the lower transport volume. The Subcommittee also considered which entity would be responsible for making these disclosures. The Subcommittee considered whether the FAA certificate holders operating under 14 CFR Part 135 would be making the disclosures or whether it would be the supplier of the air ambulance service. The Subcommittee determined that it was best for each program that provides services to make these disclosures on their websites. The Subcommittee further considered the level of detail to require in the disclosures and generally agreed that the disclosures should provide more information than just a number for the base rate (i.e., the disclosure should provide some information about the costs on which the base rate is comprised). The Subcommittee also considered how to disclose the information to consumers most effectively (i.e., whether to provide costs for a sample trip type24 or just list the types of items that are included in the base rate),25 as well as whether to include ancillary fees that are sometimes charged in the disclosures, and whether to list the costliest or most commonly

22 GAO-17-637, 26-27. 23 GAO-17-637, 27. 24 For example, each provider would disclose its total charge for a transport with a given set of circumstances, such as a “40 loaded mile adult cardiac trip,” for comparison with the total charge for the same transport by other providers. 25 The Subcommittee noted that the base rate may incorporate the cost of items such as airplane leasing, medical provider salary, rent, and 24/7 readiness.

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charged ancillary fees, or both. During these discussions, the Subcommittee noted that DOT has issued disclosure regulations for airlines26 and air charter brokers27 with varying levels of detail. Recommendations The Subcommittee recognizes that section 418(d)(4) of the FAA Act directs the plenary Committee to make recommendations related to the Comptroller General study, GAO–17–637, which, in pertinent part, recommends that DOT “[c]onsider consumer disclosure requirements for air ambulance providers, which could include information such as established prices charged, business model and entity that establishes prices, and extent of contracting with insurance.”28 • The Subcommittee declines to recommend that DOT require air ambulance providers to

disclose information to consumers regarding business model and entity because it does not believe the information serves any useful purpose for consumers.

• The Subcommittee recommends that DOT require air ambulance providers to list on their

websites all payors with which they are in-network. If a provider is not in-network with any payor at all, the Subcommittee recommends that the air ambulance company be required to state this fact on its website.

• The Subcommittee recommends that DOT require air ambulance providers to disclose on

their websites information on the charge for their services. The information should include the following:

i) The base rate (including other base rates if they differ based on specialty and

geography). ii) The loaded mileage rate. iii) A list of the five most expensive ancillary services offered by the company and the

charges for such services. A disclaimer that this list of ancillary services is not an exclusive list, if that is the case.

iv) The total price for sample transports based on varying scenarios as appropriate for the air ambulance program. The chart provided with this set of recommendations includes examples.29

• The Subcommittee recommends that DOT initiate rulemaking to promulgate regulations

requiring the air ambulance disclosures recommended by the Committee. If the rulemaking is not initiated within one year of adoption of the recommendation by the full Committee, the Subcommittee recommends that Congress require DOT to do so through legislation.

26 See, e.g., 14 CFR Part 253, Notice of Terms of Contract of Carriage, where “The purpose of this part is to set uniform disclosure requirements, which preempt any State requirements on the same subject, for terms incorporated by reference into contracts of carriage for scheduled service in interstate and overseas passenger air transportation.” 27 14 CFR 295.24. 28 U.S. Government Accountability Office, GAO-17-637, Air Ambulance, Data Collection and Transparency Needed to Enhance DOT Oversight 28 (2017). 29 A sample of this disclosure can be found in Appendix D.

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Sample charts of predefined transport scenarios for charge comparisons can be found in Appendix D. Chapter 4. Distinguishing Between Charges for Air Transportation and Non-Air Transportation Services Section 418(d)(1) of the FAA Act directs the Advisory Committee to make recommendations regarding the separation and distinction of charges for air transportation from charges for medical services (non-air transportation) on patients’ bills for air ambulance services. Specifically, the FAA Act says:

“The recommendations shall address, at a minimum—

(1) the costs, benefits, practicability, and impact on all stakeholders of clearly distinguishing between charges for air transportation services and charges for non-air transportation services in bills and invoices, including the costs, benefits, and practicability of— (A) developing cost-allocation methodologies to separate charges for air transportation services from charges for non-air transportation services.”

After considering the mandate of the FAA Act, the Subcommittee decided not to recommend that air ambulance providers distinguish charges and provide cost allocation between air transportation and non-air transportation costs. The Subcommittee believes that an extensive analysis, which the Subcommittee could not conduct given the time constraints and lack of funds, is necessary to determine the feasibility of distinguishing charges and providing cost allocation between air transport and non-air transport costs. Subcommittee members noted that ongoing efforts to distinguish charges and allocate costs in the ground ambulance context have required considerable time and resources, with results still pending. The Subcommittee nevertheless discussed and made preliminary determinations about the potential costs, benefits, practicability, and impact the distinction in charges contemplated by the FAA Act might have on various stakeholders, including patients/consumers, State insurance regulators, payors, physicians, air ambulance providers, DOT/HHS, and stakeholders overall.30 In evaluating the impact of distinguishing between medical and transportation charges, the Subcommittee considered how and whether distinguishing the charges might change billing practices. This included a discussion about whether distinguishing the charges would require multiple bills (i.e., one bill for medical services and one bill for air transportation) and whether sending invoices for the separated charges together would create regulatory compliance issues. Based on these discussions, the Subcommittee determined that distinguishing charges would likely require a wholesale restructuring of the industry’s billing system, and would likely require air ambulance providers to send multiple bills to patients to comply with State regulations governing the content of bills for medical services.

30 The discussion points are summarized in the chart found below.

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The Subcommittee also recognized that the difficulty in distinguishing between medical and transportation charges is compounded by the diversity of the air ambulance industry. For example, the various types of air ambulance providers (FAA certificate holders operating under 14 CFR Part 135, and others) face different challenges in billing for the services provided based on their model of service and various network agreements with payors. In considering the impacts on payors and air ambulance providers, the Subcommittee noted that separating charges would likely lead to increased administrative complexity and cost, as well as an increased potential for litigation, if payors and providers entered separate network agreements for medical services and for air transportation services. The Subcommittee also discussed how partial or full claim denials would further complicate matters if charges are separated. For example, a payor might approve a claim for medical services provided during an air ambulance transport, but deny (in full or in part) the claim for the air transportation. This type of a partial approval and partial denial could lead to increased confusion and difficulty for patients when they receive their bills and EOB forms. The Subcommittee noted as well that, although separating medical and transportation charges might provide some increased transparency across the industry, the process would increase the burden on all provider types and could create the potential for consumers to be confused by additional bills or line items. Ultimately, the Subcommittee concluded that any positive impacts on stakeholders resulting from separating medical and transportation charges, including consumers, are likely outweighed by practicability concerns as well as costs and other negative impacts. Recommendations The Subcommittee recognizes that section 418(d)(1) of the FAA Act directs the Advisory Committee to make recommendations regarding the costs, benefits, practicability, and impact on all stakeholders of clearly distinguishing between charges for air transportation services and charges for non-air transportation services in bills and invoices. This includes the costs, benefits, and practicability of developing cost-allocation methodologies to separate charges for air transportation services from charges for non-air transportation services; and formats for bills and invoices that clearly distinguish between charges for air transportation services and charges for non-air transportation services. The Subcommittee considered these issues pursuant to the mandate, but decided not to recommend that air ambulance providers distinguish charges and provide cost allocation between air transport and non-air transport costs. After carefully considering the potential costs, benefits, practicability, and impact on all stakeholders, the Subcommittee determined that distinguishing charges would raise practicability concerns and generally lead to negative impacts on all stakeholders, while generating only limited benefits for some stakeholders. The impacts are summarized in more detail in the list of stakeholders (below).

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Stakeholder Costs/Benefits/Practicability

Patients/Consumers

Positive Impact (Benefit)

Patients and consumers could see some potential benefit from state oversight and regulation of medical costs, which in certain cases may reduce the amount they will be charged, and potentially improve transparency and clarity in billing. Whether these benefits result and the extent of such benefits depends on the State regulation that is promulgated.

Negative Impact (Cost)

State regulation could increase costs to patients and consumers if providers increase rates to offset any increase in administrative and regulatory burdens. Increased operating costs could result in providers leaving certain markets, particularly in rural areas. In areas served by medical facilities and transport providers in multiple States with significantly differing regulation, there is the potential for a lack of clarity or billing complications. Consumers may receive services from an in-network hospital and an out-of-network air ambulance provider (or vice versa), resulting in uncovered charges, which exacerbates the surprise billing problem. Overall, this could result in increased costs for patients and consumers (passed on to them from operators), fewer transport options (if operators are not properly equipped for a particular State or do not have the proper personnel to operate in a neighboring State), and potentially worse patient outcomes (if operators had to transport patients to a distant medical facility in order to stay within a particular State, rather than to a nearer medical facility that may be in a different State).

Practicability Patients and consumers could be confused about what the bill means and how to dispute payment denials for different categories of costs.

State Insurance Regulators


State regulators could benefit by gaining oversight authority over certain aspects of the air ambulance industry and regulation of medical costs because such costs would no longer be lumped into air transportation costs.


Future State regulation would be susceptible to increased advocacy/lobbying efforts and litigation, which may create uncertainty.

Practicability

There is potential for the appearance of conflicts of interest from States setting rates and benefitting from their regulatory actions, such as in workers’ compensation. States may also try to use licensing requirements to strictly limit operations in their borders to operators that are based in-state. These types of requirements are presently preempted.

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Payors


Distinguishing charges would presumably result in increased transparency for payors. Payors would also be better positioned to negotiate network rates with individual providers for medical costs, rather than payors’ current position negotiating with providers handling both medical and transport costs collectively.


Payors would potentially need to engage in multiple network negotiations with individual parties (for separate medical and transportation arrangements), increasing complexity and administrative costs. The lack of expertise in air ambulance services would make it more difficult to determine what is a covered service and to negotiate and contract for transportation-related services. Distinguishing costs could increase payors’ administrative burden and increase the potential for litigation, either between payors and patients or between payors and their in-network providers, for portions of the bill that are not fully covered, but now identified.

Practicability

Payors would encounter increased billing complexity and contract difficulties from separating contracts for medical and transportation services, and payors would also have to rely on HHS, Labor, and Treasury to amend their regulations to allow payors to pay separately for essential air transport and medical services.

Physicians (emergency, trauma, cardiac, or stroke)


None identified.


For a hospital or physician, there would be increased administrative burden and cost from distinguishing the charges. Difficulties in arranging for transport would also result when medical care is in-network for the patient, but the air transport is not in-network. If distinguishing charges results in more charges going uncovered and potentially unpaid, hospitals and physicians might attempt to find ways to circumvent EMTALA and refuse to accept some interfacility transfers, thereby negatively impacting patient care.

Practicability

There could be a reduction in reliable air ambulance services (if increased costs reduce the availability of such services), which, for physicians looking to transfer patients, could delay medical care provided to patients.

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Air Ambulance Providers

(includes both Part 135

operators and non-Part 135 operators)

Positive Impact (Benefit) None identified.


There could be a high administrative burden, including from managing privacy concerns related to HIPAA, as amended by HITECH, and the increased time needed for separating and documenting costs into transport and non-transport categories. There is also the potential for increased litigation from disputes with consumers and payors over uncompensated portions of bills, a worse negotiating posture for air ambulance providers in relation to payors, and potential market disruption from changes in costs and the regulatory landscape, which could affect the number of operators and where they operate. Uncertainty about the rules that apply could lead to unintended violations of anti-kickback and Stark laws because compliance could become more difficult and lead to collusion and the appearance of kickbacks between different entities, where one entity might provide a service for another entity either without charging or by being compensated a non-market rate. Increased State regulation on the aspects of the air ambulance operation that attach to medical costs would enable States to impose state licensure requirements for on-board medical personnel and for on-board medical equipment. This could increase regulatory and operational complexity, as well as costs generally, for air ambulance operators that conduct interstate transports.

Practicability

There could be practical complications with respect to billing (including during disaster assistance situations involving multiple entities and FEMA) and contracting (where contracts may need to be separated for medical and transportation services). If medical costs are separated, then States could decide to only pay for medical care provided by state-licensed medical providers on-board an air ambulance and effectively force out-of-state operators to have on board state-licensed medical personnel or to avoid the State altogether.

DOT/HHS


Distinguishing charges presents unclear benefits to the public and other stakeholders on whose behalf DOT and HHS carry out their respective agency missions.

Negative Impact (Cost) There is a risk of introducing increased confusion in the industry.

Practicability

A joint DOT/HHS effort would be needed to implement the task of distinguishing charges, and there might be competing agency missions. Both agencies would have to align their goals, determine which agency should take the lead, and make decisions regarding the agency(ies) responsible for enforcement and compliance. Significant monetary resources would need to be appropriated for such an effort, and the process for

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implementation would take a significant amount of time, including resolving Paperwork Reduction Act issues, conducting preliminary research, studying the issues, and developing an extensive work plan involving stakeholders prior to drafting a rulemaking.

Overall

Impact

Distinguishing charges would have a negative impact on stakeholders. If medical services and aviation services are separated, it may lead to separate bills being sent to patients and consumers for medical and transport charges since State rules may govern the medical portion and Federal rules would govern the aviation portion. The requirements for such items as payment, balance billing, medical necessity, and licensure could be different. For example, if a State rule dictates that a particular air transport is or is not medically necessary while Federal rules hold the opposite, the two invoices could be handled differently for the same transport. The practical effect may be that a consumer may have only transport charges paid but not medical charges or vice versa. Separate bills also add complexity for consumers, payors, and other stakeholders.

Practicability

Distinguishing charges would require a wholesale structural change to billing and payment practices, which would necessitate changes to business and compliance processes, including discerning how much of the cost of the training, supplies, equipment, and maintenance is related to health or transport.

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APPENDIX A. Glossary of Terms Used Throughout the Report

For the purposes of this report and the Subcommittee recommendations, the Subcommittee uses the following terms and definitions: Balance billing

• When a provider bills for the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $100 and the allowed amount is $70, the provider may bill for the remaining $30. A preferred provider may not balance bill you for covered services.

• https://www.healthcare.gov/glossary/balance-billing/ Charge

• The initial amount billed by a provider, supplier or other entity for payment for health care services or products. This is the same as the estimated cost to the patient for the services.

Emergency

• An illness, injury, symptom or condition so serious that a reasonable person would seek care right away to avoid severe harm.

• https://www.cms.gov/cciio/resources/files/downloads/uniform-glossary-final.pdf Medical Necessity

• A patient transport is medically necessary if requested by a licensed or certified medical professional or first responder and determined by that licensed or certified medical professional or first responder using best available medical information at the time of the request to be conducted by an air ambulance service provider without regard to the patient ability to pay.

Network

• Network - The facilities, providers and suppliers your health insurer or plan has

contracted with to provide health care services. • https://www.cms.gov/cciio/resources/files/downloads/uniform-glossary-final.pdf

Payor

• an entity obligated to provide reimbursement to a provider, supplier or entity for the health care services or products rendered to individuals who are eligible and enrolled members of the Payor's benefit plans

• Examples include a health insurer or self-funded group health plan

https://www.cms.gov/cciio/resources/files/downloads/uniform-glossary-final.pdf

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Preauthorization

• Approval from a health plan (payor) that may be required before you get a service or fill a prescription in order for the service or prescription to be covered by your plan.

Provider

• For the purposes of this recommendation, the term “provider” is used to reference a hospital-based ambulance provider which is owned and/or operated by a hospital, critical access hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, home health agency, hospice program, or, for purposes of section 1814(g) and section 1835(e), a fund.

Supplier

• For the purposes of this recommendation, the term supplier is defined as any ambulance service that is not institutionally-based. A supplier can be an independently owned and operated ambulance service company, a volunteer fire and/or ambulance company, a local government run firehouse based ambulance, etc., that provides Part B Medicare covered ambulance services and is enrolled as an independent ambulance supplier.

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APPENDIX B. SBC Forms

Changes to the SBC as recommended by the Subcommittee are highlighted in yellow.

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APPENDIX C. Form Based on ABN

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APPENDIX D. Sample Website Disclosures for Air Ambulance Providers

a report on disclosures and distinction of charges

Documents