Payment for Dialysis Services in the Individual MarketAlthough 80% of US patients who receive dialysis for endstage kidney disease (ESKD) have Medicare as their primary payer, recent evidence suggests an increasing share with other coverage. 1 Some policy makers allege that dialysis facilities encourage individual market enrollment by subsidizing individual market premiums through contributions to patient assistance foundations. 2 This strategy could increase profits for facilities because commercial plans pay more for dialysis than Medicare, 3 but could also increase individual market spending if patients receiving dialysis have above-average spending.To our knowledge, little is known about the prevalence and spending of patients with ESKD in the individual market. Prior commercial market studies were limited to financial records of 1 chain, combined employer and individual plans, and only examined dialysis spending. 3 To address these gaps, we used claims data for individual market plans and analyzed dialysis and nondialysis spending.
Out‐of‐network air ambulance bills are a type of surprise medical bill and are driven by many of the same market failures behind other surprise medical bills, including patients’ inability to choose in‐network providers in an emergency or to avoid potential balance billing by out‐of‐network providers.
The financial risk to consumers is high because more than three‐quarters of air ambulances are out‐of‐network and their prices are high and rising. Consumers facing out‐of‐network air ambulance bills have few legal protections owing to the Airline Deregulation Act's federal preemption of state laws.
Any federal policies for surprise medical bills should also address surprise air ambulance bills and should incorporate substantive consumer protections—not just billing transparency—and correct the market distortions for air ambulances.
Context
Out‐of‐network air ambulance bills are a growing problem for consumers. Because most air ambulance transports are out‐of‐network and prices are rising, patients are at risk of receiving large unexpected bills. This article estimates the prevalence and magnitude of privately insured persons’ out‐of‐network air ambulance bills, describes the legal barriers to curtailing surprise air ambulance bills, and proposes policies to protect consumers from out‐of‐network air ambulance bills.
Methods
We used the Health Care Cost Institute's 2014‐2017 data from three large national insurers to evaluate the share of air ambulance claims that are out‐of‐network and the prevalence and magnitude of potential surprise balance bills, focusing on rotary‐wing transports. We estimated the magnitude of potential balance bills for out‐of‐network air ambulance services by calculating the difference between the provider's billed charges and the insurer's out‐of‐network allowed amount, including the patient's cost‐sharing. For in‐network air ambulance transports, we calculated the average charges and allowed amounts, both in absolute magnitude and as a multiple of the rate that Medicare pays for the same service.
Findings
We found that less than one‐quarter of air ambulance transports of commercially insured patients were in‐network. Two‐in‐five transports resulted in a potential balance bill, averaging $19,851. In the latter years of our data, in‐network rates for transports by independent (non‐hospital‐based) carriers averaged $20,822, or 369% of the Medicare rate for the same service.
Conclusions
Because the states’ efforts to curtail air ambulance balance billing have been preempted by the Airline Deregulation Act, a federal solution is needed. Owing to the failure of market forces to discipline either prices or supply, out‐of‐network air ambulance rates should be benchmarked to a multiple of Medicare rates or, alternatively, air ambulance services could be delivered and financed through an approach that combines competitive bidding and public utility regulation.
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