Montana Legislative Committee Endorses Air Ambulance Bill

A Montana legislative committee is trying to find a way to prevent air ambulance patients from being stuck with huge bills without violating a federal law that exempts air carriers from state regulation.

Members of the Economic Affairs Interim Committee voted unanimously Tuesday to support legislation that would leave patients out of the bill negotiations between their insurance program and out-of-network air ambulance providers. Some Montana residents had received so-called “balance bills” for tens of thousands of dollars from out-of-network providers after their insurance payment was made.

The interim committee created an Air Ambulance Working Group to gather information and propose legislation.

Jesse Laslovich, chief counsel in the state Auditor’s Office, told lawmakers Tuesday that the working group was unable to reach consensus. But he said he did come to the following conclusions: The out-of-network air ambulance providers are submitting bills that are too high and insurers can raise their reimbursement rates.

“The key with all of this is trying to find that balance, trying to find that sweet spot between the air ambulance provider and the insurer – and we haven’t gotten there. What we are saying with this proposed legislation … is ‘find the damned sweet spot,'” Laslovich said, expressing his frustration. “Don’t put this on consumers and their families.”

Over the past few months, representatives of insurance companies and benefits managers argued that some air ambulance companies would not negotiate a contract with them and were sending exorbitant bills, some for more than $100,000. Private air ambulance companies countered that insurers wouldn’t negotiate a fair market rate and government reimbursement rates were even lower.

The proposed bill, supported on an 8-0 committee vote, sets up a framework to settle the reimbursement issue while holding the patient harmless.

The draft bill initially would require the patient’s insurance company to pay at least what it would pay an in-network provider for the same service. If the air ambulance company does not believe that is adequate, the two sides can negotiate a payment, agree to binding arbitration to determine a fair price, or they can take the issue to court. The patient would only be held responsible for their deductible and co-pay.

Five other states have attempted legislation that was challenged by air ambulance companies and overturned by courts that ruled the efforts violated the Airline Deregulation Act.

On Tuesday, it was insurance companies and benefit managers arguing the legislation would violate federal law regarding price regulation. Laslovich argued it did not because both sides would have to agree to binding arbitration for it to be put into play.

Jennifer Hensley, a lobbyist for PacificSource Health Plans, said the proposed bill effectively rewards companies that have refused to negotiate in-network contracts and are a disincentive to future network contracts, which are needed to keep health care costs manageable.

Bill Lombardi, speaking on behalf of Blue Cross Blue Shield of Montana, said the issue should be addressed by Congress.

Ron Walter with REACH Air Medical Services said he supports the legislation. “From our position, you have the solution that we think will work in the state to take the patient out of the middle,” he said.

Bill Bryant, a health care consultant who represented a coalition of non-hospital air ambulance companies, acknowledged rates for air ambulance transfers are high and “I wouldn’t want to pay for one.” But he said the rates are consistent with what is being charged, and paid for, elsewhere in the country.

The interim committee also voted to send another letter to the state’s congressional delegation urging them to promote changes to the Airline Deregulation Act and address shortfalls in Medicare reimbursement rates for air ambulance services.

Democratic U.S. Sen. Jon Tester of Montana has introduced an amendment to an appropriations bill that calls for a Government Accountability Office to determine what factors are leading to growing air ambulance costs. The bill has passed the Appropriations Committee, and it is awaiting a vote in the Senate. Tester also is working on a piece of stand-alone legislation to address high air ambulance costs, spokesman Dave Kuntz said.