$64K ambulance tab highlights Colorado's surprise billing law limits
The law doesn't apply to emergency flights, one family found, because states are barred from regulating air transportation prices
When a doctor told Toni Stammler her 4-week-old son Milo needed urgent surgery because only one of his lungs was functioning, there was barely time to pack a bag — let alone try to shop around.
"In that moment, I honestly thought my baby could die," she said. "In a situation like that, I don't think any mother should have to think about that, about what is this going to cost."
An air ambulance carried Stammler and Milo from Montrose to Centennial. Milo did well after the surgery at Children's Hospital Colorado, and Stammler and her husband Peter expected their insurance would cover much of the cost, since they'd already spent most of the $10,000 annual out-of-pocket maximum their plan required.
Then the bill came in the mail. It was nearly $82,000.
The Stammlers' insurance, through Peter Stammler's job in the Montrose School District, had covered the vast majority of costs for Milo's care at Children's Hospital Colorado and for the ground ambulance rides to and from the airports in Montrose and Centennial, Toni Stammler said. Their insurance and the air ambulance company, Guardian Flight, hadn't reached a previous agreement on rates, but the insurer offered to pay about $18,000 of that bill.
That left the Stammlers on the hook for almost $64,000. The flight was in late August 2019, and it took until November 2020 to resolve the bill, Stammler said. The Montrose School District didn't respond to questions about the insurance plan.
A spokeswoman for Guardian Flight said she couldn't discuss specific individuals to protect their privacy, but the company is working with multiple insurers on agreements. Patient advocates negotiate with insurance companies, government payers and others to try to cover a bill, and then work with patients to cover any balance, she said.
"When patients need critical transport because of a life-threatening injury or illness and ground transportation is not an option, doctors, nurses or first responders will request air medical services. Without regard for a patient's ability to pay, air medical services are deployed at a moment's notice to help patients," she said.
Possible legislative fix
Last year, Colorado passed a bill limiting the "surprise bills" patients receive when they get medical care from someone who hasn't reached an agreement with their insurance company. Most providers, including doctors and hospitals, already can't bill patients for what their insurance didn't cover if they received care in an emergency.
That law doesn't apply to emergency flights, because states are barred from regulating air transportation prices, said Adam Fox, deputy director of the Colorado Consumer Health Initiative.
"Our protections can't apply to air ambulances because they're regulated by the ( Federal Aviation Administration)," he said. "There's nothing that can be done at the state level."
There could, however, be federal relief in two years.
The $900-billion coronavirus relief package Congress passed on Monday included a provision forbidding "surprise" bills from hospitals, doctors and air ambulances. But President Donald Trump has threatened to veto the bill because he wanted the stimulus checks most Americans would receive increased from $600 to $2,000.
If the bill does become law, most providers won't be able to bill patients directly for out-of-network care starting in 2022. Instead, the provider and the patient's insurance company will have to settle the bill through arbitration. Ground ambulances are exempt.
Rep. Joe Neguse, a Democrat from Lafayette, had introduced a narrower bill last year that would only ban surprise bills from air ambulances. He had said he intended to introduce a similar bill in 2021, but the provision in the relief bill addressed the issue.
"Eliminating surprise billing for air ambulance services will ensure that our rural and mountain communities can obtain the emergency care they need without being buried in bills for medical care they may not have agreed to or received unknowingly," he said. "Action on surprise billing is long overdue, and this agreement will protect all Coloradans, by ensuring fairness in disputes between insurers and providers."
Pushing insurers to pay
The most recent data, from a Government Accountability Office report, found about 70% of air ambulance flights in 2017 were out-of-network, meaning the company operating the helicopter didn't have a contract with the patient's insurance company.
It's not clear what percentage of people who used an air ambulance received a surprise bill, but those who did could face substantial costs: a study published in April in Health Affairs found half of patients who received an out-of-network bill for an air ambulance ride were charged more than $21,000.
Air ambulance companies estimated it cost $6,000 to $13,000 to run a flight in 2016, depending on the team members needed and other factors, according to the GAO. The cost can vary substantially, based on equipment needed and other factors, the Guardian Flight spokeswoman said.
Guardian Flight is owned by KKR, a private equity firm whose air ambulance subsidiaries charge some of the highest prices in the industry, according to a 2020 report from the Brookings Institute.
Even if families were inclined to shop around during an emergency, much of the state is only served by one air ambulance company, so there's no choice for patients who can't take a ground ambulance, Fox said.
The Stammlers' insurance company offered Guardian Flight a contract where they would pay $45,000 per flight, but Guardian turned it down. After negotiations broke down, Guardian Flight offered to reduce the bill to $20,000 if they could pay in two weeks, or $33,000 spread over the next six years, Stammler said. Neither was financially feasible for a teacher and a stay-at-home mom, she said.
"This bill is more than my husband makes in a year," she said.
Without specific legal protections, the best thing patients can do is push their insurer to pay as much as possible, Fox said. Some may also be able to negotiate a lower bill with the air ambulance company, he said.
"With the protections looming, it may provide a bit firmer footing for consumers to negotiate, but the delay will still pose challenges for individuals hit by those air ambulance surprise bills," he said.
Ultimately, Guardian Flight agreed to accept their insurance's offer of $45,000 for their flight, which Stammler thinks is because of their efforts to enlist support from hospitals and elected officials.
"If you don't know the right people to contact, you might get stuck with this," she said. "People shouldn't even have to figure out how to solve this."