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Air Ambulances and Workers’ Compensation

Air Ambulances and Workers’ Compensation“Air ambulance” is a term used to describe a type of helicopter that – just like a traditional ambulance – is equipped with medical equipment and staffed by medical professionals. Air ambulances are typically used in situations where quick transport is needed for patients in life-threatening situations. The most commonly transported patients are those with traumatic injuries, heart attacks, strokes, respiratory diseases and pregnancy complications. According to The Association of Air Medical Services, more than 550,000 patients in the U.S. use air ambulances each year.

While they are sometimes the only option available for proper and prompt medical care, the use of air ambulances can be extremely costly for patients and insurers. Air ambulance companies are generally unregulated in regards to what they can charge for their services. According to the National Association of Insurance Commissioners (NAIC) an average cost for one air ambulance flight is between $12,000 and $25,000, with some longer flights exceeding $50,000.

Because air ambulance companies are designated as “emergency medical providers,” they are not required to enter into managed care contracts and can – and do – aggressively seek payment of billed charges from every payor, the only exceptions being Medicare and Medicaid. Their exorbitant charges combined with predatory collection practices has prompted legislators and members of Congress in several states to try and find some reasonable legislative solutions.

Another issue that adds to the difficulty in regulating air ambulance costs is the Airline Deregulation Act of 1978 (ADA). While the intent behind the passing of the act was to encourage competition within the airline industry, it essentially prohibits states from regulating the prices air carriers – including air ambulances – charge.

When it comes to workers’ compensation insurance, the debate centers on which law governs air ambulance rates in a workers’ compensation situation. Earlier this year in Texas, the Austin Court of Appeals issued a decision in a case involving the high prices that air ambulances charge Texas workers’ compensation insurers. While the court held that the ADA preempted any state fee mandates, they also held that the court did not have authority to order insurers to pay anything other than their contractual obligation of state-set charges. This decision, while good news for insurers in Texas, still leaves the debate open when it comes to air ambulance regulation. Many workers’ compensation insurance brokers are reasonably concerned about the looming costs of air ambulance services and will continue watching how federal and state legislators are addressing the issue.

About ASIA Workers’ Compensation

Associated Specialty Insurance Agency, Inc. has been “The Workers’ Compensation Specialist for Brokers and Agents” for the past two decades and is committed to providing brokers and insurance agents across the East Coast with expertise and services to develop a Workers’ Compensation policy. For more information about how we can assist you with claims management, anti-fraud measures, and more call (610) 543-5510 to speak with one of our professionals.

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