Insurers, Air Ambulances Would Consider Rate Negotiation

Under federal act, states cannot regulate the prices, routes or services of air carriers

By AMY BETH HANSON, Associated Press

HELENA — Montana health insurance providers and representatives of air ambulance companies said Wednesday they would at least consider negotiations and possibly binding arbitration as a way to set acceptable rates and prevent air ambulance patients from being shocked by their bills.

Jesse Laslovich, chief counsel in the state Auditor’s Office, told the Air Ambulance Working Group that he hoped an open discussion could determine the “sweet spot” for insurance reimbursement rates that allows for adequate air ambulance coverage with in-network providers who would not send large bills for the rest of the costs to patients.

If not, he’d like to see the rates settled through binding arbitration rather than through court cases, Laslovich said.

The Legislature’s Economic Affairs Interim Committee appointed the working group to try to develop a solution after residents complained about receiving air ambulance bills for tens of thousands of dollars from out-of-network providers after their insurance company made its payment. Providers say insurers won’t agree to adequate payments, and insurers argue providers won’t disclose their actual costs so they can set reasonable rates.

Under the federal Airline Deregulation Act, states cannot regulate the prices, routes or services of air carriers.

During Wednesday’s sometimes heated discussions, working group members continually reminded each other that their goal was to get patients out of the middle of the battle between air ambulance providers and insurance companies or managers of self-insured plans.

Bill Bryant, representing a coalition of air ambulance groups, has complained that Montana law allows insurers to create an arbitrary “allowed” amount upon which they base their reimbursement rates. He said in most states, insurers pay based on the billed amount.

Michael Griffiths, CEO of Life Flight Network, said he would be willing to sit down with insurers, as long as they negotiate and not dictate coverage rates. He said one insurer told his company they could “take it or leave it.” They had to leave it, he said.

Ron Dewsnup, president of Allegiance Benefit Plan Management, said Montana’s market has set reimbursement rates at about 250 percent of Medicare’s rate, and he’d be happy to negotiate with providers about contracts in the 250 percent range.

Both Dewsnup and Paul Pedersen with Blue Cross Blue Shield of Montana questioned whether the insurers were obligated to subsidize what might be too many providers. Because of the fixed costs, increased competition among air ambulance providers actually ends up increasing the rates.

Laslovich said Montana’s marketplace isn’t working, and that the likely solution is going to require compromise from both sides.

Bozeman emergency room physician Sid Williamson said he didn’t want to see a solution that would mean a loss of access to such services for critically ill patients.

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