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Feds Nix Wyoming’s Plan to Regulate Air Ambulances Through Medicaid

February 10, 2020

The Centers for Medicare and Medicaid Services (CMS) denied Wyoming’s request to expand Medicaid so it can control the price and distribution of its air ambulance service.

In a January 3, 2020 letter, CMS stated the plan “does not align with the core objectives of Medicaid” under section 1115a and cannot be used to “circumvent other federal statutes.” Air ambulance service is regulated, in part, by the Airline Deregulation Act of 1978, which prohibits states from interfering with air carrier rates, routes, and service. 

Wyoming was attempting to regulate air ambulance service like a public utility. Air ambulance service is run primarily by private providers who are grappling with under-reimbursement by government-run health care programs and private insurance companies, reluctant to make up the difference, says Carter Johnson, spokesperson for Save Our Air Medical Resources (SOAR). As a result, air ambulance providers are shuttered out of insurance networks, leaving consumers stuck with a “surprise medical bill.”

Wyoming has a particular challenge with is sparse population and expansive geography. Wyoming envisioned air ambulance contracts to be offered through a bidding process, which it could only do if all service was covered under Medicaid and operated by the state.

Lives at Risk

SOAR, an air medical service advocacy group, agrees with the CMS decision to deny the waiver.

“The waiver would have posed a direct risk to all Wyoming patients, including current Medicaid beneficiaries, because of the diminished access to emergency critical health care services,” said Johnson.

“In many cases, access to this level of care for high-acuity patients who need air medical services is a matter of life or death,” Johnson said. “If an air ambulance is unable to get to a patient to transport them to the appropriate care center, usually outside the state of Wyoming, the consequences would be dire. While well-intentioned, this waiver would have limited healthcare access and could have put lives at risk.”

Reimbursement – Root of the Problem

SOAR’s next challenge is getting lawmakers to get to the source of “balance billing,” bills for out-of-network costs sent to consumers. The U.S. Department of Transportation’s Air Ambulance and Patient Billing Advisory Committee is already working on this, Johnson says.

“Air medical service is both critical and complex, and we want policymakers to have the information, understanding, and data needed to address the root causes of balance billing, which includes the chronic under-reimbursement by Medicare and other government programs,” Johnson said.

“Ensuring every community has access to air medical, and that no patient receives a balance bill because insurance fails to cover emergency care, should be the goals,” Johnson said. “This will require looking at different aspects including patient mix, chronic under-reimbursement by government programs, increasing denials by private insurers, narrow networks, and air base closures.”

AnneMarie Schieber (amschieber@heartland.org) is managing editor of Health Care News.

Author
AnneMarie Schieber is a research fellow at The Heartland Institute and managing editor of Health Care News, Heartland's monthly newspaper for health care reform.
amschieber@heartland.org @HCPolicy