THOUSAND OAKS, Calif. — Before his double lung transplant, Tom Saputo thought he had anticipated each attainable consequence.
But after the surgical procedure, he wasn’t ready for the value of the 27-mile air ambulance flight to UCLA Medical Center — which value greater than the lifesaving operation itself.
“When you look at the bills side by side, and you see that the helicopter costs more than the surgeon who does the lung transplant, it’s ridiculous,” stated Dana Saputo, Tom’s spouse. “I don’t think anybody would believe me if I said that and didn’t show them the evidence.”
“Balance billing,” higher generally known as surprise billing, happens when a affected person receives care from a medical supplier exterior of his insurance coverage plan’s community, after which the supplier payments the affected person for the quantity insurance coverage didn’t cowl. These payments can soar into the tens of thousands of dollars.
Surprise payments hit an estimated 1 in 6 insured Americans after a keep within the hospital. And the air ambulance trade, with its personal fairness backing, excessive upfront prices and tendency to stay out-of-network, is among the many worst offenders.
Congress is contemplating laws aimed toward addressing shock payments and air ambulance costs. And some states, together with Wyoming and California, try to handle the issue despite the fact that there are limits to what they’ll do, since air ambulances are primarily regulated by federal aviation authorities.
That leaves sufferers weak.
Saputo, 63, was recognized in 2016 with idiopathic pulmonary fibrosis, a progressive illness that scars lung tissue and makes it more and more tough to breathe.
The retired Thousand Oaks graphic designer bought on the listing for a double lung transplant at UCLA and began the preapproval course of together with his insurance coverage firm, Anthem Blue Cross, ought to organs develop into obtainable.
Tom and Dana Saputo used to wheel out a bar cart for events. Now the desk is a everlasting fixture of their kitchen, the place Tom retains greater than a dozen bottles of dietary supplements and anti-rejection drugs. (Anna Almendrala/KHN)
But earlier than that occurred, he instantly stopped respiratory on the night of July 7, 2018. His spouse referred to as 911.
A floor ambulance drove the couple to Los Robles Regional Medical Center, 15 minutes from their home, the place Saputo spent 4 days within the intensive care unit earlier than his docs despatched him to UCLA by way of air ambulance.
He was on the point of loss of life, however simply in time, the hospital obtained a pair of donor lungs. They had been an ideal match, and two days after arriving at UCLA, Saputo was respiratory usually once more.
“It was a miracle,” he stated.
Saputo’s restoration was tough, and issues like infections put him again within the hospital for commentary. But essentially the most surprising setback was monetary.
When Saputo opened a letter from Anthem, he found the helicopter firm, which was out of his community, had charged the insurance coverage firm $51,282 for the flight, and Saputo was answerable for the portion his insurance coverage didn’t cowl: $11,524.79.
By distinction, the fees from the day of his transplant surgical procedure totaled $40,575 — together with $31,605 for his surgeon — and had been absolutely coated by Anthem.
Saputo appealed to Anthem twice concerning the ambulance costs. Meanwhile, the helicopter firm, Mercy Air, stored calling him after he left the hospital, asking him to barter together with his insurance coverage firm. It even referred to as his grownup daughter in San Francisco to ask how the Saputos deliberate to pay the invoice.
“I have no idea how they even got her name or her number,” Saputo stated.
Mercy Air is a subsidiary of Air Methods, which operates in 48 states and is owned by the personal fairness agency American Securities.
Air Methods acknowledged by way of e mail that it had put Saputo by a “long and arduous process.” The firm contacted his daughter as a result of it tried each cellphone quantity related to him, stated firm spokesman Doug Flanders. But Air Methods laid the blame on the ft of his insurer.
Anthem spokeswoman Leslie Porras stated the blame doesn’t lie with insurers, however with air ambulance firms that stay out of community to allow them to cost sufferers “whatever they choose.”
“The ability to bill the consumer for the balance provides little incentive for some air ambulance providers to contract with us,” Porras stated.
(In January, six months after Saputo’s surgical procedure, Anthem entered into a contract with the air ambulance company to make it an in-network supplier, she stated.)
Air Methods forgave Saputo’s invoice in August after ABC’s “Good Morning America,” working with Kaiser Health News, inquired about his case. Air Methods stated it was an inner determination to zero out his invoice.
The Saputos sit of their yard with their three canines, Lindsey, Owen and Beatrice. (Anna Almendrala/KHN)
Other sufferers often aren’t as fortunate.
The median value of a helicopter air ambulance flight was $36,400 in 2017, a rise of greater than 60% from the median worth in 2012, in line with a Government Accountability Office evaluation. Two-thirds of the flights in 2017 had been out-of-network, the report discovered.
The air ambulance trade justifies these costs by declaring that the majority of its enterprise — transporting sufferers coated by the general public insurance coverage applications Medicare and Medicaid — is severely underfunded by the federal government.
“The remaining 30% of patients with private health insurance end up paying over 70% of the costs,” stated Flanders of Air Methods.
But critics argue the actual downside is market saturation. While the variety of air ambulance helicopters within the U.S. has elevated — rising more than 10% from 2010 to 2014 — the variety of flights hasn’t, which implies air ambulance firms search to lift costs on every trip.
“This is a great opportunity to make money because patients don’t ask for the price before they receive the service,” stated Ge Bai, an affiliate professor of accounting and well being coverage at Johns Hopkins University.
That’s what annoyed the Saputos essentially the most about their air ambulance cost: There was no means they might have shopped round to check prices beforehand.
“There’s just no possible way that a customer of insurance can navigate that process,” Dana Saputo stated.
Bai additionally criticized the observe of charging privately insured sufferers exorbitant quantities to make up for losses from Medicaid and Medicare sufferers and maintain the air ambulance trade afloat.
“If they feel that Medicare and Medicaid is paying too little, they should lobby the government to get a higher reimbursement,” Bai stated.
In California, Democratic Gov. Gavin Newsom signed a invoice in early October that can restrict how a lot some privately insured sufferers can pay for air ambulance rides. Effective subsequent 12 months, AB-651, by state Assemblyman Tim Grayson (D-Concord), will cap out-of-pocket prices at sufferers’ in-network quantities, even when the air ambulance firm is out of community.
A extra novel scheme in Wyoming would deal with the trade like a public utility, permitting the state’s Medicaid program to cover all of its residents’ air ambulance trips after which invoice sufferers’ medical health insurance plans. The state would then cap out-of-pocket prices at 2% of the affected person’s earnings or $5,000, whichever is much less. Wyoming wants permission from the federal authorities to proceed.
Ultimately, although, state authority is restricted as a result of the federal Airline Deregulation Act of 1978 prohibits states from enacting worth legal guidelines on air carriers.
Congress is contemplating a number of bipartisan payments on shock billing. One measure by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) would ban balance bills from air ambulance firms. The invoice handed committee and is now headed to the Senate flooring for a vote, pending approval from Senate Majority Leader Mitch McConnell.
Air Methods stated that, generally, it will assist federal laws that may calculate new charges for Medicare reimbursement, so long as they’re primarily based on value knowledge the trade gives.
But there may be intense industry opposition to the invoice. Combined with the complexity of the laws (it additionally consists of prescription drug price reform) and competing Senate management priorities, the measure faces a rocky path to the president’s desk, stated Melissa Lorenzo Williams, supervisor of well being care coverage and advocacy on the National Patient Advocate Foundation.
“Despite having bipartisan and bicameral support, I can’t confidently say that this is something that will pass,” Williams stated.