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Health Affairs Editor-in-Chief Alan Weil interview Loren Adler from the USC-Brookings Schaeffer Initiative for Health Policy on his recently published paper in Health Affairs, which will appear in the February 2023 issue. He and colleagues examined pricing and billing for ground ambulance transportation with a particular focus on who owns the transportation service.
Each week, Health Affairs Editor-in-Chief Alan Weil brings you in-depth conversations with leading researchers and influencers shaping the big ideas in health policy and the health care industry.
A Health Podyssey goes beyond the pages of the health policy journal Health Affairs to tell stories behind the research and share policy implications. Learn how academics and economists frame their research questions and journey to the intersection of health, health care, and policy. Health policy nerds rejoice! This podcast is for you.
00;00;00;00 - 00;00;30;26
Alan Weil
Hello and welcome to “A Health Podyssey”. I'm your host, Alan Weil. The No Surprises Act, which took effect just over a year ago, protects patients from most surprise charges from out-of-network providers. But notably, the Act did not cover ground ambulance transportation. Ambulance bills can be very high, and of course, most of them are incurred during an emergency. So this gap in the federal law leaves patients quite exposed.
00;00;31;14 - 00;01;01;25
Alan Weil
What do we know about prices in surprise billing for ambulance services? That's the topic of today's episode of “A Health Podyssey”. I'm here with Loren Adler, Fellow and Associate Director of the USC-Brookings Schaeffer Initiative for Health Policy. Mr. Adler and coauthors published a paper ahead of our release of the February 2023 issue of Health Affairs, examining pricing and billing for ground ambulance transportation with a particular focus on who owns the transportation service.
00;01;02;14 - 00;01;18;11
Alan Weil
They found higher prices and higher potential surprise bills for private sector emergency ground ambulance transportation than for public sector ambulances. We'll discuss these findings in more detail in today's episode. Mr. Adler, welcome to the program.
00;01;19;11 - 00;01;20;28
Loren Adler
Thanks for having me. It's great to be here.
00;01;21;09 - 00;01;41;12
Alan Weil
It's great to have this conversation. Before we start, I do want to note for our listeners that we have an event tied to the release of the Health Affairs Council on Health Spending and Value on Friday, February 3rd at 1 p.m. Eastern. And if you're interested in an issue like what it costs for ambulance services, you'll likely be interested in that report as well.
00;01;41;19 - 00;01;59;28
Alan Weil
But let's turn back to the paper and what you did here. You focused on prices and billing, including surprise bills for ground ambulance services. So how common are these bills? How often do people use ambulances and when do you get billed for having used one?
00;02;00;25 - 00;02;31;20
Loren Adler
Sure. So there's about 30 million emergency transports annually in the US. And what we found and we're sort of focused on folks with private commercial insurance here, we found that in about a quarter of those times, the 28% of emergency transports are going to leave patients potentially liable for a surprise bill. And I think what I found almost more surprising was that in almost the same share of transport, so 26% of transports, even for non-emergency,
00;02;31;20 - 00;02;40;28
Loren Adler
So these are often, you know, hospital to hospital or bringing someone to a nursing home, even for those 26% of the time, folks were liable for a potential surprise bill.
00;02;41;27 - 00;03;01;10
Alan Weil
Wow. So this is a really common service and a lot of billing going on. So your paper focused on ownership structure and you divide sort of by public and private. But actually there are a lot of different ways ambulance services can be organized. Can you just give us a sense of what these options are?
00;03;01;28 - 00;03;22;27
Loren Adler
Sure. So ground ambulances are, I think, very interesting in the sort of context of medical service provision and that there's generally the locality, you know, the municipality or the county deciding how to run their ambulance service. And so their first decision is whether they are going to directly staff and operate their own service. And typically that's through the fire department.
00;03;22;27 - 00;03;50;26
Loren Adler
So about 60% of emergency transports in this country are actually run by a public sector entity or then the other sort of main option is that many localities will contract out the right to sort of be dispatched by your 911 operator to a private ambulance company. And actually, it's mostly a lot of small companies across the country, some with a little bit bigger of a regional footprint.
00;03;50;26 - 00;04;19;13
Loren Adler
And then there is in particular one very large private equity-backed ground ambulance company, American Medical Response. That's about 10% of all emergency transports nationwide. So you have a couple owned by private equity, a lot of sort of various small companies just owned by independent, some nonprofits. Some hospitals run ambulances. And then, as I said, right, 60%, most of them are public sector, and that's traditionally fire departments.
00;04;19;13 - 00;04;26;21
Alan Weil
But it's not the case that if you have a public sector service, that you would never get a bill. Is that right?
00;04;27;11 - 00;04;48;08
Loren Adler
That's correct. So that's the other interesting part. So there's sort of the second order decision here is, that localities make, is how to price and regulate your service. So you can, there are actually some localities, though, Baltimore County, for instance, and Maryland, they actually just, they don't bill residents, period. So not your cost sharing. There's no balance bill. That's just the end of the day.
00;04;48;08 - 00;05;16;20
Loren Adler
And there are a fair amount of cities and counties that run it that way. But there are many that don't. I think the sort of opposite example from recent history I know about is Mecklenburg County, where Charlotte, North Carolina is, it got into a little bit of heat because they were trying to garnish people's wages to, you know, if they didn't pay their ambulance bill on time and really only backed off in the wake of public pressure over this is a public entity run by, you know, Charlotte, North Carolina.
00;05;16;21 - 00;05;28;00
Loren Adler
So people weren't too happy having their wages garnished to pay for that. Obviously, the public sector is going to be about as good at collecting money if they want to. Better than a private company, probably.
00;05;28;00 - 00;05;47;22
Alan Weil
They have a lot of tools for doing that, don't they? So if you get a bill just like any other health care service, there's a chance your insurance will cover it in full or cover it, you know, except for the deductible and cost sharing, just like if you went to the doctor. The question that I think you're trying to get at here is what happens beyond that.
00;05;47;23 - 00;06;08;10
Alan Weil
Right? So if it's a regular insurance claim, that's important because you have to pay a share of it. But if it goes beyond that and it's out-of-network, then you have this potential surprise billing. So can you give us just a little bit more detail here on the lay of the land? What do you find about the frequency of potential surprise billing for ground ambulances?
00;06;08;21 - 00;06;33;20
Loren Adler
Yeah, so that's I think what was interesting here and I think differs from previous studies on this topic is that, so it's actually the case that the large majority of ground ambulance transports are out-of-network. So in our data it was 85% of transports, emergency transports, were out-of-network. But in about two thirds of those cases, the insurance company actually is allowing the full amount.
00;06;33;20 - 00;06;58;15
Loren Adler
So they're sort of paying the full amount of patients still paying their normal cost sharing. But there's no balance bill, to be had because the insurer sort of has allowed that full amount. It's those other one third of the cases. So that's about 28% of all transports where the ambulance company can then turn around and send the patient a bill for that difference between what the insurer paid and what the ambulance company charges.
00;06;58;15 - 00;07;17;20
Loren Adler
And that can be, it can be, you know, some of them are not that high, but some of them can be very high, right? And that's a pretty, it's generally unilaterally set by the provider. Sometimes there's local regulation, often there's not, and, right, so some of those are can be very large and people can be hit with thousand dollar surprise bills not infrequently from ambulances.
00;07;18;04 - 00;07;38;23
Alan Weil
Okay. So just to sort of pull together the quantitative findings here, help me understand the, how the ownership structure, the difference between public and private sector providers relates to this likelihood and of getting a surprise bill or the amount that bill might be.
00;07;39;09 - 00;08;13;27
Loren Adler
While perhaps surprisingly, we found that the chances of being liable for a surprise bill were actually similar across private and public sector ambulances, we did find that getting transported by a private sector ambulance comes with substantially higher prices, patient cost sharing and surprise bill amount. So that dollar amount that you're, that the surprise bill can actually be. So for instance we found that private sector ambulances prices and cost sharing were about 30% higher than they were for public sector ambulances, and potential surprise bills were about 50% larger.
00;08;13;27 - 00;08;20;06
Loren Adler
So, you know, in the range of $750 compared to about under $500 for a public sector ambulance.
00;08;20;21 - 00;08;55;05
Alan Weil
Okay. So these are potentially quite large liabilities. They vary by who's providing the services and they're going to come as a surprise, or at least not something you can plan for or negotiate over. I want to talk about the policy implications, the policy context in which this plays out and what we might do about it. We'll have that part of the conversation after we take a short break.
00;08;55;05 - 00;09;24;21
Alan Weil
And we're back. I'm speaking with Loren Adler about ground ambulance billing and their prices and how that varies by who owns the ambulance service. Before the break, we got some numbers that are pretty bracing about the potential outlays someone would have if they take an ambulance ride. And particularly the notion that the, although the likelihood of getting a balance bill actually isn't that different between public and private sector ambulance providers, the amount of the bill certainly is.
00;09;25;03 - 00;09;49;20
Alan Weil
So as we noted at the outset, the No Surprises Act didn't cover ground ambulances. It was pitched as a way to eliminate surprise billing. So maybe before we even get into the solutions here, can you say a little bit about why it was excluded and what Congress did to say, we're not unaware of this issue, we're just not ready to tackle it right now?
00;09;49;20 - 00;10;26;04
Loren Adler
Sure. So I'm not sure I can give you a great reason. I don't think there is a great reason why it got excluded. I read a recent survey that 16% of bills that people considered surprises in the past year were from ground ambulances. So that is a decent chunk of surprise bills. I think there was a bit of a concern, particularly from, just from localities, from mayors, from representatives of smaller areas, just because so much of emergency ground ambulance service is run and billed by localities and effectively as sort of part of the tax base locally.
00;10;26;10 - 00;10;59;14
Loren Adler
There was a lot of concern coming from them. And those are actually very influential voices to congressmen and women, understandably so. I think there was a little bit of learning that just sort of needed to happen there. But as you sort of alluded to, right? The No Surprises Act, while it didn't prevent surprise bills from ground ambulances as it did set up this advisory committee on ground ambulance and patient building, on which I'm actually a member that is sort of along with most of the stakeholders or kind of the other folks on it, that is supposed to come back with recommendations to Congress.
00;11;00;02 - 00;11;04;01
Loren Adler
So hopefully Congress can turn back to this issue in the next couple of years here.
00;11;04;25 - 00;11;31;29
Alan Weil
Yeah. So without sort of getting into the politics of why it was excluded, it does seem that the role of localities in this financial ecosystem is complicated. And your research, I think, really helps shed a light on that and hopefully will help Congress figure out what to do. In that vein, you note in the paper that there are some state and local provisions designed to limit surprise billing.
00;11;33;15 - 00;11;53;11
Alan Weil
And of course, the whole pricing structure is often set by localities. So how effective do you think these existing provisions are? Maybe you've answered it by telling me how many complaints they're still getting about surprise billing, but also, can we learn anything from those provisions that would help us figure out what might be appropriate federal action?
00;11;53;29 - 00;12;20;27
Loren Adler
At the local level, there are some provisions that I find, that I think are effective, right? So I mentioned earlier Baltimore County, for instance, right? You just can't get billed, period. There are a number of places like that. Montgomery County, Maryland's the same way. Washington, D.C. operates similarly. So there are places like that that is sort of, I think, how most people probably would think their ambulance service is going to run traditional, you know, just how you don't expect the fire department to bill you and they put out a fire your house.
00;12;22;06 - 00;12;58;03
Loren Adler
Those are, this are our local provisions, but they're highly uneven and, across the country, and that obviously doesn't exist everywhere. There are some states that have taken it upon themselves to pass surprise billing legislation trying to get at this issue. However, the sort of key problem there is that those states surprise billing laws are unfortunately only able to really regulate about half of the commercially insured market because due to ERISA, this complicated federal law, they're basically not allowed to tell self-insured, self-funded self-insured employers what to do.
00;12;58;09 - 00;13;21;06
Loren Adler
So that still leaves a pretty big gap. In those, I do think we can take some lessons from them. I actually, I tend to, I always point to the example of Colorado who passed the law regulating ground ambulance surprise billing a few years back. And one interesting thing there is the public sector ambulances in Colorado actually sort of got themselves exempted from the law and they still are exempt from the law.
00;13;21;26 - 00;14;02;11
Loren Adler
But after they sort of set the, right, these laws also require insurance companies to make a timely payment and make a, what is a relatively generous payment in Colorado to the ambulance service there. After the fact, I have heard from some public sector entities in Colorado that they're a little bit disappointed that they got themselves exempted. So I do think that the lesson I think that I take from that is that the public sector can actually be made better off on average by the sort of standard surprise billing policy that we've sort of seen for other medical specialties just right before we're talking about they get paid less than private sector entities.
00;14;02;11 - 00;14;07;20
Loren Adler
So sort of by definition, if you cut that somewhere in the middle, the public sector ends up winning.
00;14;08;04 - 00;14;28;03
Alan Weil
Yeah. So that's a perfect transition to sort of trying to make a little sense of this. I mean, there were a lot of fights and they're still going on about how to structure the payments that providers receive under the No Surprises Act. You can protect the patient, but that doesn't answer the question of how much the insurer should pay the provider.
00;14;28;09 - 00;14;49;17
Alan Weil
So there are skirmishes about that. There were different approaches at the state level before Congress stepped in. I guess one advantage of the ground ambulance issue being delayed is that we have some experience not just with the state law and local provisions on ground ambulances that you've described, but also on the implementation of the No Surprises Act in other areas.
00;14;49;26 - 00;15;02;15
Alan Weil
So is there something we can draw from that experience that you think will help guide how you might decide how much to pay under a No Surprises provision for ground ambulances?
00;15;03;09 - 00;15;25;07
Loren Adler
Sure. So, right. So the No Surprises Act has taken the tact, largely saying let's look to what average prices are for in-network services where there was a contract locally. I think one issue we raise in this paper is that that is probably more difficult in the case of ground ambulances, where only 15% of the transports are in-network.
00;15;25;16 - 00;15;49;10
Loren Adler
And actually a point that we haven't raised so far is that the public sector entities are even more rarely actually contracting for these services. Often there are sort of informal agreements, but they're traditionally not writing out, you know, your typical insurance contract for these services. So they're not even going to get reflected in that often. So I think that's one where the sort of taking the exact version of the No Surprises Act is difficult here.
00;15;49;19 - 00;16;24;26
Loren Adler
And really the states that have sort of operated on this issue before often have said, let's pick a multiple of Medicare prices. States are going to differ on exactly what that number is. You know, but maybe it's, you know, twice the Medicare rate or one and a half times the Medicare rate, whatever that is, and that sort of addresses some of this issue and some of the equity issues here, just because the Medicare rates at least are adjusted geographically across the country based on local wages, the sort of cost of running the ambulance service locally and sort of will at least account for those sort of what we think of as the, you know,
00;16;25;10 - 00;16;40;14
Loren Adler
the important input costs differences here. And they also, the Medicare rates also have pretty generous bump ups for rural transports, which I think is probably something that Congress is going to be interested in reflecting in any sort of federal legislation here.
00;16;40;28 - 00;16;58;05
Alan Weil
So if I understand this right, you know, when we look at No Surprises in general, the idea is to sort of figure out what the market would have done. What you're saying here is there really isn't much of a market or not a very well-functioning market or there are a lot of geographies where there really isn't a market.
00;16;58;05 - 00;17;20;25
Alan Weil
And so if we're serious about figuring out the right price, we can't just sort of look to the market because it's not there. Or if we look to the parts of it that are there, we might get some very skewed results. So we're going to have to look at some other benchmarks that might not have been necessary for services that are much more available in the market.
00;17;20;25 - 00;17;22;26
Alan Weil
Is that sort of the challenge we face here?
00;17;23;06 - 00;17;47;11
Loren Adler
Yeah, I think that's a perfect encapsulation, right? It's just, it's hard to imagine there being a market for emergency ground ambulance services. I mean, just think about it for a minute here, right? It's there is the ambulance pretty much has to pick up anyone who calls, whether they're uninsured, whether they can pay or not. And at the back end, then the ambulance company can sort of charge whatever they want and the insurer doesn't really have any recourse.
00;17;47;11 - 00;18;07;10
Loren Adler
They can either pay it in full or they can sort of put the patient in the middle and, which is often what happens, and then it's a game of how much money, you know, how much of that big bill can you actually collect from the patient? Very rarely is that going to be the full amount. But that's where you kind of end up with the patients being the only leverage that anyone has to kind of control prices here.
00;18;07;25 - 00;18;12;18
Loren Adler
If you're not in one of these localities that just strictly regulates, you know, what the pricing is.
00;18;13;09 - 00;18;36;02
Alan Weil
Well, Mr. Adler, I really appreciate the work you've done here. The contribution to this. The first thing I'm really impressed by is just how important it is that we figure something out for these services because of their prevalence and the risk they put people at financially, but also the nuance and insight about who's charging what and the variability.
00;18;36;11 - 00;18;50;11
Alan Weil
I think that's really critical input to coming up with a policy solution. So it's great policy-relevant work. We're thrilled to have been able to publish in Health Affairs and I thank you today for being my guest on “A Health Podyssey”.
00;18;50;11 - 00;18;51;17
Loren Adler
Yeah, thanks so much for having me.