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CMS Unveils Air Ambulance Cost Reporting Requirements

Sep 15, 2021

The Biden administration is moving onto its next rule spurred by the No Surprises Act with new proposed cost reporting requirements on air ambulance services and a proposed maximum $10,000 fine for providers and plans that fail to submit the necessary data.

The proposed rule comes a couple months after CMS released an interim final rule in July that provides the definition and methodologies for calculating the qualifying payment amount, or in-network rate, that must be used for determining payment and cost-sharing. The July rule applied the No Surprises Act’s ban on surprise bills to out-of-network air ambulance services and limited how much patients have to pay out-of-pocket beginning next year.

The July interim final rule went into effect Monday (Sept. 13), but private citizens and the Brain Injury Association of America say in public comments submitted to the Federal Register that they’re worried the rule will limit access to air ambulances.

“As a result of how the rule is written, the reimbursement rate will likely be based on the depressed in-network rates of hospital-based providers. It is a rule that accounts for only one type of provider,” several dozen comments say. “I ask that this rule is corrected to differentiate between independent non-hospital providers and hospital-based providers to account for the completely different cost and reimbursement structures.”

CMS’ rule introduced Friday (Sept. 10) details how issuers and providers must report on air ambulance services or be fined no more than $10,000 for noncompliance.

“The air ambulance industry is a highly consolidated market that often leads to surprise bills for patients,” HHS Secretary Xavier Becerra said in a Sept. 10 statement. “Today’s proposed rules are part of the Biden-Harris Administration's agenda to protect patients from unreasonably high costs and make health care more affordable. These rules would allow HHS to collect data to analyze the industry's market trends and costs and provide critical information that will address exorbitant air ambulance expenses.”

The Government Accountability Office found in 2019 that 69% of air ambulance transports for privately insured patients were out-of-network, leading to a significant cost at $36,400 as median price for a helicopter transport and $40,600 for a fixed-wing transport in 2017.

CMS raised concerns in its proposed rule that federal law keeps states from limiting how much an air ambulance provider can charge.

“As states, the Federal Government, oversight agencies, and advocacy groups have examined the issue of air ambulance services and balance billing, it has become clear that there is a lack of comprehensive, national data on air ambulance costs, transports, and contractual arrangements between providers of air ambulance services and plans and issuers,” the CMS rule says.

Specifically, CMS’ rule would require plans to submit claims-level data in addition to the market type of the plan or coverage and certain claim adjudication information like whether claims were paid or denied.

Air ambulance providers would have to report cost data that’s separated by air transportation, medical services and supply costs; the number and location of all air ambulance bases; their type of aircraft and how many are in their fleet; the number of transports by payor mix, including plans, issuers, government payors and the uninsured); the number of claims denied by group health plans or health insurance issuers and why; and the number of emergency and non-emergency transports by base and by type of aircraft.

The rule would require plans and issuers to submit the data for 2022 by March 31, 2023, and data for 2023 by March 30, 2024.

Short-term, limited-duration insurance plans would be exempt from the reporting requirements.

The rule’s comment period will end Oct. 18.