Balance Billing and Air Medical Transport
Bloggers note- Welcome to Week One of a Two-Part blog series focusing on Balance Billing and Air Medical Transport. This week we’ll look at the issue at hand complete with a brief history lesson on how we arrived at today and where things stand currently with regard to the practice. Next week, we’ll look at the public perception of the balance billing practice and even make some suggestions on how to navigate the changing balance billing climate. While this series focuses heavily on Air Medical Transport, there are definite takeaways for the ground ambulance sector, as well.
Billing Patients
Healthcare providers and suppliers have a long history of billing Patients for services. This process occurs in several different circumstances. It can be appropriate when the Patient does not have insurance coverage for the services that have been provided. It can be appropriate when the Patient has not yet met the deductible for their insurance coverage in a given period. It can be appropriate when the insurance coverage requires the Patient to be responsible for a predefined co-pay amount for the services provided. It may also be appropriate when the insurance company has paid an amount less than the provider/supplier’s CHARGES for the services provided. In the latter circumstance, the term of art for this process is called “balance billing.”
Balance Billing Defined
Healthcare providers are one of the few professional groups that have little to no control over their compensation. Unlike accountants, lawyers, consultants and other professional groups, healthcare providers/suppliers are frequently asked to accept compensation for services that has no relation to their actual charge for the services. In many cases, this determination is not made until AFTER the services have been rendered. It is quite common for the payors who are responsible for paying for services rendered to apply seemingly arbitrary standards to derive an amount they believe is appropriate payment for the services. This amount may be call an “allowable,” “usual and customary charges” or some other derivation; however, the outcome is the same… providers/suppliers are left with a shortfall between their charges and the amount they receive from the payor for the services provided. Try that with your local plumber, your estate attorney or your accountant at tax time. I suspect the relationship will not be a longstanding one. Unfortunately, medical transport providers/suppliers are accustomed to operating with this burden.
When the provider/supplier is not obligated to accept the lower payment as payment in full, by regulation, contractual agreement or some other compelling circumstance, the entity may bill the Patient. The act of attempting to collect the difference between the CHARGES for the services rendered and the amount paid by the insurance company is called “Balance Billing”.
The Challenge of Balance Billing
This practice of Balance Billing in medical transport is often viewed in a different manner than our relationships with other professionals as noted above. This difference may result from several aspects of our situation. It is often difficult for us to provide a firm estimate of the charges in advance of the services being rendered. Whether it is because the situation requiring care is unfolding in an emergency circumstance and/or because the needs of the Patient are evolving as the care is provided, providing an estimate of the charges may not be practical. In addition, the financial responsibility for the services rendered are often detrimental to the Patient in economic terms. While Balance Billing for ground medical transport services may not be as onerous an economic burden, the order of magnitude for air medical transport is such that this financial responsibility is often much more catastrophic. Likewise, the perception of the value of the services provided can be very different than the charges for the service.
For example, a quick review of air ambulance providers using this billing office finds the average Rotor Wing base rate charge to be in excess of $17,000, yielding an average charge per transport in above $25,000. Many large Rotor Wing providers are generating an average charge per transport of twice that much. The trend has included double digit increases in charges year over year. Not that it is easy to put a value on lifesaving services and care, but the reality is that many stakeholders have no concept of the COST of providing the services.
