Loophole In Federal Surprise Medical Bill Ban Leaves Patients At Risk Of High, Unexpected Ambulance Bills

UPDATE (February 22, 2022) – After the January 27th I-Team report aired, Mary Heitmeyer's insurance, Cigna, and ambulance provider, Careflite, renegotiated her ambulance bills. Heitmeyer said her insurance offered to pay more for the ambulance rides, while Careflite accepted the offer as full payment, even though it was less than what the company initially billed for. The result was Heitmeyer no longer owns any out-of-pocket expenses for her ambulance rides. Due to the loophole in the federal surprise medical bill ban, neither side was required to do this. Consumer advocates said taking patients out of middle of payment disputes should be what happens in all cases.

GARLAND, Texas (CBSDFW.COM) - Mary Heitmeyer's battle with colon cancer has been hard and expensive.

In a year where she had surgery, chemotherapy treatments, and multiple trips to the hospital, Heitmeyer has racked up tens of thousands of dollars in medical bills.

"At least I have insurance, right? That's what I was thinking," Heitmeyer said.

After reaching her out-of-pocket limit for the year, the Garland cancer survivor thought she was in the clear.

Then came her ambulance bill.

The six-mile non-emergency ambulance ride from a hospital in Richardson to a rehab facility cost $1,340.  A day later, Heitmeyer was transferred back to the hospital for additional testing, resulting in another $1,340 ground ambulance bill from CareFlite.

Heitmeyer's insurance, Cigna, paid $525 for each ride - leaving her out-of-pocket expense totaling $1,630.

"It was mouth-dropping seeing the bill," Heitmeyer said.  "I had insurance, so I wasn't expecting it."

A new federal law went into effect this year banning balance billing, but the ban included a loophole for ground ambulance services.

In the past, even if you went to a hospital that was approved as in-network with your insurance, the doctor or specialist may have still been out-of-network.  That often could result in unexpected and high medical bills.

The new federal law protects patients from those out-of-network bills, including bills from air ambulance service - but not from ground ambulance rides.

"We found solutions for doctors, hospitals, labs - you name it. All healthcare besides ambulances," said Stacey Pogue, senior health policy analyst with the organization Every Texan.

Two years ago, state lawmakers in Texas cracked down on surprise medical billing for state-regulated insurance plans, but the state law also made an exemption for ground ambulances.

According to a Texas Department of Insurance report, 85% of ambulance rides in Texas are billed as out of network, meaning most ambulance rides in the state can result in a surprise bill.

"Our mission is to save lives – not to make a profit," said Jim Swartz, the CEO of CareFlite, a non-profit air and ambulance company.  "We have people's lives in our hands, but no one wants to pay for it."

Lawmakers have been reluctant to include ground ambulance services on surprise bill bans, at least in part, because ambulance services are often run by local governments.

While private corporations provide some ambulance rides, most 911 emergency ambulance calls are provided by local government agencies.

In Dallas, it's Dallas Fire-Rescue. In Fort Worth, it's MedStar.

Matt Zavadsky of MedStar said if local government-run ambulance services could only collect what insurers are willing to pay, either local taxes would have to go up to make up the difference or the level of service would have to go down.

"I would argue that if the community wants to have an ambulance at their heart attack, at their car crash, at their baby not breathing within 7 minutes with a high degree of reliability, it costs a lot more than $500 to do that," Zavadsky said.

While ambulance services say the problem is insurers under-paying, insurers say the problem is ambulance providers' refusal to be in-network.

"There is always going to be this fight between the ambulance industry and the insurance industry, so this is really a problem that we need our policymakers to solve," Pogue said. "They're going to need to hold their feet to the fire to make them come up with solutions and to compromise."

Last year state lawmakers took up the issue again of banning surprise bills for ground ambulance services. However, after passing in the Texas Senate, SB 999 was never voted on by the Texas House.

The insurance industry supported the state bill but ambulance providers said the proposed mediation process for settling payment disputes favored insurers.

Ambulance providers lobbied for an arbitration process like the one Texas physicians have to settle billing disputes.

"We do not support an arbitration process that rewards price gouging," said Jamie Dudensing, CEO of the Texas Association of Health Plans. "Patients should be protected—period—from surprise billing and price gouging."

While lawmakers continue to debate how to handle ambulance billing, many ambulance companies are pushing memberships as a market alternative for patient financial protection.

Most memberships range between $50 and $70 a year for a household with insurance – more for those uninsured.  The membership protects you for any out-of-pocket expense in the event you need an ambulance.