Air Ambulance: Data Collection and Transparency Needed to Enhance DOT Oversight
Highlights
What GAO Found
Between 2010 and 2014, the median prices providers charged for helicopter air ambulance service approximately doubled, from around $15,000 to about $30,000 per transport, according to Medicare data from the Centers for Medicare & Medicaid Services (CMS) and private health insurance data. Air ambulance providers do not turn away patients based on their ability to pay and receive payments from many sources depending on the patient's coverage, often at rates lower than the price charged. For example, the Medicare median payment was $6,502 per transport in 2014. Air ambulance providers might bill a privately-insured patient for the difference between the price charged and the insurance payment—a practice called balance billing—when the provider lacks an in-network contract with the insurer. However, due to a lack of information it is unclear to what extent patients are balance billed.
Factors such as a provider's proportion of transports provided by payer and competition may play a role in air ambulance prices charged, but data to assess these factors are not available. For example, selected providers reported that they adjust prices to receive sufficient revenue from private health insurance to account for certain lower-paid transports, such as those covered by Medicare. Price increases may also be tied to the industry's characteristics such as apparent market concentration—the three large independent providers reported operating 73 percent of the industry's total helicopters in 2016. An analysis of these factors is not possible due to a lack of currently available data such as the number of transports or the industry's composition by provider.
Selected stakeholders we spoke to proposed actions to address air ambulance pricing issues, including (1) raising Medicare rates, (2) allowing state-level regulation of air ambulance prices, and (3) improving data collection for the purposes of investigations and transparency regarding prices. Stakeholders expressed mixed views on the first two proposals but none disagreed with the third. Federal internal control standards state that management should identify and communicate information needed to achieve objectives and address risks. The Department of Transportation (DOT) has discretionary authority to investigate potentially unfair practices in air transportation or the sale of air transportation, but has not exercised this authority in regards to helicopter air ambulances. DOT officials said they need additional information about the air ambulance industry. For example, DOT officials note that they have received few air ambulance complaints since 2006 and report that consumers may not think of DOT as the place to complain. Although DOT recently modified its online form to include air ambulance complaints, it has not communicated how to file complaints. Without doing so and obtaining more industry data, DOT is missing important information needed to put complaints into the context of the overall industry that could affect its assessment on whether to pursue investigations. Further, stakeholders such as hospital staff could benefit from greater transparency as they currently have limited ability to make air ambulance decisions that serve both the financial interests and medical needs of the patient.
Why GAO Did This Study
Helicopter air ambulances reduce transport times for critically ill patients during life-threatening emergencies. Although patients typically have little to no choice over the service or provider given the often emergency nature of the transports, they might be billed for charges that have potentially devastating financial impacts. GAO was asked to review air ambulance pricing. This report examines: (1) the prices charged for air ambulance service, (2) the factors that affect prices, and (3) stakeholders' views on any actions the federal government could take to address air ambulance pricing. To answer these questions GAO analyzed 2 years of data (2010 and 2014—the latest available) on prices from CMS and a private health insurance database; interviewed 26 stakeholders, such as 8 air ambulance providers chosen to represent a range of types (hospital-affiliated and independent) and sizes; and interviewed DOT and CMS officials.
Recommendations
The Secretary of Transportation should: (1) communicate a method to receive air ambulance, including balance billing, complaints; (2) take steps to make complaint information publicly available; (3) assess available data and determine what information could assist in the evaluation of future complaints; and (4) consider air ambulance consumer disclosure requirements. DOT concurred with all but the third recommendation, stating additional information is not needed for such purposes. GAO stands by the recommendation, as discussed in this report. DOT and CMS also provided technical comments which were incorporated as appropriate.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Transportation | To increase transparency and obtain information to better inform decisions on whether to investigate potentially unfair or deceptive practices in the air ambulance industry, the Secretary of Transportation should communicate a method to receive air ambulance-related complaints, including those regarding balance billing, such as through a dedicated web page that contains instructions on how to submit air ambulance complaints and includes information on how DOT uses the complaints. |
Closed – Implemented
Helicopter air ambulances reduce transport times for critically ill patients during life-threatening emergencies. Although patients typically have little to no choice over the service or provider given the often emergency nature of the transports, they may be billed for charges that have potentially devastating financial impacts. As air carriers, air ambulance providers fall under the Airline Deregulation Act of 1978, which was intended to promote reliance on competitive market forces in order to best further quality service at low prices, among other things. In 2017, GAO reported that between 2010 and 2014, the median prices providers charged for helicopter air ambulance service approximately doubled, from around $15,000 to about $30,000 per transport, according to Medicare data from the Centers for Medicare & Medicaid Services and private health insurance data. These increases pose risks to privately insured patients who may be held responsible by air ambulance providers for a portion of these charges. Specifically, air ambulance providers might bill a privately-insured patient for the difference between the price charged and the insurance payment--a practice called balance billing--when the provider lacks an in-network contract with the insurer. However, due to a lack of information it is unclear to what extent patients are balance billed. Selected stakeholders GAO spoke to suggested that the Department of Transportation (DOT) should collect information to better understand the air ambulance industry. In addition, federal internal control standards state that management should identify and communicate information needed to achieve objectives and address risks. Such risks in the air ambulance industry could include unfair or deceptive practices. DOT has discretionary authority to investigate potentially unfair practices in air transportation or the sale of air transportation, but DOT has not exercised this authority in regards to helicopter air ambulances. DOT officials said they need additional information about the air ambulance industry. For example, DOT officials note that they have received few air ambulance complaints since 2006 and report that consumers may not think of DOT as the place to complain. Although DOT recently modified its online form to include air ambulance complaints, its website has not communicated how to file such complaints. Without doing so, DOT is missing important information needed that could affect its assessment on whether to pursue investigations. Therefore, GAO recommended that DOT communicate a method to receive air ambulance complaints, including those regarding balance billing, which includes information on how DOT uses the complaints. In 2017, GAO confirmed that DOT has added a webpage on its Aviation Consumer Protection website for air ambulance that explains that DOT may pursue enforcement action against air ambulance providers engaged in unfair and deceptive practices. The webpage also describes how complaints are registered, examined, and used by DOT. As a result of these steps, DOT will be in a better position to make informed decisions on whether to investigate potentially unfair or deceptive practices in the air ambulance industry.
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| Department of Transportation | To increase transparency and obtain information to better inform decisions on whether to investigate potentially unfair or deceptive practices in the air ambulance industry, the Secretary of Transportation should take steps, once complaints are collected, to make pertinent aggregated complaint information publicly available for stakeholders, such as the number of complaints received by provider, on a monthly basis. |
Closed – Implemented
Helicopter air ambulances reduce transport times for critically ill patients during life-threatening emergencies. Although patients typically have little to no choice over the service or provider given the often emergency nature of the transports, they may be billed for charges that have potentially devastating financial impacts. As air carriers, air ambulance providers fall under the Airline Deregulation Act of 1978 (ADA), which was intended to promote reliance on competitive market forces in order to best further quality service at low prices, among other things. In 2017, GAO reported that between 2010 and 2014, the median prices providers charged for helicopter air ambulance service approximately doubled, from around $15,000 to about $30,000 per transport, according to Medicare data from the Centers for Medicare & Medicaid Services and private health insurance data. These increases pose risks to privately insured patients who may be held responsible by air ambulance providers for a portion of these charges. Specifically, air ambulance providers might bill a privately-insured patient for the difference between the price charged and the insurance payment-a practice called balance billing-when the provider lacks an in-network contract with the insurer. However, due to a lack of information it is unclear to what extent patients are balance billed. Some selected stakeholders GAO spoke to suggested that the Department of Transportation (DOT) should collect information to better understand the air ambulance industry. In addition, federal internal control standards state that management should externally communicate information needed to achieve objectives and address risks. According to a DOT official, the ADA's focus on competitive market forces relies on consumers having accurate and timely information on which they can make decisions. For example, for commercial airlines, DOT compiles a monthly report of consumer complaints that is made available to the public so consumers and others can compare the complaint records of individual airlines. Without such information for air ambulances, stakeholders may not be able to make decisions in selecting providers that serve both the patients' financial interests and medical needs. As a result, GAO recommended that DOT take steps to make pertinent aggregated complaint information available to stakeholders, such as the number of complaints received by provider, on a monthly basis. In 2018, GAO confirmed that DOT has added a webpage on its Aviation Consumer Protection website for air ambulance that lists the number of complaints filed against air ambulance operators since January 2018, by month. As a result, both DOT and stakeholders will be in a better position to make informed air ambulance decisions
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| Department of Transportation |
Priority Rec.
To increase transparency and obtain information to better inform decisions on whether to investigate potentially unfair or deceptive practices in the air ambulance industry, the Secretary of Transportation should assess available federal and industry data and determine what further information could assist in the evaluation of future complaints or concerns regarding unfair or deceptive practices. |
Open
DOT did not concur with this recommendation, noting in September 2017 that its analysis of whether a complaint alleges conduct that could constitute an unfair or deceptive practice is fundamentally based on the unique facts of each additional case, rather than aggregate data. However, the FAA Reauthorization Act of 2018 (the FAA Act), signed into law on October 5, 2018, directed the establishment of an Air Ambulance and Patient Billing Advisory Committee (the Advisory Committee). The FAA Act required the Advisory Committee to make recommendations such as on what additional data from air ambulance providers and other sources should be collected by DOT to improve its understanding of the industry. In March 2022 the Advisory Committee issued its final report. In this report, the Advisory Committee recommended DOT collect data from air ambulance and providers and suppliers, such as average cost per trip and volume of transports. Under the FAA Act, DOT shall submit a Report to Congress on air ambulance oversight that includes a description of how the Secretary will conduct oversight of air ambulance providers, including the information sources the Secretary will use to conduct such oversight. Although DOT officials previously noted that DOT planned to issue the Report to Congress on or before September 30, 2023, DOT officials have not provided GAO the Report to Congress as of December 2023. DOT officials also noted that the No Surprises Act, which was part of the Consolidated Appropriations Act of 2021, contained related provisions. Specifically DOT officials said the No Surprises Act calls for the Department of Health and Human Services (HHS) to collect data and issue a report on the air ambulance industry. The No Surprises Act states that DOT may use data collected by HHS to help determine whether an air ambulance provider is engaged in an unfair or deceptive practice. DOT officials noted that the data collection effort by HHS is not yet complete. GAO will continue to monitor DOT's progress in responding to the Advisory Committee final report.
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| Department of Transportation | To increase transparency and obtain information to better inform decisions on whether to investigate potentially unfair or deceptive practices in the air ambulance industry, the Secretary of Transportation should consider consumer disclosure requirements for air ambulance providers, which could include information such as established prices charged, business model and entity that establishes prices, and extent of contracting with insurance. |
Open
The FAA Reauthorization Act of 2018 (the FAA Act), signed into law on October 5, 2018, directed the establishment of an Air Ambulance and Patient Billing Advisory Committee (the Advisory Committee). The FAA Act required the Advisory Committee to make recommendations on a variety of topics, including the recommendations from this GAO report. In March 2022 the Advisory Committee issued its final report. In this report, the Advisory Committee recommended DOT require air ambulance providers to display certain information on their websites such as on rates. Under the FAA Act, DOT shall submit a Report to Congress on air ambulance oversight that includes a description of how the Secretary will conduct oversight of air ambulance providers. Although DOT officials previously noted that DOT planned to issue the Report to Congress on or before September 30, 2023, DOT officials have not provided GAO the Report to Congress as of December 2023. DOT officials also noted that the agency had considered GAO's recommendation but determined that such action is not necessary at this time in light of the Department of Health and Human Services efforts to implement disclosure requirements as provided by the No Surprises Act , which was part of the Consolidated Appropriations Act of 2021. GAO will continue to monitor DOT's progress in responding to the Advisory Committee final report.
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