In what could be a landmark case for the air ambulance industry, Air Evac EMS is suing Arkansas Blue Cross & Blue Shield (ABCBS) in U.S. District Court for what it claims is a pattern of underpayment of patient claims for helicopter EMS transport amounting to more than $10 million. The Air Evac suit is part of a pattern of helicopter EMS companies pushing back against health insurers who are either outright denying patient claims or reimbursing them at low rates, often below those set by Medicare, leaving patients with large unpaid balances and unable to pay. Last November Air Evac sued health insurer Medical Mutual of Ohio for $3.5 million on similar grounds.
The Arkansas case also charges that the actions of ABCBS are a violation of the Affordable Care Act (aka Obamacare) inasmuch as the insurer is denying compensation for an “essential health benefit.” ABCBS pays air ambulance providers a flat rate of $5,000 per transport while the Medicare reimbursement rate in Arkansas is a flat rate of $4,877 plus $34 per mile, according to Air Evac. However, both ABCBS and Medical Mutual maintain that they are under no obligation to compensate Air Evac at any agreed-upon rate as they do not have a contract with the company and it is not in their preferred provider network.
In Ohio court filings. Medical Mutual called Air Evac’s fees “exorbitant.” Air Evac said its average per-transport cost in Arkansas is $30,000 and that in Ohio in 2014 it topped $20,000.