A move by the U.S. Veterans Administration (VA) to begin reimbursing non-contract ambulance and air ambulance transportation at rates significantly below costs is getting heavy pushback from federal legislators and providers. The new rule covering reimbursement would take effect this February. Industry critics are charging that the move would force providers to downsize operations and reduce hours of availability while compromising the ability of veterans, particularly in rural areas, to receive prompt medical transport.
The VA currently pays for the actual costs of such medical transports. However, Congress has granted the VA the authority to pay the “lesser actual charge for the transportation or the Medicare Fee Schedule (MFS) amount unless the [VA] secretary has entered into a contract for that transportation with the provider.” (38 U.S.C. section 111(b)(3)(C)) This will allow the VA to impose the MFS payment schedule, which is invariably and significantly below actual costs, the industry charged in a recent suit filed against the VA with the U.S. Court of Appeals on October 26, 2023. It was filed by the Metropolitan Area EMS Authority, including Texas-based MedStar Mobile Healthcare and Pennsylvania-based Valley Ambulance Authority, Quaker Valley Ambulance Authority, and Amed. MedStar maintains that the new rule would cost it $1.4 million annually.
The air ambulance industry has long argued that MFS reimbursement rates are substantially below actual costs, and the rates force them to charge other patients more to make up the difference—a practice called “balanced billing.”
The plaintiffs argue that the new rule exceeds granted Congressional authority, which authorized the secretary to only pay the lower rates when the transports were to or from a VA facility. The new rule would govern payments for transports to any location.
The move by the VA drew stinging rebukes from a bipartisan group of lawmakers including Senate Veterans’ Affairs Committee Chairman Jon Tester (D-MT) and ranking member Jerry Moran (R-KS). Along with Sens. Patty Murray (D-WA) and John Boozman (R-AR), they have introduced the “VA Emergency Transportation Access Act” to “protect rural veterans’ access to quality, lifesaving emergency medical care and transport.” Moran charged that the VA rule “threatens to upend access to care for veterans and all Americans by disrupting the air and ground industry from coast to coast.” Among other things, the legislation would “ensure the new rates reflect the actual cost of transportation.”
“Americans who have served their country honorably deserve the highest quality healthcare, regardless of whether they live close to a hospital or not. This care should include access to life-saving technology, such as emergency air medical services, that can often make the difference between life and death,” said Treg Manning, vice president of sales and marketing, Airbus Helicopters, Inc. Airbus is a leading provider of civil helicopter air ambulances in the U.S.
“The VA Emergency Transportation Access Act introduces a thoughtful approach to protecting emergency transport access for veterans,” said Jana Williams, president and CEO of the Association of Air Medical Services (AAMS), the air ambulance lobby. The bill is strongly supported by leading helicopter air ambulance providers including Air Methods, PHI Air Medical, and GMR.