Senate surprise-billing legislation could hurt medical transportation companies, S&P says

Listen

A Senate surprise-billing proposal could lead to negative financial effects for companies providing emergency air transportation if signed into law, according to S&P Global Ratings.

In a new report, "Surprise-billing legislation could mean rough flight for emergency air transportation industry," the agency examined the potential effects of the Senate's proposed Lower Health Care Costs Act.

The legislation aims to stop surprise medical bills. It would limit patients' out-of-pocket costs for air ambulance transportation to the in-network cost-sharing amount and prohibit air ambulance providers from balance-billing patients for an amount exceeding the in-network cost-sharing amount. 

According to the proposal, payment to air ambulance providers from insurers for surprise medical bills would be the local median contracted commercial amount the health plan negotiated with other providers and agreed to in that geographic area.

If the legislation is signed into law in its current form and without an offsetting payment increase from the federal government, the ratings on medical transportationation companies Air Methods Corp. and Global Medical Response could be weakened, S&P said.

"Air Methods and GMR generate a significant portion of their profitability from out-of-network billings, which could become significantly less profitable under the legislation," the agency said in a news release. "The LHCC would cap out-of-network rates at the negotiated regional in-network median rate. This benchmarking pricing method contrasts with alternatives to address surprise billing such as mandatory arbitration."

S&P said it expects the change would affect the air transportation industry the most compared to other healthcare providers.

The Lower Health Care Costs Act, formally introduced June 19 by Senate Health Committee Chairman Lamar Alexander, R-Tenn., and ranking member Patty Murray, D-Wash., passed in that committee June 26.

Mr. Alexander told The Hill he hopes the legislation goes before the full Senate for a vote by the end of July.

 

More articles on healthcare finance: 

Joint replacement bundles saved $997 per patient
Air ambulance rates up to 9.5 times more than what Medicare will reimburse
U of Utah Health will no longer bill patients' surviving spouses for medical debt

Copyright © 2021 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars