Ambulance insurance payment bill advances over business objections
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Need an ambulance? Some Hoosiers might find themselves out of luck.
The state has lost hundreds of paramedics, emergency medical technicians (EMTs) and ambulances since 2018 — with multiple independent emergency medical services (EMS) providers shutting down — even as 911 calls climb.
EMS providers say insurance stinginess is complicating their financial stability and forcing them to hand big bills to unwitting Hoosiers. They’re turning to legislation to force health plans to pay out-of-network providers for transports.
Businesses, however, say House Bill 1385 would disproportionately affect small and medium employers, forcing them to pass costs along to staff and customers.
Experts and lawmakers alike pointed fingers aplenty during nearly two hours of discussion Wednesday.
That prompted Sen. Fady Qaddoura, D-Indianapolis, to dub the problem a “classic” example of the three failures theory: by government, by the for-profit market and by the non-profit sector.
Senate bill sponsor Sen. Tyler Johnson, a doctor, said he’s heard from people throughout the state are getting hit with “unbelievable claims” of $10,000 and $15,000. He called that “unacceptable.”
“I believe that we’ve created a product here that will stabilize this industry so that there’s an ambulance when you need it (and so) that there’s a not a surprise bill at the end of the day,” Johnson, R-Leo, said of the legislation.
The committee voted 7-1 to move the bill to the full Senate chamber. Sen. Mike Gaskill, R-Pendleton, voted against.
Long waits, and a legislative solution
A full half of Indiana’s 92 counties contain “ambulance deserts” — in which residents live more than 25 minutes from an ambulance station — according to a 2023 study by the federally funded Rural Health Research and Policy Centers.
Indiana data shows the state lost 300 paramedics, 1,000 EMTs, 200 ambulances and several providers between 2018 and 2021. Over that time period, the run volume increased by 66% to more than 1.25 million.
Brian Burdick, a Barnes & Thornburg partner representing the Indiana EMS Association, told lawmakers that they have just three levers to pull: government insurance like Medicare and Medicaid, private insurance and everyday Hoosiers. Someone needs to pay the bill.
The legislation would require health plan operators to pay out-of-network ambulance service providers at a rate set by the county or municipality in which the transport started. If there’s no local rate, plan operators would have to pay 400% of the published Medicare base rate or the ambulance provider’s billed charges — whichever is less.
The 2023 Medicate rate was about $266, with varying mileage rates, according to a fiscal analysis.
If a health plan makes a payment, the bill would be paid in full, besides a co-pay or deductible on par with in-network patient payments. In that case, the legislation would ban ambulance providers from billing patients.
The legislation additionally repeals a requirement that health plan operators negotiate with ambulance providers interested in in-network status.
Lawmakers took an amendment Wednesday removing the state employee health plan from the legislation’s requirements. Committee Chair Sen. Scott Baldwin, R-Noblesville, said the change was made to avoid a change to state finances since it’s a non-budget session.
EMS providers say they’re on the precipice
Kim Godden, a government relations executive for Illinois-based Superior Ambulance Service, said billing patients leaves them baffled.
“Anybody who gets an ambulance … is already having a bad day. They expect their insurance company to cover that ambulance ride,” she said. “… Then when we get to bill them, they call and say, “Why is this not being covered? And why aren’t we in network?”
She added that for out-of-network rides, insurance may send the check to the patient rather than the ambulance provider. When the provider comes knocking, the money’s often already spent.
“We are here to serve. We’re here to provide care regardless of somebody’s ability to pay. But on the back end, when we go to bill the individual, they’re confused,” Godden said.
Joel Benz, the executive director of Fort Wayne’s Three Rivers Ambulance Authority, said he spent $800,000 on billing last year “trying to chase down the dollars that should be paid to us.”
When insurers do pay ambulance providers directly, the payment might not match the cost it takes to provide the service.
Benz said it costs his company $633 every time it runs a patient to a hospital and called the legislation a “request to get what is owed us.”
Justin Ferrell, the chief operations officer of Terre Haute-based Trans-Care Ambulance Company, said that just this week, a private insurer offered to pay $200 for a $2,500 bill.
“They’re offering less than Medicare and Medicaid,” he noted. Those government health insurance programs offer notoriously low reimbursement rates.
Meanwhile, he said, stocking ambulances is getting pricier: stretchers at $25,000 a pop, $40,000 heart monitors and another $20,000-$40,000 in other supplies on board. Add wages, benefits, insurances, building leases gas — in the realm of 20,000 gallons monthly — and expenses are soaring, Ferrell said.
The legislation’s author, Rep. Brad Barrett, has compared insurance coverage to shrinkflation at the grocery store.
“You buy a box of cereal for two years, and then you go one day and you pick it up and it’s half full — it’s the same box,” Barrett, R-Richmond, said Wednesday. “And that’s what’s happened in the insurance product that we’re offering our employees. This has been carved out. The federal government can’t fix it, (but) we as a state can address it.”
Businesses fear higher premiums, unfairness
Those paying insurance premiums, however, said the legislation would harm them without resolving the root cause of the funding crisis.
That’s because due to federal law, states can only regulate a small slice of insurance plans — those most likely to be held by small and medium-sized businesses.
“While we sympathize with the financial struggles and the crisis that the EMT industry is experiencing, we respectfully oppose House Bill 1385 due to the increased costs that will be shifted to small business owners,” said Natalie Robinson, the Indiana director for the National Federation of Independent Businesses.
She asserted the legislation could actually raise health care costs by growing premiums, which businesses would pass on to employees and customers. Businesses, she said, are already trying to keep up with rising insurance costs and inflation, along with paycheck-boosting workforce shortages.
“Let’s not dip into the same dry well — which is small businesses paying into their insurance plans — to try and fix the problem,” agreed Andrew Berger, the senior vice president for government affairs for the Indiana Manufacturers Association.
“The money raised from the 400% is not going to be much. It’s not going to eliminate the budgetary problems in the ambulance services,” he added. “It’s not going to eliminate or help with that antagonism between the markets and ambulance providers.
Berger suggested EMS be considered an “essential service” like police and fire work, and publicly fund it.
Blaire Hadley, the government relations director for the Insurance Institute of Indiana, said the legislation impacts a “small sliver of the population,” particularly with the state plan removed.
When Sen. Gaskill asked why local governments don’t “step up” and provide EMS, the EMS Association’s Burdick said he thought it was because such service isn’t required under Indiana law and the constitutional tax caps already limit local revenue.
Gaskill additionally worried the bill could raise costs and cut options for those buying health insurance on the marketplace, like his adult children working for the family business.
Others also blamed the federal government.
“I’ll be honest: if Medicaid were holding up its end of the bargain, we might not be having this conversation,” said Ashton Eller, the Indiana Chamber of Commerce’s vice president of health care and employment. He said reimbursement rates are too low.
Godden, of Superior Ambulance Service, later countered that commercial insurance should also hold up its end of the bargain.
The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.