The cost of ambulance services has risen in recent years – a single trip can exceed $45,000 for an air ambulance service and $1,400 for a ground ambulance service. Medical transportation in workers compensation (WC), however, can take many different forms. These include air ambulances, emergency and nonemergency ground ambulances, nonemergency transportation to and from medical appointments, mileage reimbursement for instances where the injured worker can drive themselves, and other ancillary transportation-related services.
Recently, air ambulance services and their associated costs have garnered attention. The US Congress, the National Association of Insurance Commissioners, and several state governments and related stakeholders have explored issues surrounding the cost of air ambulance services. In response, several states, as well as the US Congress, have introduced legislation aimed at addressing these concerns.
In the WC arena, much of the discussion has centered around a state’s ability to regulate air ambulance reimbursement rates. Some states have fee schedules that encompass air ambulance services, which are intended to regulate WC maximum allowable reimbursements (MARs). However, the federal Airline Deregulation Act of 1978 (ADA) expressly preempts state law “related to price, route, or service of an air carrier.” The question of which law governs fee schedule limitations on air ambulance reimbursement has led to legal challenges in several states. So far, state and federal courts have largely found that the ADA preempts state WC laws and regulations limiting air ambulance reimbursements.
Ambulance services include both ground ambulance and air ambulance. Before looking at the cost of these services, it is important to discuss how reimbursement for these services is determined. Typically, reimbursement consists of two components: a base payment and a mileage payment. The base payment rate reflects the level of service intensity and varies based on whether the transport:
— Is emergency or nonemergency
— Requires basic life-support staff (BLS) or advanced life-support (ALS) staff
— Is ground or air transport
The mileage payment rate reflects the cost of using the ambulance, including fuel and maintenance. While ground ambulance transports are utilized at a much higher rate than air ambulance transports, the cost per episode for ground transports is significantly lower. The frequency and cost per episode vary for each type of ground (emergency and nonemergency) and air ambulance (fixed- or rotary-wing) transport.
Air ambulances can be broken down into two categories: fixed wing (e.g., an airplane) and rotary wing (e.g., a helicopter). Rotary-wing ambulances can be used in place of ground ambulances in emergencies where the injured worker needs to be transported a short distance quickly. Another important characteristic of a rotary-wing ambulance is its ability to land in a variety of locations, including locations that could be difficult for a ground ambulance to reach. On the other hand, fixed-wing transports are typically utilized for longer distance travel.
Historically, rotary-wing episodes have been more prevalent than fixed-wing episodes; rotary-wing episodes accounted for approximately 85% of both payments and episodes for air ambulance services from 2013 to 2017. Chart 4 displays the average payment per episode for fixed-wing and rotary-wing episodes for the base and mileage components.
The average payment per episode increased for both fixed-wing and rotary-wing episodes since 2013. The average base payment is higher for rotary-wing episodes compared with fixed-wing episodes. In contrast, the average
The average payment per episode for an air ambulance is, however, costly, exceeding $20,000 in recent years. Payments for ambulance services, including ground and air, account for more than 75% of total medical transportation costs, and the average payment per episode for ambulances, both ground and air, has increased since 2013.