AAMS suing over perceived insurer bias in No Suprises Act

By Dan Parsons | November 23, 2021

The Association of Air Medical Services has filed a lawsuit against the federal government challenging the No Surprises Act, arguing that the new law gives insurance companies the upper hand in payment disputes and could threaten the future viability of air medical transport.

AAMS supports the basic goals of the new law, which aims to shield patients from surprise medical bills, including balance billing from emergency medical transport providers and remove them from the dispute process that often results between healthcare providers and insurance companies. 

Taken as a whole, the No Surprises Act is meant to make healthcare costs more transparent, and avoid sticking patients with expensive bills for air ambulance transports when the provider is not included in the patient’s insurance “network.” 

Most air medical transport providers agree that the system should be more transparent, but there is pushback from some provider advocates who see the rules as favoring insurers over air medical operators. Others in the industry say that’s not the case, that patient welfare is the ultimate goal and that air medical billing practices should have greater regulatory oversight. 

The new law affects all of healthcare, but has particular ramifications for the air medical sector, said Brian Stimson, a former U.S. Department of Health and Human Services acting general counsel and principal deputy general counsel and now an attorney representing AAMS.

“It does a lot of different things,” Stimson said at the recent Air Medical Transport Conference (AMTC) in Fort Worth, Texas. “It touches a lot of different parts of healthcare and air ambulance is just one part. In concept, it holds patients harmless from balance billing. Patients are to pay no more than in-network cost sharing . . . determined based on something called the recognized amount, which is determined by state law.”

At issue is a provision in the latest set of interim final rules (IFR) for implementation of the No Surprises Act that lays out an independent dispute resolution process that allows both healthcare providers and insurance companies, after a period of negotiation, to plead their case for payment before an independent arbitrator. 

While it “was the intent of Congress when passing this law that no single statutory factor receives special weight in the . . . process,” AAMS said in a statement announcing its lawsuit, the interim final rules “ignore Congress’s intent, instead focusing on a single factor.” 

“Air Medical Services transport the sickest, most severely injured patients in our healthcare system — we fully support protecting those patients from these payment disputes and worked with Members of Congress and our larger healthcare community partners to ensure that happens,” AAMS president and CEO Cameron Curtis said in a statement. “However, the fair and transparent process that we all supported is not the process being implemented. Instead, we are faced with a scenario in which a patient is in an emergency, is transported by a helicopter at the request of a trained first responder or qualified physician, and that patient’s insurer gets to unilaterally determine the amount they pay. This will have disastrous consequences for access to emergency air ambulance services.”

That factor is the qualified payment amount (QPA) or the insurance company’s median in-network rate for certain contracts for a given service — in this case air medical transport — in a certain area. In-network cost sharing is either determined by the state-specific recognized amount or by a QPA, Stimson said.

The association is not alone in its opposition to the law final rules. Among others, the Texas Medical Association (TMA) filed a lawsuit in federal district court on Oct. 29 lodging the same complaints as AAMS outlines in its suit.

“TMA supports the patient protection intent of the No Surprises Act,” TMA president Dr. E. Linda Villarreal said in a statement announcing that organization’s lawsuit. “However, TMA’s lawsuit challenges one component of the administration’s rule that ignores congressional intent and unfairly gives health plans the upper hand in establishing payment rates when a patient receives care from an out-of-network physician, oftentimes in an emergency.” 

AAMS contends that because the QPA is weighted in the payment decision process, insurers have an advantage over air ambulance providers in both the negotiation and final resolution. The association wants multiple factors, including the type of aircraft, quality of service provided and the patient’s ability to consent to medical treatment to be considered during payment dispute negotiations. Such a “fair process” will better “ensure the sustainability of air medical services and the larger healthcare system,” the AAMS statement said. 

“In terms of AAMS activity on the No Surprises Act, what we really want to do is fix what we see is a flawed QPA methodology so that when that QPA number is brought up in the arbitration process, it something that looks like a market rate that you might be seeing from a commercial payer and, frankly, something that will allow for the sustainability of air ambulances,” Chris Eastlee, AAMS vice president of public affairs said at AMTC. “The insurer perspective, as you might imagine, is a little bit different from ours. They absolutely want to make sure . . . the information they are providing to the arbitrator is the overriding factor in QPA.” 

Another, longer-term concern of the healthcare sector is that insurers could use their QPA rates to drive down future payments and possibly chasing some providers out of their networks in order to pay lower bills, Eastlee said. 

“The biggest problem here is you may be in network with a lot of the largest insurers in your area today, but that may degrade over time if they know they can pay you significantly less by going out of network and drive you to a lower number,” Eastlee said. “If that QPA is far less than they are offering you now, they won’t enter into network with you again at that higher number.” 

“So, it’s not just what happens to you on January 1^st, it’s actually what will happen to you over the next three or four or five years,” Eastlee added.