Air ambulance costs debated by Montana lawmakers

HELENA – Montana lawmakers are trying to do what other states have failed to do before them: regulate the air ambulance industry to keep patients who need life-saving flights from receiving whopping bills.

Four measures are on the House floor Wednesday and one is being heard later in the day in the House Human Services Committee. All are in response to complaints by Montana residents who were charged tens of thousands of dollars for emergency flights because their insurance didn’t cover the out-of-network costs.

The sponsor of one of the bills, Republican Sen. Gordon Vance of Belgrade, told the House Appropriations Committee on Tuesday that just the threat of legislation has resulted in air ambulance companies and insurance companies striking agreements to provide better in-network coverage in Montana.

“Everyone else has come to the realization that they need to sit down at the table with the insurance companies and work this thing out and not leave these folks in the middle,” Vance said.

Justin Dillingham, chief customer officer for Oregon-based Life Flight Network, said the legislation is pre-empted by federal law and would be struck down in court if it passes.

Dillingham’s company is particularly concerned by the bill in the Human Services Committee that would impose a 12 percent tax on air ambulance charges that are a certain percentage above allowable Medicare costs.

If that measure passes, Life Flight could close its operations in Montana, where the company already makes so little money that it might not be worth it to sue, Dillingham said.

“Somebody would have to take on the burden of challenging it,” he said. “That’s a cost that won’t be recouped.”

Life Flight is in the network of insurer PacificSource but is still in negotiations with the state’s largest insurer, Blue Cross and Blue Shield of Montana. Blue Cross spokesman John Doran said Life Flight and Reach Air Medical Services are the two providers that have accounted for most of the insurer’s out-of-network cases.

Instead of legislation, Blue Cross would rather let the market take care of the issue, Doran said.

“That’s why we are continuing to work on expanding our network to make sure our members are flown by an in-network provider in every possible instance,” he said.

The federal Airline Deregulation Act prohibits states from regulating the prices, routes or services of air carriers. A federal judge cited it last year in striking down a North Dakota law that required air ambulance companies to have deals with insurers covering three-quarters of the state to be included on a primary call list.

In August, another federal judge rejected a Wyoming law that would have limited how much air ambulance companies could charge the state for transporting workers injured on the job.

Vance’s bill would require insurers and air ambulance companies to resolve price disputes through mediation or the courts, and patients would be responsible only for co-pays and co-insurance costs.

The measure is up for a final House vote Wednesday, and the Senate must agree with the House’s amendments before it goes to the governor.

Also up for a final House vote is a proposal by Democratic state Sen. Tom Facey of Missoula that would bar air ambulance companies from telling credit reporting agencies that a patient didn’t pay a bill in full.

The House also will vote on whether to agree with the Senate’s amendments on legislation by Democratic Rep. Ryan Lynch of Butte, which would regulate as insurance products the memberships that air ambulance companies offer to Montana residents.

The final measure before the House is a resolution by Facey urging Congress to address air ambulance billing issues.