Air Ambulance Services – What Does Your Plan Cover?

Matthew P. Chiarello • March 26, 2018

Due to the increased litigation of air ambulance claims, employers may want to review their plan language to see whether their group health plan covers air ambulance services, and if so, to better understand the terms of the coverage.

Below are three issues employers may want to consider:

  1. Expensive and Often Out-of-Network .  Air ambulance claims can be very expensive. While a 2014 report from the National Association of Insurance Commissioners (“NAIC”) indicates that the average air ambulance trip is 52 miles and costs between $12,000 to $25,000 per flight, recent litigation shows that these claims can go into the hundreds of thousands of dollars.  Furthermore, because many air ambulance carriers are out-of-network, if the group health plan does not cover, or only partially covers, the air ambulance services, the air ambulance company may balance bill the participant.
  2. Conflict of Interest .  Some group health plans state that they will cover air ambulance services to the nearest facility if medically necessary.  If the plan document gives the plan administrator (or claims administrator) discretionary authority to make medical necessity decisions, it may offer the plan some protection.  However, like any other large claim, a court may factor the plan administrator’s conflict of interest (i.e., the plan administrator both decides claims and pays claims) into the standard of review.
  3. Broad or Ambiguous Plan Language Could be Contested .  Some plans include broad or ambiguous language related to their air ambulance benefits.  For example, a plan may state that it will cover air ambulance transportation to the “nearest qualified facility” or the “nearest appropriate facility” instead of the “nearest facility.”  Although an employer may want to reserve some flexibility in its plan document, it may also be worthwhile for it to consider how adverse parties could use such terms against plan.

This is a developing area of the law with no clear-cut answers. As a result, employers may want to develop a multi-dimensional strategy to protect the employer, plan, and plan participants from potential out-of-network air ambulance bills.  This may include, for example, clarifying that the plan administrator shall have sole discretionary authority to decide air ambulance claims (including what is medically necessary); revising broad or ambiguous plan language; communicating with the plan’s third party administrator to determine what amount, if any, the plan will pay for air ambulance services and possibly using an easily determinable amount such as an allowable amount based on Medicare; and taking steps to protect participants from balance billing (e.g., conditioning payments to the air ambulance company on them not balance billing participants).

Employee burnout: what it is and how to prevent it

By Mardy Gould • May 24, 2024
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1 While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health. Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.

Form 720 and PCORI fee FAQs

By Mardy Gould • May 23, 2024
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization? Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness. Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
More Posts