1). Providers then receive payments from a mix of  sources, depending on the transported patient’s insurance coverage. Specifically,  according to Medicare data we analyzed, the median price providers  charged for helicopter air ambulance transports increased 113 percent  between 2010 and 2014. Due to a lack of such  information, it is unclear to what extent patients with private health  insurance are billed by providers for the difference between the air  ambulance price charged and the insurer’s payment (balance billing). Various Factors May Play a Role in Air Ambulance Prices, but Data Are Limited

		According to Selected Providers, Transport Costs and Volume, Payer Mix, and Competition May Play a Role in Increased Prices Charged

Selected providers reported that factors such as transport costs and  volume, payer mix, and competition play a role in prices charged. Representatives from six of the eight providers we spoke to said that they  adjust prices charged to receive sufficient revenue from private health  insurance to account for lower-reimbursed transports. Providers have  limited ability to control the payer mix—the proportion of transports  reimbursed by, for example, Medicare or private health insurance—as  they do not turn away patients based on insurance coverage. Lack of Data Limits Assessment of Factors Affecting Prices

Despite the above indications of factors that affect prices, an in-depth  analysis of these factors is not possible due to lack of the following types  of data. Stakeholders expressed mixed views on two of these actions—modifying  the ADA and raising Medicare rates. None disagreed with the third action  of increased data collection for the purposes of investigations—such as  unfair or deceptive practices—or increased transparency regarding  prices. In particular, DOT officials questioned  the value of consumer disclosure requirements for the air ambulance  industry given that patients have little to no choice or ability to “shop.”  However, a representative from a group involved with consumer policy or  research noted that it is important that the public understands the price  variation that exists among air ambulance providers, along with any potential limits of their insurance coverage. Without such information, stakeholders may not be  able to make decisions that serve the patients’ best interest. In fact, air ambulance prices have increased— approximately doubling between 2010 and 2014—and large providers  report average prices charged of over $40,000 per transport in 2016. Despite media reports of balance billing, DOT officials note they  have received very few air ambulance complaints since 2006, possibly  because consumers do not think of DOT as a place to file such  complaints. DOT recently modified its online form to include air  ambulance complaints, but the website does not have instructions on how  to file such a complaint. Furthermore, DOT  lacks data needed to assess several key aspects of the industry, ranging  from basic aspects—such as the composition of the industry by provider  type, prices charged by provider, or number of overall air ambulance  transports—to the more complex, such as the extent of contracting  between providers and insurers or extent of balance billing to patients. Likewise, without information on the industry and pricing,  stakeholders such as hospital staff have limited ability to make air  ambulance decisions, such as selecting a provider that best serves the  patient’s financial interests without compromising the medical benefits air  ambulance transports provide. Recommendations for Executive Action

To increase transparency and obtain information to better inform  decisions on whether to investigate potentially unfair or deceptive  practices in the air ambulance industry, we recommend the Secretary of  Transportation take the following four actions:
Communicate a method to receive air ambulance-related complaints,  including those regarding balance billing, such as through a dedicated  web page that contains instructions on how to submit air ambulance  complaints and includes information on how DOT uses the  complaints. CMS and DOT provided technical comments which we  incorporated as appropriate. II), DOT agreed with three of our recommendations but did not  concur with our recommendation that DOT assess available federal and  industry data and determine what information could assist in the  evaluation of future complaints or concerns regarding unfair or deceptive  practices. As we note in the report, the federal  standards for internal control state that management should identify  information needed to achieve objectives and address risks. DOT has  discretionary authority to investigate air ambulance providers but to date  has not done so. Appendix I: Objectives, Scope, and Methodology

For this work we examined: (1) what is known about the prices charged  for air ambulance service, (2) what is known about the factors that affect  the prices charged for air ambulance service, and (3) what actions, if any,  selected stakeholders believe the federal government should take  regarding air ambulance pricing. To describe what is known about air ambulance prices charged, we  analyzed and assessed the reliability of information on prices charged  and amount paid for 2010 and 2014 from Medicare claims data from the  Centers for Medicare & Medicaid Services (CMS) and private health  insurance data published by the Health Care Cost Institute (HCCI). To describe stakeholder views on potential federal actions, we selected  and interviewed 26 stakeholders, including representatives from: 8 air  ambulance providers (3 large independent providers and 5 hospital- affiliated providers); 2 associations representing air ambulance providers;  6 groups familiar with air ambulance business and billing such as analysts  and consultants; 4 states active in assessing air ambulance costs and  prices charged; 2 associations of state officials; 2 associations  representing health insurers; and 2 groups involved with consumer policy  or research.
Why GAO Did This Study

Helicopter air ambulances reduce transport times for critically ill patients during life-threatening emergencies. Although patients typically have little to no choice over the service or provider given the often emergency nature of the transports, they might be billed for charges that have potentially devastating financial impacts. GAO was asked to review air ambulance pricing. This report examines: (1) the prices charged for air ambulance service, (2) the factors that affect prices, and (3) stakeholders' views on any actions the federal government could take to address air ambulance pricing. To answer these questions GAO analyzed 2 years of data (2010 and 2014—the latest available) on prices from CMS and a private health insurance database; interviewed 26 stakeholders, such as 8 air ambulance providers chosen to represent a range of types (hospital-affiliated and independent) and sizes; and interviewed DOT and CMS officials.

What GAO Found

Between 2010 and 2014, the median prices providers charged for helicopter air ambulance service approximately doubled, from around $15,000 to about $30,000 per transport, according to Medicare data from the Centers for Medicare & Medicaid Services (CMS) and private health insurance data. Air ambulance providers do not turn away patients based on their ability to pay and receive payments from many sources depending on the patient's coverage, often at rates lower than the price charged. For example, the Medicare median payment was $6,502 per transport in 2014. Air ambulance providers might bill a privately-insured patient for the difference between the price charged and the insurance payment—a practice called balance billing—when the provider lacks an in-network contract with the insurer. However, due to a lack of information it is unclear to what extent patients are balance billed.
Factors such as a provider's proportion of transports provided by payer and competition may play a role in air ambulance prices charged, but data to assess these factors are not available. For example, selected providers reported that they adjust prices to receive sufficient revenue from private health insurance to account for certain lower-paid transports, such as those covered by Medicare. Price increases may also be tied to the industry's characteristics such as apparent market concentration—the three large independent providers reported operating 73 percent of the industry's total helicopters in 2016. An analysis of these factors is not possible due to a lack of currently available data such as the number of transports or the industry's composition by provider.
Selected stakeholders we spoke to proposed actions to address air ambulance pricing issues, including (1) raising Medicare rates, (2) allowing state-level regulation of air ambulance prices, and (3) improving data collection for the purposes of investigations and transparency regarding prices. Stakeholders expressed mixed views on the first two proposals but none disagreed with the third. Federal internal control standards state that management should identify and communicate information needed to achieve objectives and address risks. The Department of Transportation (DOT) has discretionary authority to investigate potentially unfair practices in air transportation or the sale of air transportation, but has not exercised this authority in regards to helicopter air ambulances. DOT officials said they need additional information about the air ambulance industry. For example, DOT officials note that they have received few air ambulance complaints since 2006 and report that consumers may not think of DOT as the place to complain. Although DOT recently modified its online form to include air ambulance complaints, it has not communicated how to file complaints. Without doing so and obtaining more industry data, DOT is missing important information needed to put complaints into the context of the overall industry that could affect its assessment on whether to pursue investigations. Further, stakeholders such as hospital staff could benefit from greater transparency as they currently have limited ability to make air ambulance decisions that serve both the financial interests and medical needs of the patient.

What GAO Recommends

The Secretary of Transportation should: (1) communicate a method to receive air ambulance, including balance billing, complaints; (2) take steps to make complaint information publicly available; (3) assess available data and determine what information could assist in the evaluation of future complaints; and (4) consider air ambulance consumer disclosure requirements. DOT concurred with all but the third recommendation, stating additional information is not needed for such purposes. GAO stands by the recommendation, as discussed in this report. DOT and CMS also provided technical comments which were incorporated as appropriate.