States seek ways to regulate steep air-ambulance costs

States that try to set rules are met with lawsuits that argue air ambulances — specially equipped aircraft, usually helicopters, used to ferry sick or injured people in emergencies — fall under the Airline Deregulation Act, which prevents states from interfering with fares, routes and services.

Last year, North Dakota lawmakers passed legislation that required air ambulance services to be participating providers with insurance companies that cover at least 75 percent of the state's population for inclusion on a "primary call list."

Jon Tester of Montana and John Hoeven of North Dakota sought to amend the Federal Aviation Administration reauthorization legislation to allow states to decide if they want to create rules governing air ambulance rates and services.

Don Wharton, director of business development for REACH Medical Services, said the large bills are a product of commercial insurance carriers and payers being unwilling to pay the fair market value for the service.

Insurance companies and employee benefit managers say air ambulance companies won't reveal actual costs, preventing them from determining a fair payment.

For-profit companies argue the federal government's Medicare reimbursements are woefully lacking and state Medicaid reimbursements can be even less, meaning they have to charge some patients more to stay in business.

Rick Sherlock, CEO of the Virginia-based Association of Air Medical Services, said his group supports bills introduced in Congress last year that would require Medicare to pay closer attention to the actual cost of services.