Axios Vitals: Private equity-owned air ambulances charge more
By Caitlin Owens
October 14, 2020
Air ambulances owned by private equity firms charge the highest rates — more than seven times what Medicare pays, according to a new analysis by the USC-Brookings Schaeffer Initiative for Health Policy.
Why it matters: Air ambulances are frequent sources of surprise medical bills, and even when they’re covered by insurance, we all pay for these expensive prices through our premiums.
40% of helicopter ambulance rides result in a surprise medical bill, which averages around $20,000, according to a recent study.
By the numbers: In 2017, helicopter air ambulances owned by two private equity firms charged, on average, $48,250 — or 7.2 times the Medicare rate.
Air ambulances that weren’t owned by private equity firms or publicly traded companies charged $28,800 on average — which is still 4.3 times higher than the Medicare rate.
Private equity carrier charges have also grown faster than the charges of other air ambulances, and by 2017, private equity controlled nearly two-thirds of the national Medicare air ambulance markets.
How it works: Charges aren’t what insurers actually pay. But they serve as a starting point for price negotiations, and providers often bill patients for the difference between the charge and what the insurer agrees to pay.
The other side: Air ambulances argue that they must charge privately insured patients more to make up for low government payment rates, and for trips they never get reimbursed for.