Better Solutions for Healthcare

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.