The ambulance industry has become a boom for private equity investors. A recent study found that more than 10 percent of the nation’s 14,000 ambulance services are owned by private equity firms. These firms have taken advantage of a loophole in the law: The federal government sets reimbursement rates for patients on Medicare and Medicaid, but it does not regulate fees for people with private insurance. As a result, the cost of an ambulance ride can vary widely from town to town.
While some state laws protect consumers from surprise medical bills, those protections don’t typically extend to ground ambulance rides. Most states’ laws limit charges for emergency-level transports, but they don’t apply to non-emergency trips or to rides from home or the scene of an accident to the hospital. As a result, insurers often reject contracts with ambulance companies or provide very low reimbursement rates. This gives the companies leeway to bill patients who have private insurance for the full ride, or even to charge thousands of dollars for a four-mile trip.
Consumer Reports has collected hundreds of stories from readers about surprise medical bills, and at least a quarter involve ambulances. Insurers and ambulance providers both have incentives to take advantage of the situation. Insurers want to keep costs low so they can negotiate lower prices with hospitals and other providers, while ambulance services need to collect enough money to cover their costly operations.
Many ambulance services are privately owned and operated, but some are run by governments or charities. They also work with private health insurers on contracts to offer their services in network. The problem is that the contracts aren’t always competitive, and the reimbursement rates offered by most health insurance plans are too low to cover the cost of an average ambulance ride. So, the companies often turn to patients with private insurance, which is more profitable, and try to collect as much as they can for out-of-network trips.
Ambulance services also argue that insurers don’t reimburse them well enough to cover their operating costs. They’re expensive to operate because they must be available 24/7, 365 days a year with a skilled medical crew on call. They also need to purchase and maintain ambulances, which are expensive to repair or replace. They also have to pay staff salaries and benefits.
The solution is to ask your insurer whether an ambulance service is in your network. If not, consider negotiating with the company or switching to an in-network provider. If that doesn’t help, you can file an appeal with your insurer or the patient advocate office in your state. If you’re not sure where to start, this guide from the Patient Advocate Foundation provides step-by-step instructions. doxo is a secure, all-in-one app that organizes your provider accounts and enables reliable payment delivery. You can use doxo for free with a linked bank account, or pay a small fee to use a credit or debit card. American Medical Response Billing