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Last Updated: 6/24/2024

Issue: Air ambulances are used to quickly transport patients in life-threatening situations. Air ambulances are usually helicopters equipped with medical equipment and staffed by medical professionals just like traditional ground ambulances. According to the Association of Air Medical Services, more than 550,000 patients in the U.S. use air ambulance services every year. Air ambulance services have grown significantly in recent decades; in 2002 there were approximately 400 dedicated air ambulances, but as of 2023 there are 1,045 Air Ambulance Services businesses in the US, with countless transport vehicles in the air. Possible reasons for the growth of this industry include an aging population, a decline in the number of emergency departments in existing hospitals, and changes in the delivery of healthcare in rural settings. There are also concerns that such high growth in this industry may be an indicator of medically unnecessary use.

It's estimated that the median cost of air ambulance services is between $36,000 and $40,000. These high costs can be attributed to maintenance of expensive equipment as well as the need to staff specialized medical personnel around-the-clock.

Background: The Airline Deregulation Act of 1978 (ADA), was intended to encourage competition in the airline industry, prohibits states from regulating the prices air carriers charge. Therefore, state laws passed to regulate the costs of air ambulance services are preempted by the ADA. In contrast, traditional ground ambulance services are regulated under the ACA as well as any applicable state laws.

Over the past decade, many states have reported issues with air ambulance providers not affiliated with any hospital or insurance carrier. This leaves patients in some areas with no in-network choices for life-saving care while out-of-network air ambulance providers can leave patients with enormous bills. Additionally, although Medicare, Medicaid, and most private insurers provide some coverage for air ambulance services, reimbursement rates are often far lower than what air ambulance providers bill. This can lead to a practice known as balance billing where a provider bills the patient directly for any amount not covered by insurance.

This issue can also affect workers compensation insurance and auto insurance as air ambulance flights can often be required in workplace or auto accident situations which can then lead to billing confusion. 

In lieu of Congressional action on this issue, some states have looked for alternative ways to help protect consumers from extremely high bills. However, courts continue to find that state legislation in this area is preempted by the federal ADA . 

In December 2020, Congress passed the No Surprises Act, legislation that largely ends the practice of surprise out-of-network medical billing. The No Surprises Act went into effect January 1, 2022.  The law applies to air ambulance operators as well as out-of-network health providers and facilities providing emergency and non-emergency care.   Additionally, in efforts to remain transparent, the No Surprises Act requires providers of air ambulance services to submit data to the Department of Health and Human Services. Data collected will contain information on transportation and medical costs, details on air ambulance bases and aircraft, the number and nature of air ambulance transports, payor data, and data on claims denials. Eventually this information will be made publicly available in a report that will help government officials understand what is driving the high costs of air ambulance services.


Status: The FAA Reauthorization Act of 2018 included a provision to appoint an advisory committee on air ambulances and patient billing. The goal of the committee is to make recommendations to improve the disclosure of charges and fees for air medical services, better inform consumers of insurance options for such services, and protect consumers from balance billing. The U.S. Department of Transportation announced the membership in September 2019 which includes North Dakota Insurance Commissioner Jon Godfread. The committee issued a report in March of 2022 that includes recommendations on disclosures, disclosures, best practices for contract and network negotiations, and areas for future data collection and study. The committee also recommends that the U.S. Congress should amend the ADA to avoid preemption of state laws in a few key areas relating to air ambulances. The NAIC continues to monitor the work of the committee.


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