A Matter of Life and Debt

Some depleted their meager life savings. Others borrowed from friends or ran up credit card debt. Still others cut back on food and other basic necessities. All were shocked that the cause of their distress was an ambulance ride to a hospital for treatment following an accident, allergic reaction, chest pains, or another emergency situation.

Americans incur about $129 million in ambulance bills each year, according to a 2020 research article published in the journal Health Affairs. The average cost per patient was $450, although some patients incurred bills of $1,000 or more if they were transported long distances or received advanced treatments.

“An ambulance ride is often the most expensive journey of a person’s life,” Bobby Peterson, executive director of Advocacy and Benefits Counseling for Health (ABC for Health), a nonprofit public interest law firm in Madison, Wisconsin, tells The Progressive. “Patients are often stuck with bills if they have no health insurance or if their plans don’t cover the full amount.”

Public interest firms like ABC for Health are increasingly devoting attention to helping people resolve their ambulance bills, which are a significant part of the overall medical debt in the United States, estimated at $195 billion in 2019.

In the past five years, according to a Kaiser Family Foundation (KFF) survey of health care debt in the United States, published in June, more than half of U.S. adults reported incurring debt from medical or dental bills, a significant problem that affects approximately 100 million Americans. Additionally, half of U.S. adults don’t have the cash to cover an unexpected $500 medical bill.

The survey found that uninsured adults, Black and Hispanic people, parents, women, and people with lower incomes are the most affected by health care debt. Although one-third of those surveyed said they owed less than $1,000, nearly one in five said they didn’t expect to pay off their debt—ever. And 20 percent said their medical debt was due to ambulance services.

Unlike appointments with physicians and hospitalizations, ambulance bills often have a surprise factor involved, because patients usually incur the costs during a time of crisis, when informed decisions are difficult to make, Peterson says.

“Someone lying on the street bleeding after an auto accident isn’t in a position to find out what the ride will cost the way a patient does before deciding whether to make an appointment with a physician,” he says.

Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, a nonprofit legal advocacy group in Columbia, South Carolina, says that ambulance service debt can have long-term consequences. For example, patients with ambulance debt might not seek follow-up care, which increases their risk of disability or death.

Even if they do recover, the debt can take a toll on the mental health of patients who are “besieged with calls from collection agencies,” Berkowitz says. Unpaid ambulance bills “may cause constant worry and anxiety about being able to keep food on the table, as well as guilt about having to abandon dreams of sending their children to college. Decreases in credit scores may prevent families from renting housing or buying a car to get to work.”

Low-income, non-English-speaking patients may find themselves in a bureaucratic quagmire after calling an ambulance—like an elderly Egyptian couple in Madison, Wisconsin, who were left with a $940 ambulance bill when the wife became gravely ill.

“By the time the ambulance reached our home, my mother’s condition had deteriorated, and she couldn’t be saved,” the couple’s daughter, who asked to be identified only by her initials, H.N., tells The Progressive. “My dad was extremely distraught, so the ambulance crew evaluated him to determine if he also was having a heart attack. He wasn’t, so they did not take him to a hospital.”

Her father, who is retired and depends on his adult children for basic necessities, was terrified when he began receiving the ambulance bills. His daughter says he was covered by Wisconsin Medicaid, which should have paid for the service. Yet, despite numerous phone calls and written correspondence with the ambulance provider, she was getting nowhere. “Fortunately, we were not left with a crushing debt, because ABC for Health did everything possible to get the total bill paid through Medicaid and a financial assistance program,” she says.

The experience of H.N. and her family is not unusual. Surprise medical bills topped the list of health care concerns for those surveyed in a 2018 KFF poll. In that survey, 67 percent of Americans said they worried more about unexpected medical bills than insurance deductibles, prescription drug costs, or even paying for food, gasoline, and other necessities. About one in four of those who received large, unexpected medical bills said they came from a physician, hospital, or other provider outside of their insurance network.

To alleviate the problem, Congress included the No Surprises Act (NSA) in the Consolidated Appropriations Act of 2021. The NSA protects people covered under group and individual health plans from receiving surprise bills for most emergency services delivered by a hospital, physician, or other provider, even if the provider is outside the insurance network and the patient did not receive prior authorization.

The law, which took effect on January 1, 2022, also established a process for resolving disagreements between insurance plans and health care providers over payments, as well as between providers and uninsured patients who had received a good-faith estimate from the provider. According to KFF, “The federal government estimates the NSA will apply to about ten million out-of-network surprise medical bills a year.” It does not apply to people with Medicare, Medicaid, or the Indian Health Service, which already protect against surprise billing.

Although this legislation will go a long way to better protect consumers, it has one glaring loophole, says Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, a health care policy research group. “It does not apply to ground ambulances, which is unfortunate, because overall, ambulance services transport about three million privately insured patients to emergency rooms each year,” Adler tells The Progressive. “Half of these rides result in an out-of-network charge for patients with private insurance.”

“People with crushing ambulance bills often struggle alone in the shadows and don’t know where to turn before it is too late to save themselves from lifelong financial damage.”

The impact of a surprise ambulance bill on people without insurance can be even greater, because they are seldomly in a position to obtain an estimate of costs in advance. Patients who received emergency treatment but were not transported to a hospital can also end up with large bills.

“Although [ground] ambulance bills are 8 percent of medical debt, Congress omitted them from the No Surprise Act because the ambulance industry resembles the Wild West, with numerous types of providers and sources of payment,” Adler says. As The New York Times reported, Representative Bobby Scott, a Virginia Democrat and chair of the House Education and Labor Committee, said that figuring out the arrangement of the ambulance industry was so complicated that it might have jeopardized passage of the 5,500-page Consolidated Appropriations Act of 2021, which included $900 billion in COVID-19 relief and $1.4 trillion in federal government spending for 2021.

“About half of ambulance services are operated by fire and police departments and partly supported by taxpayers,” Adler adds. “The rest are for-profit or not-for-profit companies that towns, municipalities, and hospitals contract with for ambulance services.”

An increase in gasoline costs has prompted complaints by ambulance providers that payments for services are so low they are finding it hard to provide uninterrupted coverage.

After the 2008 recession, private equity firms increasingly began taking over public services like emergency care via ambulance, which generated a fundamental tension: the push to turn a profit while caring for people in their most vulnerable moments, a New York Times investigation found in 2016.

To resolve these problems, Scott included a provision in the NSA that established a committee to recommend federal policy changes and legislation to better regulate the ambulance industry.

In the meantime, some states have passed their own legislation to regulate the industry. Adler notes that a law passed in Ohio last year includes all ground ambulances, while other states’ regulations apply to only some ground ambulances. Maryland, for example, does not allow ambulances owned by local governments, volunteer organizations, or fire departments to bill patients, while other ambulance services can, according to KFF. “New York prohibits ground ambulance service providers from billing enrollees in certain plan types (HMOs, PPOs, EPOs) more than the in-network cost sharing,” KFF added.

South Carolina, however, has focused its efforts on reducing the impact of unpaid ambulance bills on providers, rather than patients, because delinquent bills have skyrocketed in many counties. A spokesperson for Charleston County told WCSC News that its EMS department is owed nearly $61 million from an eight-year period. County officials say they work with patients and offer repayment plans as low as $5 a month, but if that doesn’t work, they’ll send a bill to the state Department of Revenue to seize patients’ tax refunds.

“The loss of a state tax refund is blatantly unfair,” says South Carolina Appleseed’s Berkowitz, whose organization has urged state lawmakers to ban the practice. “We are a poor state, so tax refunds are often the only means the working poor have to prevent drowning in debt.”

In Wisconsin, ABC for Health has adopted a multifaceted approach of counseling, assisting in negotiations for voluntary repayment plans, and representing clients in court.

“People with crushing ambulance bills often struggle alone in the shadows and don’t know where to turn before it is too late to save themselves from lifelong financial damage,” Peterson, the organization’s executive director, says. “Our study of 5,023 court actions from 2017 to 2019, filed by five health systems in Wisconsin that were seeking to recoup funds from patients, found that 99 percent of the patients lacked legal representation, but the hospitals were represented by attorneys in every case,” he says.

People with ambulance debts will also benefit from new federal protections on debt reporting, Peterson says. As of July 1, paid medical debts are no longer included on credit reports. In the first half of 2023, the three national credit reporting agencies—Equifax, Experian, and TransUnion—will stop including any medical debts under $500 on credit reports.

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