Medical Transportation Costs in Workers Compensation

INTRODUCTION

The cost of ambulance services has risen in recent years—a single trip can exceed $45,000 for an air ambulance service and $1,400 for a ground ambulance service. Medical transportation in workers compensation (WC), however, can take many different forms. These include air ambulances, emergency and nonemergency ground ambulances, nonemergency transportation to and from medical appointments, mileage reimbursement for instances where the injured worker can drive themselves, and other ancillary transportation-related services.

Recently, air ambulance services and their associated costs have garnered attention. The US Congress, the National Association of Insurance Commissioners, and several state governments and related stakeholders have explored issues surrounding the cost of air ambulance services. In response, several states, as well as the US Congress, have introduced legislation aimed at addressing these concerns.

In the WC arena, much of the discussion has centered around a state’s ability to regulate air ambulance reimbursement rates. Some states have fee schedules that encompass air ambulance services, which are intended to regulate WC maximum allowable reimbursements (MARs). However, the federal Airline Deregulation Act of 1978 (ADA) expressly preempts state law “related to price, route, or service of an air carrier.” The question of which law governs fee schedule limitations on air ambulance reimbursement has led to legal challenges in several states. So far, state and federal courts have largely found that the ADA preempts state WC laws and regulations limiting air ambulance reimbursements.

OVERVIEW OF MEDICAL TRANSPORTATION COSTS

Costs for transportation services make up a smaller percentage of total WC medical costs than other medical cost categories, such as physician or facility services. Payments for transportation services provided during 2017 vary by state, representing less than 2% of total WC medical costs countrywide;1 and exceeding 3% in some jurisdictions.

The most frequently used transportation services are for nonemergency or ancillary services, accounting for almost 60% of transactions for transportation services provided in 2017. In contrast, most payments are for ambulance services,2 accounting for nearly 70% of payments for transportation services provided in 2017.

Ambulance services include both ground ambulance and air ambulance. Before looking at the cost of these services, it is important to discuss how reimbursement for these services is determined. Typically, reimbursement consists of two components: a base payment and a mileage payment. The base payment rate reflects the level of service intensity and varies based on whether the transport:

  • Is emergency or nonemergency
  • Requires basic life-support staff (BLS) or advanced life-support (ALS) staff
  • Is ground or air transport

The mileage payment rate reflects the cost of using the ambulance, including fuel and maintenance. While ground ambulance transports are utilized at a much higher rate than air ambulance transports, the cost per episode for ground transports is significantly lower. The frequency and cost per episode vary for each type of ground (emergency and nonemergency) and air ambulance (fixed- or rotary-wing) transport.

GROUND AMBULANCE TRANSPORTS

For services provided in 2017, there were approximately 45,000 ground ambulance episodes.3 Chart 1 displays the average payment per episode for ground ambulance transports,4 which has increased since 2013, reaching an average of $820 in 2017.

Chart 1

The payment per episode varies widely; in 2017, some payments were below $400 and some were above $1,400. As mentioned, reimbursement varies based on several factors, including whether the transport is emergency-related.

The use of an emergency ground ambulance service could be necessary during a transport to a hospital emergency department. On the other hand, a nonemergency ground ambulance service could occur during a scheduled transport from one facility to another. In 2017, nearly 90% of ground ambulance episodes were emergency transports. Chart 2 displays the average payment per episode for emergency and nonemergency ground ambulance episodes5 for the base and mileage components.

Chart 2

The average payment per episode increased for both emergency and nonemergency episodes since 2013. The average base payment is higher for the more service-intense emergency episodes. In contrast, the average mileage payment is higher for nonemergency episodes. This is due to a higher average number of miles travelled per episode, because the mileage rate is typically the same for emergency and nonemergency transports. Although the base payment is higher for the more service-intense emergency transports, the number of miles driven for nonemergency transports outweighs that difference, causing the average payment per episode to be higher for nonemergency episodes compared to emergency episodes.

AIR AMBULANCE TRANSPORTS

Air ambulances are typically used during emergencies, for long-distance transports, or when a ground ambulance is unable to reach an injured worker. In 2017, there were more than 2,300 air ambulance episodes. While air ambulance episodes represented approximately 5% of all ambulance episodes in 2017, they accounted for nearly half of all ambulance payments, illustrating their relative costliness compared with ground ambulances.

Chart 3 displays the generally increasing average payment per episode for air ambulance episodes over the last five years, with 2017 being slightly lower than 2016. The payment per episode varies widely within each year. For example, in 2017, payments ranged from less than $5,500 to more than $45,000 for an air ambulance episode.

Chart 3

Air ambulances can be broken down into two categories: fixed wing (e.g., an airplane) and rotary wing (e.g., a helicopter). Rotary-wing ambulances can be used in place of ground ambulances in emergencies where the injured worker needs to be transported a short distance quickly. Another important characteristic of a rotary-wing ambulance is its ability to land in a variety of locations, including locations that could be difficult for a ground ambulance to reach. On the other hand, fixed-wing transports are typically utilized for longer distance travel.

Historically, rotary-wing episodes have been more prevalent than fixed-wing episodes; rotary-wing episodes accounted for approximately 85% of both payments and episodes for air ambulance services from 2013 to 2017. Chart 4 displays the average payment per episode for fixed-wing and rotary-wing episodes for the base and mileage components.

Chart 4

The average payment per episode increased for both fixed-wing and rotary-wing episodes since 2013. The average base payment is higher for rotary-wing episodes compared with fixed-wing episodes. In contrast, the average mileage payment for fixed-wing episodes is approximately double that of rotary-wing episodes. This is due to the average distance per fixed-wing transport being approximately four times that of the average rotary-wing transport.

CONCLUSION

Payments for medical transportation represent a relatively small percentage of total medical benefit costs in workers compensation. The average payment per episode for an air ambulance is, however, costly, exceeding $20,000 in recent years. Payments for ambulance services, including ground and air, account for more than 75% of total medical transportation costs, and the average payment per episode for ambulances, both ground and air, has increased since 2013. Going forward, NCCI will continue to monitor changes in benefit cost and utilization trends of medical transportation services, as well as related legislation and judicial decisions.

NOTES/REFERENCES

1 Unless otherwise noted, the source for all data, for states other than Texas, is NCCI’s Medical Data Call for Service Years 2013–2017. A service year is a loss accounting definition where experience is summarized by the calendar year in which a medical service was provided. For Texas, the data source is the DWC Medical State Reporting Public Use Data File (Texas Department of Insurance, Division of Workers’ Compensation, Austin, TX). Countrywide includes data from the following states: AK, AL, AR, AZ, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MO, MS, MT, NC, NE, NH, NM, NV, OK, OR, RI, SC, SD, TN, TX, UT, VA, VT, and WV.

2 In this analysis, ambulance services included any data reported with Healthcare Common Procedure Coding System codes A0425, A0426, A0427, A0428, A0429, A0430, A0431, A0432, A0433, A0434, A0435, and A0436.

3 An episode refers to a service or set of services provided to a claimant on a specific date.

4 A ground ambulance episode, which includes emergency and nonemergency services, has at least one of the following ambulance services on a specific date: A0426, A0427, A0428, A0429, A0432, A0433, and A0434. The payments per episode are inclusive of the mileage component.

5 An emergency ground ambulance episode has at least one of the following ambulance services on a specific date: A0427, A0429, A0432, A0433, and A0434. Nonemergency ground ambulance episodes consist of the remaining ground ambulance episodes.

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.





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