Need an ambulance? Some Hoosiers might not be so lucky.
Since 2018, the state has lost hundreds of paramedics, emergency medical technicians (EMTs) and ambulances, and several independent emergency medical services (EMS) providers have closed, even as 911 calls are on the rise.
Ambulance providers say insurance companies' stinginess is undermining their financial stability and forcing large bills on unwitting Hoosiers. They are resorting to legislative action to force health insurance companies to pay for out-of-network transportation.
Entrepreneurs, however, argue that Bill 1385 would disproportionately hit small and medium-sized employers, forcing them to shift costs to employees and customers.
Experts and lawmakers pointed fingers many times during Wednesday's nearly two-hour discussion.
This prompted Sen. Fady Qaddoura, D-Indianapolis, to call the issue a "classic" example of the three failures theory: government, the for-profit market, and the nonprofit sector.
The bill's author, Sen. Tyler Johnson, a physician, said he's heard from people across the state about "unbelievable demands" of $10,000 and $15,000. He called it "unacceptable."
"I believe we've created a product that will stabilize this industry so you have an ambulance when you need one (and so you don't have an unexpected bill at the end of the day)," Johnson, R-Leo, said of the legislation.
The committee voted 7-1 in favor of moving the bill to the full Senate. Sen. Mike Gaskill, a Pendleton representative, voted against it.
The long wait and the legislative solution
Half of Indiana's 92 counties have "ambulance deserts," where residents live more than 25 minutes from an ambulance station, according to a 2023 study by the federally funded Rural Health Research and Policy Centers.
Indiana data shows that between 2018 and 2021, the state lost 300 paramedics, 1,000 EMTs, 200 ambulances and several providers. During that time period, call volume increased 66% to more than 1.25 million calls.
Brian Burdick, a Barnes & Thornburg partner representing the Indiana Ambulance Association, told lawmakers they have just three levers to pull: public insurers such as Medicare and Medicaid, private insurers and ordinary Hoosiers. Someone has to pay the bill.
The bill requires health plan operators to pay for out-of-network ambulance services at the rate established by the county or municipality in which the transportation began. If no local rate is established, plan operators would be required to pay 400% of the published Medicare prime rate or the amount billed by the ambulance provider, whichever is less.
According to the financial analysis, the Medicate rate for 2023 is about $266 with various mileage rates.
If the health plan makes payment, the bill will be paid in full, in addition to a co-payment or deductible on par with in-network patient payments. In this case, the law prohibits ambulance providers from billing patients.
The legislation also removes the requirement that health plan operators negotiate with ambulance providers interested in obtaining "in-network" status.
Lawmakers passed an amendment Wednesday to remove the state employees' health care plan from the law's requirements. Committee Chairman Sen. Scott Baldwin, a Noblesville representative, said the change was made to avoid changes to the state's finances because this is not a budget session.
Emergency workers say they are on the edge of a precipice
Kim Godden, government relations manager with Illinois-based Superior Ambulance Service, says patient billing is perplexing.
"Anyone who calls an ambulance. already having a bad day. They expect their insurance company to pay for that ambulance ride," she said. "... And when we bill them, they call and ask, "Why isn't this covered? And why aren't we in-network?"
She added that for out-of-network trips, the insurance company can send a check to the patient, not the ambulance provider. When the provider comes in, the money has already been spent.
"We are here to serve. We're here to provide assistance regardless of someone's ability to pay. But on the way back, when we bill a person, they are confused," Godden said.
Joel Benz, executive director of Three Rivers Ambulance Authority in Fort Wayne, says he spent $800,000 on billing last year "trying to track the dollars that are owed to us."
Joel Benz, executive director of the Three Rivers Ambulance Authority of Fort Wayne, testifies in support of the ambulance insurance benefits bill, Wednesday, Feb. 14, 2024.
When insurers pay directly for ambulance services, the payment amount may not match the cost of services.
Benz said it costs his company $633 each time a patient is transported to the hospital, and called the bill "asking to get what's owed to us."
Justin Ferrell, chief operating officer of Terre Haute-based Trans-Care Ambulance Company, said that just this week a private insurance company offered to pay $200 on a $2,500 bill.
"They offer less than Medicare and Medicaid," he noted. Those government health insurance programs have notoriously low reimbursement rates.
Meanwhile, he says, ambulance equipment is getting more expensive: stretchers at $25,000 apiece, heart monitors at $40,000 and another $20,000 to $40,000 for other supplies. Add to that salaries, benefits, insurance, building rent, gasoline - about 20,000 gallons a month - and costs skyrocket, Ferrell says.
The bill's author, Rep. Brad Barrett, likened insurance coverage to shrink-wrap at the grocery store.
"You buy a box of cereal for two years, and then one day you pick it up and it's half full - it's the same box," Barrett, the Richmond representative, said Wednesday. "That's exactly what happened with the insurance product we offer our employees. It was cut out. The federal government can't fix it, (but) we as a state can fix this problem."
Businesses fear higher insurance premiums and unfairness
But those who pay premiums said the legislation would hurt them by not addressing the root cause of the funding crisis.
This is because, under federal law, states can only regulate a small portion of insurance plans - those likely to be owned by small and medium-sized businesses.
"We sympathize with the financial hardship and crisis the ambulance industry is experiencing, but we respectfully oppose Bill 1385 because of the increased costs that will be passed on to small business owners," said Natalie Robinson, director of the National Federation of Independent Business Indiana.
She argues that the legislation could increase health care costs by raising premiums, which companies would pass on to employees and customers. She says businesses are already struggling to cope with rising insurance costs and inflation, as well as labor shortages raising wages.
Senator Mike Gaskill questions witnesses in committee on Wednesday, February 14, 2024 He strongly opposed the ambulance insurance benefits bill.
"Let's not draw water from the same dry well - which is small businesses paying into their insurance plans - to try to solve the problem," agreed Andrew Berger, senior vice president of government relations for the Indiana Manufacturers Association.
"The money generated from the 400% will not be great. It won't fix the budget problems in ambulance services," he added. "It's not going to eliminate or help deal with the antagonism between markets and ambulance providers."
Berger suggested that EMS be considered a "core service," like police and firefighters, and funded at the state level.
Blair Hadley, director of government relations for the Insurance Institute of Indiana, says the legislation affects "a small portion of the population," especially after the state's plan is repealed.
When Senator Gaskill asked why local governments don't "step up" and provide ambulance services, Ambulance Association spokesman Burdick said he believes it is because such services are not required by Indiana law and constitutional tax restrictions already limit local revenues.
In addition, Gaskill fears the bill could raise costs and reduce options for those who buy health insurance on the marketplace, such as his adult children who work in the family business.
Others also blamed the federal government.
"I'll be honest: If Medicaid was holding up its end of the bargain, we might not be having this conversation," said Ashton Eller, vice president of health and employment for the Indiana Chamber of Commerce. Reimbursement rates are too low, he said.
Godden of Superior Ambulance Service later countered that commercial insurance must also fulfill its end of the bargain.