How New York’s Ground Ambulance Law Impacted Emergency Prices

by Jon Scaccia December 2, 2024

Imagine being in a medical emergency, vulnerable, and unable to choose your ground ambulance provider. When the ambulance arrives, the last thing on your mind is whether it’s in-network. This was the reality for many people until New York took a bold step in 2015 by enacting surprise billing regulations to shield patients from unexpected out-of-network (OON) ambulance charges. While the law aimed to protect patients from financial shock, recent research uncovers that it may have come with an unexpected price: higher overall costs.

Understanding the Regulation

New York’s 2015 “Emergency Medical Services and Surprise Bills Law” prohibited providers from sending surprise balance bills to patients for emergency ground ambulance services. The law tied OON reimbursements to “usual, customary, and reasonable” (UCR) rates. This measure was intended to create fairness, ensuring patients weren’t responsible for hefty bills they couldn’t predict or control. But what actually happened when this policy went into effect?

A recent study by researchers using 2012-2019 commercial claims data examined how New York’s policy impacted prices. They compared the state to others without similar laws to see what changes occurred. The results? Eye-opening.

What the Data Revealed

After the law’s implementation, emergency ground ambulance prices in New York rose by 13% compared to control states. In-network prices saw an even higher increase—21% above control states. OON prices weren’t far behind, climbing 19%. For fully insured health plans, these increases were consistent, suggesting that the policy may have empowered providers in their negotiations with insurers.

But what does this mean for patients? While the regulation succeeded in shielding patients from direct out-of-pocket surprise bills, the overall rise in reimbursement rates hints at a broader impact. These higher costs don’t just vanish; they feed into the premiums and expenses shared by all insured members. For many, this means higher insurance premiums over time.

Why Did Prices Rise?

This uptick in prices points to the intricacies of setting payment benchmarks. By tying OON payments to UCR rates, which reflect market charges, the policy may have indirectly given providers more leverage. With providers now more confident in their potential OON earnings, they could negotiate higher rates for in-network agreements, boosting overall prices.

Interestingly, this trend wasn’t isolated to fully insured plans. Researchers also found potential spillover effects on self-funded plans, where employers take on the financial risk of insuring their employees. Although these plans are exempt from state regulations, they often align with the same provider networks and contracts as fully insured plans. The analysis showed that in-network prices for self-funded plans increased by about 18%, although OON price changes were minimal.

The Broader Context: A Federal Policy Gap

The findings underscore a glaring gap in current federal protections. While the No Surprises Act (NSA) of 2020 covers a wide range of emergency and non-emergency services, it notably excludes ground ambulance services. This leaves millions at risk of receiving unexpected bills when they need urgent transportation. In fact, ground ambulance rides account for significant patient debt—79% of emergency ambulance trips are billed as OON.

Without federal oversight, states like New York have attempted to fill this void with varying degrees of success. The 2023 federal committee on ground ambulance billing even recommended expanding the NSA to include these services. However, as New York’s experience shows, how these policies are designed is crucial. Regulations must strike a delicate balance—protecting patients without driving up the cost of care.

Why This Matters for Public Health

For public health practitioners, the implications are clear: policy design matters. The goal of reducing patient financial burden can sometimes create ripple effects that impact the broader healthcare system. New York’s law highlights how state-level regulations can influence healthcare costs beyond their intended scope. Public health experts and policymakers need to consider both direct and indirect consequences when crafting similar measures.

Practical Takeaways for Policymakers

1. Careful Benchmarking: Policies linking reimbursements to market-based charges should be approached with caution. While they provide immediate relief for patients, they can inadvertently inflate prices.
2. Provider Incentives: Ensuring that providers participate in networks is key. Strategies that reduce their reliance on OON earnings could stabilize costs.
3. Data-Informed Decisions: Continuous evaluation using claims data and price analysis can help policymakers adjust regulations to mitigate unintended consequences.

Join the Conversation

What are your thoughts on state-level surprise billing regulations? Have you experienced challenges with emergency ground ambulance costs in your community? Share your perspectives in the comments or on social media.