Herndon's health insurance had paid $838 and originally told Herndon he might owe a coinsurance of $93, but Denver Health billed him for the balance between what his insurance paid and the full cost of the ambulance ride. This practice, which generally occurs when someone sees an out-of-network provider, is called balance billing or surprise billing, and both state and federal laws have been passed to protect people from it.
In 2019, Colorado lawmakers passed a law prohibiting surprise medical bills. In 2020, the federal government passed a similar law called the No Surprises Act. However, there’s still one big exception to both laws, as Herndon recently learned.
“One of the issues that we were really only partially able to address was the ground ambulance issue,” says Adam Fox, deputy director of the Colorado Consumer Health Initiative (CCHI), which helped push the Colorado bill. “The law that we were ultimately able to pass included protections against surprise billing, at least, in emergency scenarios for ground ambulances that are private entities.”
But public entities like Denver Health retained their ability to balance-bill for ground ambulances. That includes both emergency transports from 911 calls and interhospital transfers. So even though Herndon was surprised by his bill, it’s legal, because Denver Health is a political subdivision of the state. That qualifies Denver Health as a government entity, and exempt from state or federal laws banning balance billing.
Fox says that public entities argued at the time the laws were being passed that their funding structures are different than private companies.
Why Public Ambulance Providers Can Still Bill You
According to Scott Sholes, EMS chief for Durango Fire & Rescue and president of the Emergency Medical Services Association of Colorado (EMSAC), the carveout made sense five years ago because there wasn’t a way to ensure public ambulance transport services could stay in business without the ability to balance-bill. However, public ambulance entities can get repayment from cities, counties or special districts — all while patients are hung out to dry.Herndon wants to raise awareness in Denver because Denver Health Paramedics responds to all 911 calls in the city requiring an ambulance — about 130,000 per year — so a lot of out-of-network patients are at risk of surprise ambulance bills.
“We have continued to see these public entities send people balance bills because we don't have adequate protections in those cases,” Fox adds.
According to Sholes, insurance companies determine what is reasonable to reimburse for ambulance transport, which is done without consulting EMS services about the actual costs of operation. He's always seen Colorado's legislation as a stopgap, though.
“We've seen this all along as a temporary measure while we sort this out,” he says. “We want to sort out the surprise billing thing, but we also need insurance companies somehow to be directed to pay reasonable reimbursement rates and that's not what we see.”
Herndon reported his case to CCHI, the Colorado Department of Public Health and Environment and the Colorado Attorney General’s office. He hopes that his story will be one of many that push lawmakers toward reconsidering balance billing exceptions.
“This is not something anybody knows is going on,” he says. “Especially with the law that supposedly protects people. This isn't supposed to happen anywhere.”
But the surprise statements are very real for anyone whose insurance doesn't list Denver Health as an in-network provider since Denver Health responds to every 911 call in the city, as is the case for Kaiser Permanente customers.
“The reality is, is there are still folks who are currently getting these balance bills from public ambulance entities,” Fox says. “There's not necessarily a good explanation or a reason to continue balance billing from our perspective.”
According to April Valdez Villa, a public relations and communications administrator at Denver Health, it’s important to keep balance billing exemptions in place for 911 responders so dispatchers don’t only accept calls for people to have good insurance, even though someone’s insurance status doesn’t show up on a 911 call.
“People could make guesses about the area of the city they’re responding to,” Valdez Villa says of emergency responders. “You’re making a lot of decisions in a very short amount of time and all you want to be able to focus on is that life-saving care.”
According to Valdez Villa, Denver Health only recovers 27 cents for every dollar it bills for ambulances and around 35 to 40 percent of 911 calls don’t end in transport, which is the only thing Denver Health charges for.
Because Denver Health contracts its ambulance billing to Apex Paramedics, Valdez Villa could not share why the agency recoups so little of what it bills for or how many customers per year receive surprise bills. Apex did not respond to multiple requests for comment.
“Everything costs something,” Valdez Villa says. “Especially when it comes to medical billing, things are really complicated and a lot of times what we find is that, through no fault of the patient, they just don't understand what their coverages and their insurance are.”
She says Denver Health tries to help people with payment plans and doesn’t want anyone to be scared of calling 911 because they might not be able to pay for an ambulance.
Herndon agrees. That’s why he thinks the billing loophole should be fixed.
More Efforts to Address Ambulance Billing
“People made this decision to screw over the most vulnerable people at the most vulnerable times in their lives,” he argues. “You're literally calling 911 and the message this sends is maybe you better not call 911. If you're going to be short on rent, if you're living paycheck to paycheck, maybe you better not call.” Sholes says he doesn’t want money to be a barrier to emergency care. That’s why he has learned all he can about insurance reimbursement and pushed for legislation this year to close the loophole. The financial crunch for paramedics has compounded in recent years as costs have gone up, he says, but the amount paramedics recover hasn’t. He wants insurance companies to pay more for ambulance services.
“We would love the whole balance billing issue to just go away as long as we don't end up going away with it,” Sholes says.
Tim Dienst, advocacy chair with EMSAC and CEO and Chief of the Ute Pass Regional Health Service District, points out that ambulance services don’t pick who they serve, unlike most other medical providers, and are on call 24-7, which heightens costs.
“People have a tendency to think of an ambulance as two people in a truck, kind of like a delivery service,” Dienst says. “They don't realize that paramedics and EMTs who staff those trucks are very well trained so that they can provide great patient care. …People still, to this day, refer to us as ambulance drivers, not paramedics and EMTs that provide health care.”
An ambulance costs around $300,000, not including thousands of dollars of other necessary medical equipment that goes inside the vehicle.
Dienst says it costs $2,781 per ambulance service in his district. That doubles in Durango, where Sholes operates.
In Denver, basic life support transports cost $1,470 and advanced transport costs $1,653. Mileage and fees for certain procedures or medicines can add to the costs.
“I see us as a service that has one foot in public safety and the other foot in health care, and when we go to try to increase reimbursement from either those two sides, they point to the other side,” Sholes says. “I'd be perfectly happy if we could balance this whole blending structure with the two sides understanding the challenges of the other and saying, 'yeah, we can work together and fund it.' …But that's not what's happening. It's always been that they point to the other side and it unfortunately leaves the patients caught in the middle.”
Both federal and state legislators are working on solutions, but progress is slow. In Congress, the No Surprises Act formed a Ground Ambulance and Patient Billing Committee that is developing official recommendations and plans to release them soon. At the state level, representatives Matt Soper and Karen McCormick introduced House Bill 1218, Ground Ambulance Service Rates & Billing, earlier this year.
The idea behind the state bill was to treat public and private ground ambulances the same for billing purposes, according to sponsors. The measure would have allowed local governments to assign rates of reimbursement for ambulances that insurance companies would then be required to cover.
However, Soper and McCormick asked the House Health & Human Services committee to lay the bill over on March 19.
“It’s certainly been challenging like anything in the legislative process, and sometimes you get to a point where you have to look for other ways,” Soper said before the bill was killed.
Stakeholders' support varied, according to Soper and McCormick, who said they wanted more time to address unique factors impacting every community. They committed to working on another bill over the summer and trying again next session.
EMSAC is committed to that work, too.
“The only fix to this is a legislative fix,” Sholes says. “I'm disappointed. I was hopeful that we were going to get something through this year. …It was pretty exciting to think about no longer balance billing our patients.”
Herndon has been trying to work with his insurance to cover more of the bill but his outcome is still up in the air.
“I can absorb this cost, it just infuriates me,” he says. “But I'll bet you 50 percent of the people that live on my street here can't.”
