New California law bans surprise ambulance bills

By Kristen Huang | CalMatters

The COVID-19 pandemic has taken a cruel toll on Daniel Mille’s family. But after two exorbitant ambulance bills, she’s afraid to call 911.

Her teenage son attempted suicide in 2022, Miele said. His mental health deteriorated during the pandemic, and he needed to be moved by ambulance from the emergency room in Roseville, where Miele took him, to a treatment center in San Mateo. The ambulance company hit Miele with a $9,000 out-of-network charge that was sent to collections “almost immediately,” she said.

The virus also left Miele with seizures that mimic the symptoms of a heart attack, she said. Miele called 911 the first time the seizure occurred. The 15-minute trip to the hospital costs $4,000 without insurance coverage.

“The last time I had one of my seizures, I practically said, ‘I’m going to die here at home … I’m not going to get another ambulance,'” Miele said. “Maybe I’d rather die at home than have more medical debt.”

A new California law that goes into effect Jan. 1 targets the kind of “surprise” ambulance bills that bogged down the Miele family even though they had medical insurance. These bills are in the form of out-of-network fees for commercially insured patients who have no control over which ambulance company responds to a call for help.

Under the new law, patients would only have to pay the equivalent of what they would pay for an in-network service. Health insurance companies and ambulance companies will have to settle the bill directly, even if they don’t have an existing contract.

Supporters of the new law say it will make a big difference to thousands of families like Miele’s. The second time Miele’s son needed emergency psychiatric care, the ambulance that arrived was part of the family’s insurance network. Their co-pay: $83.

Ambulance companies did not oppose the legislation, which includes guarantees that health insurance plans reimburse them for the services.

Californians hit with millions in surprise bills

The California Health Plan Association, which represents insurers, opposed the bill before it became law because of its potential to increase premiums by $67.3 million statewide. By contrast, people with commercial health insurance could save an estimated $44.5 million in direct charges for ambulance rides, according to a legislative analysis.

Katie Van Dinze, legislative advocate for Health Access California, said the law closes a longstanding gap in California consumer protections against surprise medical bills for those with commercial insurance. Health Access California, a consumer advocacy group, sponsored the new legislation.

“It’s the last gap left, but it’s a really big one,” Van Dinze said. “You can be insured, but it doesn’t matter.”

Approximately 14 million Californians with state-regulated commercial health plans will benefit from the law’s protections. According to an analysis by the Kaiser Family Foundation, 73 percent of all ground ambulance transports in California resulted in an out-of-network charge in 2018 among people with large employer insurance. California also has the highest average surprise ambulance bill in the nation at $1,209, according to a study released last year by the US Public Interest Research Group.

In a statement at the time of the legislation’s passage, Assemblywoman Tasha Boerner, the Carlsbad Democrat who authored the measure, said people have no control over which ambulance company picks them up during a crisis.

“The last thing anyone should be thinking about when they call 911 is whether they can afford the ambulance ride,” Burner said in his statement.

The law also protects uninsured people from running up a costly ambulance bill by capping their out-of-pocket costs at the higher of the Medi-Cal or Medicare rate. Medi-Cal is the state’s health insurance program for very low-income residents, and it already protects its enrollees from these types of accounts.

About 6 million Californians enrolled in federally regulated health plans won’t be protected by the law, but a national committee is working on a solution to the No Surprises USA Act, which protects Americans from many types of surprise bills, including ambulance rides, but not covering ground ambulance travel. These are usually Californians who work for large multi-state or multinational private companies with self-funded health plans. California residents can ask their employer what health plan they offer.

$4400 ambulance ride bill for newborn

Lainey Areballo and her family are grateful that future emergencies will be covered in California. Her health insurance company does not contract with ambulance companies in San Luis Obispo County, where they live, leaving them with no choice but to pay out of pocket.

In September, minutes after Areballo gave birth to her son Brady, doctors made the decision to move him to a larger hospital about 20 miles away. Brady was not breathing properly and had to be admitted to the neonatal intensive care unit. The ambulance came and took him away.

Over the next month, letters started arriving from the ambulance company; Areballo owed $4,400 on the transfer, she said.

“Here I am, you know, less than two months after giving birth, they told me I was going to be sent to collections,” Areballo said.

Insurance covered almost all of Brady’s five-day hospital stay, which totaled $109,000, Areballo said, but it would not pay for the out-of-network ambulance ride. Insurance eventually paid about a third of the bill after Areballo filed a complaint, but the remaining windfall still left the family’s finances in tatters. She ended her maternity leave early to return to work as a special education teacher to help pay the bills. She is on a $200 per month payment plan.

“It was definitely a surprise bill and one that I’m still paying,” Areballo said.

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