Dan Gorenstein: Every year in America, ambulances make more than 20 million runs to the hospital — cyclists hit by cars, seniors paralyzed by strokes, kids shot by guns.

[Sfx: Ambulance sirens]

These rides give people in some of their worst moments their best chance at staying alive. But they can also leave a lotta people feeling blindsided.

Precious Mae Clark: I thought I was prepared. I thought I covered my bases. But this ambulance bill, it rocked my world.

DG: For patients with private insurance, as many as 1 out of every 4 ambulance rides could end up in a surprise charge. But cities and counties say they rely on these fees to fund life-saving emergency services.

Today, the price patients pay for these unexpected bills — and a federal committee’s fraught plan to end them.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

***

DG: Precious Mae Clark likes to be prepared.

PC: You know, I’m an overthinker. I’m a worrier.

Precious Mae Clark, 35, of Columbus, Ohio was shocked to learn her health insurance didn’t cover an ambulance ride that she says helped save her life.

DG: She opens every bill as soon as it arrives. [She] keeps a close eye on her credit score. And her hope is all this worrying will pay off one day when she and her husband can buy a home.

PC: I don’t want a fantasy house. I’m not a fan of those. I just want a house that we can call our own and my daughter and my dog can run in the backyard. So that’s how I imagine our life.   

DG: Precious, who’s employed by a lending company in Columbus, Ohio, has worked hard for that dream since arriving in the U.S. from the Philippines in 2020.

Last year, though, she saw how shaky life here can be. A medical scare walloped her with a bill for nearly $5,000. The solution? More protection, more preparation.

PC: I learned my lesson. I said this year, I’m going to get a lower deductible insurance. 

DG: She even bought extra coverage — a special policy that covers hospital costs just in case. And it turned out in January of 2023, she needed it. 

[Sfx: Hospital sounds]

PC: I was just trying to open my eyes… 

DG: Doctors had just told Precious that her lung had collapsed. A tube ran to her ribs. Someone told her she needed to be transferred from this emergency room to a full hospital.

But her lung, the tube, the transfer [were] all details. Precious focused on one thing.

 PC: I don’t care what you do to me, but, you know, just make me live. Make me live.

DG: Then doctors put her in an ambulance…

[Sfx: Ambulance sounds]

DG: 30 miles south to a hospital in Grove City, Ohio.

[Sfx: Ambulance sounds]

DG: In a strange room the next morning, [with] monitors beeping [and her] mind swirling, Precious was glad she had prepared herself, financially, for this medical crisis.  

PC: I was super confident that I have, you know, good insurance. So I was calculating my copay, and I’m good. So, no worries on that. 

DG: Yep, no worries — until a shock arrived in her inbox six months later.

PC: I thought it was just like those $20 copays, but when I opened it, it’s like, I panicked literally seeing it. I panicked, like, what is this?

DG: A bill for $7,370.45 — nearly twice what she and her husband make each month.

Precious Mae freaked out.

PC: Where am I going to get $7, 000? Maybe this is an error. Why is this so high? Was my insurance used by someone else? Why are you sending me another bill? $7? $7? $7,000? It kind of, like, clogged my brain.

DG: Research shows that when a patient calls 911 — or is transferred from one hospital to another, like Precious was that cold January night — more than half the time those rides are out of network. The insurance company explained to Precious [that] the ambulance she rode in was not covered.

PC: Does that even make sense that your insurance did not cover the ambulance that saved your life because it’s not “in network”? Like, does that even make sense?

DG: Like most people in crisis, Precious didn’t have the time or the power to pick her ambulance, like you might with a doctor or a dentist.

PC: After the lady explained to me on the phone, I was talking to her and I was crying. I was just super angry with the system.

It’s just so frustrating. What frustrates me so much is that I’m paying extra for better insurance. I’m paying extra every month on my paycheck, just so I can get the peace of mind. And then suddenly, that peace of mind was just, like, thrown out in the trash.

DG: All that extra time, money and effort spent trying to protect her family from a financial disaster for what?

PC: It sucks that you’re trying to work your ass off, be a good citizen; and yet, you get something surprising like this and you’re not prepared for it.

DG: Precious could imagine debt collectors calling, blowing through her savings.

PC: To be honest, when I saw that bill, I lost hope living here. I thought, “You’re not going to go anywhere here, because something’s going to pull you back.”

DG: She was grateful for the care that had kept her alive. And because she was alive, she refused to let a bill sink her and her family.

She called everyone she could — the hospital, the insurer, the ambulance company — [and] implored them to see her side of the story. She had no way of avoiding this ride. They had to reconsider. 

PC: It was a dead end with your insurance. It was a dead end with the ambulance. Like, that’s it. I just felt the entire system is bullshit at that point.

DG: Patients like Precious get tagged with up to $130 million a year in unexpected ambulance fees.

Congress had a golden opportunity back in 2020 to end all this when they banned nearly every other kind of surprise medical bill, but they punted.

The reason has a lot to do with who is sending these bills. Sure, some come from for profit players, but most come from places like the fire station down the street.

So, that’s where we dispatched senior producer Leslie Walker. Leslie’s mission: Follow the money; better understand who these surprise bills are coming from; and what all this money goes to.

[Sfx: Fire station chatter]

Leslie Walker: I get to Fire Station 2 with the SoCal sun beating down on me and a few palm trees towering overhead. Inside the firehouse kitchen, with close cropped hair and a crisp navy blue uniform, is Pete Lawrence.

Pete Lawrence: I’m the Deputy Fire Chief for Oceanside Fire. I’ve been here 34.5 years and I run the department’s finance, administration, billing and emergency management sections.

LW: The ambulance company that stuck Precious Mae Clark with her surprise bill is privately owned, but the majority of all emergency rides in the U.S. are delivered by government-run outfits like Pete’s.

PL: We run eight engine companies, one ladder truck, seven ambulances and they together run about 24,000 calls a year.

LW: About 80% of those calls are medical. Most of them [are] garden variety emergencies.

Firefighter-Paramedic Mike Presti: A mild-status trauma…

LW: The kinds of calls I saw as I rode around Oceanside with a couple of Pete’s guys. Our first stop [was] an older woman who’d taken a spill on some concrete steps.

Presti: You hit your head pretty good…

LW: Next, a 79-year old struggling to stand.

Presti: How long were you on the floor?

LW: To end our run, Mike Presti, the firefighter-paramedic relayed the call.

Presti: A 16-year-old not able to say words, not knowing what’s going on.

LW: Over about five hours, I saw Mike start a few IVs, attach a neck brace [and] run some basic medical exams, but some other crews out that day were responding to some really serious stuff. 

Ambulance Dispatch: Solano Beach. Traffic Collision. Engine 237. Engine 238. Medic 237… 

LW: Calls for car crashes, a suicide attempt, a person on meth in crisis, a pair of kids who had taken a parent’s pills.

Ambulance Dispatch: San Marcos. Traffic collision. Engine 143 and RA 144 at 2469 through 2699 North Twin Oaks Valley Road…

LW: Chief Pete says teams have to be ready for the severe calls, plus wildfires, mass shootings [and] pandemics. That takes a lot of people power and a whole bunch of medical supplies.

PL: Essentially, we are an emergency room on wheels. 

LW: He opens up the side door to Rescue Ambulance 212.

[Sfx: Ambulance door opens]

Rescue Ambulance 212 is one of Oceanside Fire’s seven ambulances helping to respond to roughly 24,000 calls a year.

PL: This is a paramedic ambulance. Its replacement cost nowadays is about $450,000.

LW: And is that just the equipment when you say that? 

PL: No, that’s just the vehicle!

LW: The equipment, Pete adds, is another $100,000 to $130,000. There’s the usual stuff: a gurney, a stair chair, bandages, splints…

PL: We carry back boards. We’ve got radios. Each radio is about $7,000.

LW: Then there’s the big ticket items. The drug box. 

PL: And all of the medications inside that drug box are about $30,000.

LW: There’s a $40,000 heart monitor that can pace, can defibrillate and can send all these readings to the hospital from the road. 

And the crown jewel: a machine that looks like a sleek white carry-on suitcase.

PL: It performs absolutely perfect CPR. You push the button, and it goes. It doesn’t get tired. It doesn’t take a break. It saves lives every year. 

LW: Pete’s voice even breaks a little talking about the miracles he’s seen this machine work.

PL: It’s just — you’ve got individuals who are clinically dead and we turn them over to the hospital and the hospital has got a fighting chance. Other than delivering somebody’s child in the back of your ambulance, having somebody show back up at your station and thank you is about as emotional as you’re going to get. And it just is an amazing experience.

LW: In the earliest days of emergency transport, undertakers volunteered their off duty hearses to shuttle neighbors to the hospital. Over time, the public’s bar has been raised just a bit, says Dia Gainor with the National Association of State EMS Officials.

Dia Gainor: So if you were to randomly, you know, survey citizens and say, “If your husband was having a huge heart attack right now and you called 911, what would you expect?” People are not going to say, “Oh, I expect a pickup truck and a guy with a box of Band Aids,” right? What’s the public’s expectation? A full-size ambulance, a well equipped, well trained crew who can save their husband’s life. Period.

LW: And arrive within 12 minutes. Today, cities and states often enshrine our ambulance expectations into law. 

In Oceanside, ambulances have to be on scene in 12 minutes 90% of the time. Providing this high-quality, potentially life-saving service means having a certain level of redundancy, inefficiency — having more expertise and more equipment than what many calls actually need. 

PL: The cost of readiness for public and private EMS providers is a huge cost for us, whether they go on a broken finger or on a cardiac arrest [call]. You don’t have the ability to say, “Leave us a message and we’ll call you back as soon as the unit’s available.”

LW: Pete says when you add up all their costs, the tab runs about $1,200 per ride.

PL: Our average reimbursement is about $610 to $620.

LW: That rate, says Pete, puts his team in a tough spot. Hit up patients — the people they serve — for the difference, or take taxpayer dollars — money that could instead be spent on libraries, homeless services, parks. 

But to the companies forking over 50% of that bill, they’ve paid their fair share.

James Gelfand: It’s one thing to get into a helicopter with a neurosurgeon and a team of nurses and a host of medications and machines keeping you alive, and it’s another to get into the back of essentially a van with an EMT and drive for five minutes to get to a hospital. But somehow both of these bills are going to be in the thousands of dollars. It doesn’t make sense.

LW: James Gelfand represents large employers who pay some of these ambulance bills. He’s president and CEO of the ERISA Industry Committee — sometimes called ERIC.

James says for him, the math here just doesn’t add up. A paper in Health Affairs shows for-profit ambulance bills tend to run much higher than publicly run ones, like Pete’s. He also points to instances when a full fire truck shows up for someone with a sprained ankle.

Gelfand: And the cost of paying for an Uber for those individuals might be $8 to $10. But I’m sure that those ambulances are billing the city thousands and thousands of dollars for every ride.

LW: Underlying these guys’ fight over numbers is a fundamental question. Who should shoulder the cost of this, again, potentially life-saving service?

Gelfand: I think it’s very easy to say that a patient shouldn’t be caught in the middle or be charged a bill, but it’s a lot more challenging to say how much should an ambulance be able to charge? And [for] the insurance company or the employer that’s going to have to pay, how much should they have to pay?

DG: Pete Lawrence agrees those are the essential questions. The federal government even charged him and a committee of 16 other advocates and experts with trying to answer them.

That committee rolls up its sleeves and Precious gets some good news after the break.

MIDROLL

DG: Welcome back. Pretty much everyone in Congress agrees patients like Precious Mae Clark should be shielded from out of network ambulance charges. And pretty much everyone in Congress agrees they want to avoid de-funding the Chief Petes in their own districts.

Dia Gainor of the National Association of State EMS Officials says the hard question for lawmakers is deciding who should pick the costs up instead.

Gainor: There’s no silver bullet here. If there was, we would have found it in the holster.

DG: Fourteen states have taken matters into their own hands, passing at least some protections for patients. And experts say two approaches are likely to get the most interest from Washington.

Tara Bannow: Let local governments name their price and force insurers to pay it.

Bob Herman: Just go with some percent of what Medicare pays and call it a day.

DG: Those are our reporting partners for this story: Bob Herman and Tara Bannow from STAT, the health news outlet. We asked them to give us the scoop on this pair of state fixes for surprise ambulance fees.

First up: Tara Bannow, who looked at the solution known as local rate setting. Tara, what’s the basic idea here?

TB: So this approach does two things. First, it bans ambulance providers from billing patients extra for out-of-network rides, like what happened to Precious. Second, it makes the patient’s insurer pay more instead.

Exactly what the insurer owes is based on a rate that’s set by either a city, a county or another local authority. These rates actually exist in a lot of places already. The purpose of these laws is to force health insurers to actually honor them.

DG: And how many states have passed this type of law, Tara?

TB: Four states so far, and they’re all very new laws. Arkansas and Louisiana’s laws took effect in August. And Texas and California have similar ones and they’re taking effect in January of 2024.

DG: So obviously it’s too soon to know how these laws are affecting the bottom lines of insurers, fire stations or for-profit ambulance companies. But what, at least in theory, Tara, is the biggest upside of this approach — aside, of course, from protecting patients? 

TB: I thought Butch Oberhoff, president of the Texas EMS Alliance, put the case pretty clearly.

Oberhoff: Local elected officials are the ones who know best about the true cost of providing EMS in their own communities.

TB: And, you know Dan, it’s also hard to ignore that most of the states taking this approach — Louisiana, Arkansas, Texas — are politically conservative places where raising taxes is very unpopular. So forcing insurers to pay these local rates is an appealing way to make sure that ambulance providers are made whole; patients don’t get surprises; [and] taxpayers don’t get stuck with the tab. 

DG: And I’ve got to imagine this approach makes insurers and employers — the ones paying these rates — sort of nervous, right? Like how much can they trust these home-cooked numbers?

TB: Yeah, critics argue that if ambulances can name any price, they lose any incentive to save money, [and] local governments could inflate rates — use insurers as a kind of cash cow to cover other costs. 

DG: And just to connect the dots here, Tara, that could ultimately hurt patients, right? If insurers’ ambulance costs go way up, they could turn around and raise premiums on patients like Precious. 

TB: In theory yes, though for some perspective here: Sources told us ambulance costs are a very small sliver of insurers’ overall costs. So, it’s unlikely that they radically change our premiums.

Backers of this approach, like Butch in Texas, add that local rate setting is public and transparent. Finally, at least one of these laws does include a cap on how fast the local rates can be hiked.

DG: Very good. Thanks so much, Tara. Really appreciate it. 

TB: You’re welcome.

DG: Bob, your turn. You got the skinny on another approach states have taken to this tricky question.

Bob Herman: That’s right, Dan. So this other fix has been adopted by two states: Colorado and Maine. Rather than letting local governments name their price, these states did something different. They use what Medicare pays for ambulance services kind of as a benchmark, and then they go up from there. So in Colorado, private insurers agreed to pay 325% of Medicare’s rate — and in Maine, they settled on 180%.

DG: And so this approach, Bob, seems a bit more like a compromise. Like, the local ambulance providers — the Chief Petes — won’t get every dollar they want, but they’ll get closer to what they think is the full cost of the care. 

BH: Yeah, I mean, how fair of a deal you think it is really depends on what you think of the rates Medicare pays. Now as you might expect, insurers like the lower government rate. But ambulance providers say Medicare pays way too little.

So, in Colorado, ambulances run by cities, towns and counties balked. They told lawmakers, [who offered] 325% of Medicare, they weren’t going to participate.

DG: Wait. Three times the government’s rate and they still turned it down?

BH: Yeah, exactly. So patients who happen to take one of these publicly run ambulances in Colorado can still get hit with a hefty bill. 

But, Dan, this whole Medicare benchmarking approach might be doomed at the federal level. I talked to Zach Gaumer, a consultant who used to advise Congress on Medicare policy.

Zach’s actually done the math. He mapped out how the current rates that private insurers pay ambulances compare to what Medicare pays, and Dan, it was all over the place.

Gaumer: The variation in the payments that I see suggests that almost whatever level they pick, there’s going to be significant winners or losers.

BH: It’s going to be really hard for any member of Congress to sign off on a plan that slashes their ambulance services, obviously.

DG: Thanks, Bob.

BH: You’re welcome, Dan.

DG: Just last week, we got a glimpse at how a debate on the Hill might go.

GAPB Committee Meeting: There’s a lot of blood, sweat and tears that have gone into this. So thank you so much for the significant time commitment…

DG: Pete Lawrence and the 16 other members of the federal Advisory Committee on Ground Ambulance and Patient Billing voted on a plan that will be delivered to Congress early next year.

GAPB Committee Meeting: Alright, Tara, if you’ll take the vote. Regina Crawford? Yes. Rhonda Holden? Yes. Patricia Kelmar? Yes.

DG: Almost every member agreed to end the surprises and instead charge privately insured patients a predictable max of $100 per out-of-network ambulance ride.

But when it came to deciding what insurers and employers should pay for those rides, things, predictably, got sticky.

Montage of GAPB Committee Meeting: There needs to be a role of the local community // That we wouldn’t have ambulance services, that’s nobody’s intention here. // I think that is imperative. // I also just think this is a huge bureaucratic boondoggle. // And I just simple can’t support it.

DG: In the end, a majority voted to force insurers to pay whatever rate state lawmakers or local officials set — with no cap on those rates. The other option — Congress using some multiple of Medicare — got just three votes.

To end things, I want to bring back all three of our reporters for this story — Leslie, Bob and Tara — for a couple last questions.

Bob, let’s start with you. 

One thing I’ve been wondering is why wouldn’t lawmakers just go with the solution Congress already came up with in 2020 when they banned other surprise bills: Force these ambulance providers and insurers to negotiate [and] reach a fair rate amongst themselves? 

Why reinvent the wheel here?

BH: Well the reality, Dan, is that negotiation — or arbitration process as it’s called — it’s been a disaster. The federal government released a report that said in the last quarter of 2022, there’s been more than 100,000 disputes alone. Now imagine doing that for millions and millions of ambulance rides a year. That just doesn’t seem tenable to most experts out there.

DG: Fair enough. But I guess, the alternative here of lawmakers, whether in Washington or on the local level, just setting rates on their own seems like a tough sell too.

Tara, what’s the future hold here if Washington continues to kick this can down the road?

TB: It’s impossible to predict exactly how many more states would pass their own laws, but the truth is, Dan, no matter how many states pass these surprise bill bans a huge chunk of patients in those states will still be exposed.

Most people who get insurance through work in the U.S. — about 130 million of us — get it from employers who manage their own insurance plans. These plans — so-called ERISA plans — are exempt from a lot of state regulations including these surprise bill bans. 

DG: And that’s the very same reason Congress decided to act on those other kinds of surprise bills back in 2020. 

TB: Exactly.

DG: Alright, last question, Leslie. Let’s get back to this issue you raised in the first half of the story. You had that great quote from Dia Gainor, that we now expect a lot more than a dude in a pickup truck with a box of Band-Aids when we call 911.

LW: I mean, I definitely do.

DG: [Laughs] Me too. Now we just talked a lot about insurers and ambulance providers … but does the public also need to do something differently here for this whole system to work?

LW: Yeah, and you know, I’m glad we’re coming back to this cause it’s easy to miss if we only focus on the role of insurers here. And a few experts I spoke to, including Dia, said they do believe we need a public reckoning around emergency services. And that starts with a more honest conversation about what an ambulance ride actually is.

Is it just a taxi to the hospital? Is it an emergency room on wheels? Or is it something more like public service, like our police and fire departments?

Our answer to that question could lead to pretty different funding systems that health insurers may or may not have a large role in.

DG: Right, if it’s a public service [then] health insurers may not factor in much here at all, right?

And just like we asked Bob and Tara, Leslie, I’ll ask you the same: Have states tried anything here that we can learn from? 

LW: Yeah, I was actually surprised to learn that 13 states plus Washington, DC have passed laws designating emergency services as “essential.” It’s kind of a way to kind of force local governments to figure out what level of ambulance service they want and how to pay for it.

And Matt Zavadsky with the National Association of EMTs told me those conversations could get pretty thorny. He pointed me to Charlotte, North Carolina where, earlier this year, the county did actually decide to lower their ambulance expectations and save taxpayer money. 911 callers with less urgent needs can now wait up to 60 [or] even 90 minutes for an ambulance.

Zavadsky: The reality is that local communities have a very difficult decision to make: what they want the service level to be and how much they’re willing to fund. And that is the intersection of what your wallet can bear and your stomach can withstand.

DG: If Congress punts again on a path forward, public servants like Pete and patients like Precious will still be left in the lurch.

For Pete, California’s new law forcing insurers to pay local rates for ambulance rides applies to just a small fraction of bills. And, a chunk of public money that Pete’s team relies on from a local sales tax goes before voters in 2024. If that vote fails, Pete’s preparing to cut at least three ambulances from his fleet.

As for patients, without federal protection, many will continue to rely on what’s become a sadly predictable playbook in American health care: Pass a hat around on GoFundMe, beg a journalist to shame your insurer or spend hours on elaborate appeals processes.

Precious opted for the latter two. With help from STAT’s Bob Herman and a whole lot of her own letter writing, Precious heard back from her insurer on September 23.

PC: I was like, was there an error again? I will have to owe more? So I opened it with so much, so much fear and I saw it’s zero dollars. 

DG: Her insurer had decided to pay the entire bill — chalked the whole situation up to a “manual processing error.”  

PC: When I saw it, like, we were jumping — me and my daughter — like, oh my God, thank you Lord! I was like, I felt like I won, like, Oh my God, I won a case in the court! I’m still shaking right now because I did not expect it to be zeroed out.

DG: After Precious, her daughter and their dog did their happy dance, they got in the car. And Precious remembers the song she played on her drive home.

PC: This is my fight song. Take back my life song. Prove I’m alright song. My power’s turned on. Starting right now, I’ll be strong. I’ll play my fight song. And I don’t really care if nobody else believes. Cause I’ve got a lot of fight left in me. 

DG: A perfect song, says Precious, but poor policy. People need more than some luck and a little fight. That’s why she’s sharing her story. She’s hoping, she says, for change. 

I’m Dan Gorenstein. This is Tradeoffs.