When the EMS arrived at Bobbie Joseph’s home last December, an ambulance bill was the least of her worries. The 83-year-old was suffering from a flare-up of a painful chronic nerve condition called trigeminal neuralgia, which made it difficult to speak, swallow, or breathe. She had called her husband, who was out picking up a prescription, and managed to let out a muffled grunt of affirmation when he asked if he should call 911.

For the 17 years that the Josephs have lived in Wake County, North Carolina, they’ve been patrons of the local EMS subscription program. They pay an annual household fee of $60, and in exchange, Wake County EMS promises to waive any costs of 911 ambulance services not covered by insurance. When the Josephs needed to call an ambulance once before, their subscription covered them as planned.

Yet this time, a $236 insurance bill landed in the Josephs’s mailbox. Because an ambulance from neighboring Johnston County had been dispatched to their home, the ride was not covered under the Wake County plan. Johnston County EMS has its own subscription program, but the counties don’t offer reciprocal coverage.

“I wasn’t even aware at the time what ambulance it was,” said Bobbie. “I didn’t care at that moment, because the main thing I knew was that I needed attention immediately, and I was not able to move.”

The Intercept found at least 24 states, from California to Pennsylvania, where public, non-profit, or for-profit EMS agencies have adopted similar models. Almost all of them trumpet the central benefit of relieving consumers from the pitfalls of surprise ambulance bills, while also providing the departments with supplemental funding. Change Healthcare, an EMS billing and health care technology company, states on its website that subscription programs present “new revenue opportunities” for EMS agencies and that they’re gaining traction nationwide.

When half of emergency ground ambulance rides result in often exorbitant out-of-network charges, paying a flat yearly or monthly fee for blanket protection might seem like a no-brainer. But it wouldn’t be unreasonable to wonder why it’s necessary for these programs to exist at all.

In a nation that deprioritizes health care for the sake of profit, emergency ambulance rides are not uniformly funded or operated as a public service. A network of regulatory failures have plagued the United States’ fragmented and underfunded EMS system for decades; in the absence of federal legislation, vulnerable patients are forced to bear the brunt of the economic burden.

Some Surprises Act

“No more surprise billing. No more,” President Joe Biden declared in February. His promise referred to the newly implemented No Surprises Act, but it was only partially true. While the bipartisan law offers a broad set of protections to safeguard patients from surprise medical bills, ground ambulance services are one glaring omission.

Citing insufficient data and the unique difficulties of federally regulating a complex world of local providers, the act instead required that the government convene the Ground Ambulance and Patient Billing, or GAPB, Advisory Committee. In November 2021, nearly one year after the No Surprises Act was signed into law, the Biden administration finally announced that it would be soliciting committee nominations. An accompanying press release from the Department of Health and Human Services stated that the committee would be required to submit a report recommending ways to protect patients from surprise ground ambulance bills within 180 days of its first meeting.

More than eight months later, it’s not clear if the committee has ever met. The administration has not shared any updates on the status of the GAPB Advisory Committee’s members, dockets, meetings, or promised report — or any reason as to why the committee appears to have stalled. The Department of Health and Human Services did not respond to The Intercept’s requests for comment.

As long as this bureaucratic impasse endures, patients could continue to be saddled with an aggregate $129 million in surprise ground ambulance bills every year. The New York Times previously noted that the rate of out-of-network bills for ground ambulance rides is “substantially higher” than many of the medical specialities actually covered under the No Surprises Act.

Air ambulance rides — in which a medical helicopter is dispatched due to the patient’s remote location or urgent condition — are covered under the act, after garnering attention in recent years for their own staggering out-of-network bills. According to Erin Fuse Brown, a law professor and director of the Center for Law, Health & Society at Georgia State University, similar market failures contribute to both air and ground ambulance surprise billing. Patients will always need to use emergency services, regardless of whether a provider is in their insurance network.

“They’re going to get called no matter what, “ said Brown, who has researched out-of-network air ambulance billing and legislation. “So then they might as well just stay out-of-network, and not expend the resources to negotiate the discount.”

Like EMS agencies, air ambulance companies also frequently offer subscription programs to purportedly protect subscribers against surprise bills. Despite their similarities, there’s one fundamental difference: The majority of air ambulance companies are owned by private equity firms, but nearly two-thirds of emergency ground ambulance rides are performed by government-based organizations.

Whether the service is public or private, a patient can’t control which service shows up when 911 is called — rendering the value proposition of these programs dubious. Bobbie Joseph learned this firsthand when she received her surprise bill, but other ground ambulance subscription programs have similar caveats. Unless an EMS agency’s website clarifies outright, it can be difficult for the person in need to know whether there are other ambulance services in their region that could potentially be dispatched.

“YOU PAY NOTHING!”

Some ground ambulance membership programs reviewed by The Intercept marketed themselves directly to Medicare beneficiaries — who cannot receive surprise bills, because Medicare is prohibited from “balance billing,” or charging patients for what their insurance didn’t cover, for emergency ambulance rides under federal law.

If an ambulance provider picks up a Medicare patient, they must accept Medicare’s reimbursement rate as their full payment, so a Medicare recipient’s bill would only reflect their deductible and copay.

“One of the things that was dubious about the practices of air ambulances is that they seemed to be indiscriminately marketing these membership programs, even to people who couldn’t be balance billed under law, because they were Medicare beneficiaries,” said Brown. “So if the ground ambulance providers are being very careful to screen out individuals and households who may have Medicare or Medicaid coverage, I think that’s a step in the right direction.”

But this isn’t always the case. “John Doe is billed $1512 for EMS transport to a hospital. He is a Medicare recipient,” states the brochure for New Haven, Indiana’s EMS subscription program. “YOU Pay $250.00 WITHOUT New Haven Subscription EMS. WITH New Haven Subscription EMS, YOU PAY NOTHING!”

Similarly, a FAQ sheet for an EMS subscription program in Caroline County, Maryland, asks why someone should subscribe if they already have “Medicare or other insurance.” The response states, “Medicare and most insurance plans will not cover 100% of the bills incurred for ambulance service. … If your insurance reimburses EMS any portion of the bill, we accept it as payment in full. However, if the insurance company denies the claim, you will NOT be charged anything further.”

Brown noted that the terms of these ground ambulance subscription programs are not immediately obvious. If they’re agreeing to waive balance billing for Medicare patients, she said, then they’re misleading, because Medicare does not balance bill. If they’re waiving cost-sharing altogether, like copays or deductibles, then Brown is concerned that they may violate federal fraud and abuse laws, such as the Anti-Kickback Statute, which makes it illegal for a health care provider to advertise financial incentives to attract potential patients if the provider bills its services to a federal health care program.

In 2003, the Department of Health and Human Services Office of Inspector General ruled that one ambulance subscription program was legal as long as it collected more subscription revenue than it wrote off in copays and deductibles, but the advisory opinion only applied to the nonprofit emergency ambulance service that requested it.

Since then, while some state and federal courts have examined air ambulance subscription programs, their ground ambulance equivalents have largely avoided federal scrutiny. A 2012 report from the U.S. Fire Administration cites subscription programs as a potential funding alternative for EMS services but advises that departments “seek legal advice when setting up a subscription program so that requirements of Medicare and Medicaid are met by the approach taken.”

“The majority of states have simply not addressed it one way or the other, so it’s not expressly prohibited or expressly permitted,” said Douglas Wolfberg, founding partner of EMS law firm Page, Wolfberg & Wirth.

Ambulance subscription programs might also run into legality issues under certain states’ insurance laws. In all New England states except Vermont, for example, ambulance subscriptions are considered to be insurance businesses and must be licensed as such. In other states, some membership programs explicitly clarify that they are not insurance policies — despite essentially operating in the same way.

Overall, ground ambulance subscription programs appear to operate in a legal gray zone, and without much regulation or oversight, the door remains open for potential consumer abuse.

Pointing Fingers

The growing adoption of EMS subscription programs nationwide underscores the financial issues that many public departments have faced for decades. The EMS Systems Act of 1973 provided over $300 million in funding for the development of a nationwide EMS system, but in 1981, the Reagan administration effectively dismantled the program by moving the principle funding from the federal government to the states. States were then given broad discretion over how to use the funds, and many did not allocate them toward EMS services.

“Some of these publicly operated ambulance services might be facing financial sustainability issues, and somewhere along the lines may have decided to directly bill as a way to finance themselves,” said Krutika Amin, Kaiser Family Foundation’s associate director for the program on the Affordable Care Act. “Contracting with insurance companies might require a level of administrative work that they might not have resources for.”

“If you’re working with a public fire department, the people who work there aren’t trained in network negotiation,” said Madeline O’Brien, a research fellow at Georgetown University’s Center on Health Insurance Reforms. “It’s very difficult for them to come to the table, and to know the rate that they should be charging, or how to even start with negotiations.”

Insurance companies often place the blame on ambulance providers, arguing that their billed rate is far too high. Indeed, uncovering the true cost of ambulance transportation is a difficult task. Wake County EMS Assistant Chief of Community Outreach Brian Brooks told The Intercept that a ride with basic life support is $600; Palo Alto, California, Fire Chief Geo Blackshire put the average cost of an ambulance ride at around $2,000. A recent investigation by Kaiser Health News and NPR reported that three nearly identical ambulance rides, each performed by a different Illinois public fire department, resulted in bills ranging from $1,250 to $3,606.

Conversely, emergency services professionals argue that federal Medicare and Medicaid reimbursement rates are too low, which leads them to increase prices and bill patients directly. The website for the Morgan County, Colorado, EMS states outright that “declining reimbursements by Medicare/Medicaid and commercial carriers” have caused the ambulance service to only be able to collect 35 to 45 percent of the amount billed, which “inherently impacts the fee for services.”

In April, Palo Alto launched a new EMS subscription program called Palo Alto FireMed, after receiving feedback that it could benefit the community. According to Blackshire, a significant amount of the city’s transports are provided to patients with Medicare or Medicaid, and in those cases, the EMS doesn’t fully recoup their costs. “Palo Alto FireMed is just another means for us to try and break even on what it costs to run this program,” said Blackshire.

Palo Alto FireMed was inspired by the Huntington Beach Fire Department’s subscription program, which launched in 1990. Long before surprise billing debates reached a national fever pitch, the goal of the program was primarily revenue generation: to increase response times for medical emergencies and improve equipment and supplies.

But in today’s expensive health care landscape, subscription programs might not be all that beneficial for some cash-strapped EMS departments.

“I would venture to say that we are not breaking even,” said Brooks. “There’s no benefit for us whatsoever. It’s completely just a way to ease the financial burden for somebody who has to be transported.”

Today, responsibility for EMS oversight is split among various federal agencies. The structure and funding of departments varies greatly, and while some are taxpayer-supported, others might rely fully on patient billing for their income or be volunteer-run. Given the high overhead costs of maintaining a 24-hour EMS program, some municipalities have outsourced their services to private ambulance companies entirely.

“I still don’t entirely understand how they managed to not be regulated by legislation,” said Caitlin Donovan, senior director of public relations at the National Patient Advocate Foundation. “To me, the more obvious solution is to bring back a public service that’s paid for in tax dollars.”

Other legislative solutions can be found by looking at states that have passed their own laws to remedy surprise ground ambulance bills, including by setting standard ambulance rates that must be reimbursed by out-of-network providers.

But until the federal government enacts across-the-board legislation, many Americans in unprotected states might have to turn to imperfect supplemental programs for peace of mind against surprise bills.

“I think that there’s really a frustration with the movement of ground ambulance legislation at the federal level,” said O’Brien, of Georgetown’s Center on Health Insurance Reforms. “Until you can bring those experts together and start having that conversation, this is kind of at a standstill.”