HLTH 4203 Module 2 Policy Impact Analysis Example

The Ride the Law Left Out: How the No Surprises Act's Exclusion of Ground Ambulances Shapes One County Service's Billing, Contracts and Patients

Student Name

American College of Education

HLTH4203: Introduction to Healthcare Administration

Module 2 Assignment

Instructor Name

October 12, 2026

The Policy and Its Gap

The No Surprises Act, passed as part of federal appropriations legislation at the end of 2020 and effective in 2022, protects most insured patients from surprise bills when they receive emergency care from out-of-network providers or when clinicians outside their network treat them inside a network hospital. In those situations a patient owes no more than the cost sharing an in-network provider could charge, and providers and insurers settle the rest between themselves. Air ambulance services are covered. Ground ambulance services are not. The law notably does not apply to ground ambulances (Adler et al., 2023), and it created an advisory committee to study the problem instead of resolving it.

The exclusion matters because ground ambulance bills are a common source of surprise charges. Using claims from a large national insurer for 2013 to 2017, Chhabra et al. (2020) reported potential surprise bills on seven in ten ambulance rides, with a median of $450 for a ground trip, and that out-of-network ground bills, though smaller than air bills, were more common and totaled about $129 million a year for that insurer's members alone. A patient cannot choose an in-network ambulance while having a stroke, which is the reason surprise billing protections exist, and the reason the gap is hard to defend.

How the Gap Reaches Our Service

Our composite nonprofit ambulance service, which serves one county under contract, is in network with Medicare and the state Medicaid program, which set their rates and prohibit billing patients beyond allowed cost sharing. With commercial insurers, the picture is mixed. We have contracts with two of the five largest commercial plans in the county; for patients covered by the other three, we are out of network. When one of those plans pays less than our charge, our billing policy, until this year, was to send the patient a bill for the difference.

Adler et al. (2023) reported that more than a quarter of emergency ground transports for commercially insured patients carried a potential surprise bill. They also found that ambulances run by public agencies generally had lower allowed amounts, lower patient cost sharing and fewer surprise bills than privately owned services, with the highest prices among services owned by private equity firms or publicly traded companies. Our service is nonprofit rather than public, and our own figures fall between those patterns. Last year, 1,140 commercially insured transports were out of network, and 610 of them produced a balance bill to the patient averaging $390. We collected about 35% of the amount billed, after considerable staff time, several complaints to the county commission and two stories in the local newspaper. The billing office estimates that two staff members spend about a third of their time on these accounts, calling patients, arranging payment plans and answering disputes.

Operational Effects

The gap affects three parts of our operation. Revenue: balance billing brings in money, about $83,000 last year, but at a high collection cost and with bad debt. Contracting: because we can bill patients when a plan pays little, insurers have less reason to bring us into their networks, and we have less pressure to accept their rates, which keeps the out-of-network share high. Reputation and the county contract: complaints about ambulance bills reach elected officials, and the county can weigh them when our contract comes up for renewal in two years.

There is also an effect on patients that our numbers do not show. People who have received an ambulance bill may hesitate to call 911 the next time, and our crews hear patients refuse transport because of cost. We do not track those refusals by reason, so we cannot measure the harm, but it is a real risk for a service whose purpose is to reach people quickly.

State Law and the Federal Committee

Several states have passed their own laws limiting ground ambulance balance billing, often by setting a payment standard for insurers and prohibiting bills to patients beyond in-network cost sharing. Our state has considered such a bill twice without passing it. State laws also cannot reach self-funded employer plans regulated under federal law, which cover a large share of workers in our county. The federal advisory committee created by the No Surprises Act has studied ground ambulance billing and recommended federal protections, but as of this paper Congress has not acted on them. The administrator therefore has to decide what the service will do in the absence of a rule, knowing that a rule may arrive later.

The Case for Balance Billing, Stated Fairly

Before recommending a change, the administrator should state the other side as strongly as its supporters would. Ambulance services argue that balance billing exists because payment does not cover the cost of being ready. A federal review of ambulance providers' costs (U.S. Government Accountability Office, 2012) found that costs per transport varied widely from one provider to another and that Medicare payments left some providers with losses and others with gains, with rural and low-volume services facing particular pressure. A service that answers every call, insured or not, and keeps crews on duty through quiet nights has costs that a per-transport payment was never designed to cover. From that view, billing patients the difference is how a service stays open.

The argument has force, and it explains why several ambulance industry groups have asked that any federal protection include a payment standard for insurers rather than a simple ban on patient bills. But it also shows where the burden falls. When payment is too low, balance billing moves the shortfall from the insurer, which chose not to contract, to the patient, who had no choice at all. A fairer answer to underpayment is a negotiated rate, a county subsidy for readiness or a state payment standard, not a bill sent to someone who was unconscious in the back of the ambulance. That judgment shapes the recommendation that follows.

Recommendation

I recommend that the service stop balance billing commercially insured patients for emergency transports, beginning next quarter, and bill them only their plan's in-network cost sharing. The lost revenue, about $83,000 a year before collection costs, is roughly 0.7% of our budget. To replace part of it, the service should pursue network contracts with the three remaining commercial plans, using the end of balance billing as a reason for plans to negotiate rather than a concession given away. Patients without insurance would continue to receive our existing financial assistance policy.

The change should be announced to the county commission, which reduces the risk to our contract, and measured over a year: the share of commercial transports in network, net commercial revenue per transport, collection costs and complaints. If revenue falls more than expected, the board can revisit the policy, but the service would do so knowing its full cost. When federal or state law catches up, the service will already comply.

References

Adler, L., Ly, B., Duffy, E., Hannick, K., Hall, M., & Trish, E. (2023). Ground ambulance billing and prices differ by ownership structure. Health Affairs, 42(2), 227-236. https://doi.org/10.1377/hlthaff.2022.00738

Chhabra, K. R., McGuire, K., Sheetz, K. H., Scott, J. W., Nuliyalu, U., & Ryan, A. M. (2020). Most patients undergoing ground and air ambulance transportation receive sizable out-of-network bills. Health Affairs, 39(5), 777-782. https://doi.org/10.1377/hlthaff.2019.01484

U.S. Government Accountability Office. (2012). Ambulance providers: Costs and expected Medicare margins varied widely; transports of beneficiaries have increased (GAO-13-6).