Air ambulance reimbursement bill hears broad testimony on rural access and budget trade-offs

Senate Bill 778 received a public hearing before the Senate Committee on Health Care, with testimony from rural legislators, air ambulance operators and a lobbying group opposed to anchoring reimbursement rates in statute.

The measure would require the Oregon Health Authority (OHA) and coordinated care organizations (CCOs) to use a specified methodology — the National Ambulance Inflation Factor — to set reimbursement rates for air ambulance services and to recalculate those rates every two years. Committee staff noted the current status quo: "emergency or ambulance services are reimbursed for Oregon Health Plan members at 80% of the Medicare rate, at present."

Supporters from rural districts and air ambulance providers said the change is necessary to sustain services that are often the only available emergency transport in remote areas. Senator David Brock Smith said the bill is "critically important to make sure that we can continue these viable services, for our residents, for these air ambulance services." Adam Osborne, chief financial officer at Life Flight Network, described the National Ambulance Inflation Factor and said the factor "enables reimbursement to keep pace with inflationary pressure" and that Life Flight Network transports more than 5,000 Oregonians annually by air.

Sheila Clow, chief executive officer of Mercy Flights, said Medicaid traditionally reimburses providers below cost and that an adjustment factor "will at least help us prevent the problem from getting even bigger by keeping the Medicaid rates, at least at pace with the inflation." Clow also explained the current statewide approach to fee-setting: "the state has contracted on behalf of this all of the CCOs, and we have a fee schedule that is covered by all of the CCOs so that it is 1 standard rate. It is at 80% of the Medicare rate," she said.

Opponents urged caution. Henry O'Keefe, vice president of health care policy for the Pac West Lobby Group, said anchoring rates in statute could interfere with cost-control mechanisms, including the state's cost growth cap, and suggested the measure could limit options for value-based contracting between CCOs and providers.

Committee members asked technical questions about how providers are paid and whether CCOs have contracts with air ambulance companies. Testimony indicated providers submit bills after transport, and commercial and governmental payers currently apply fee schedules or negotiated contracts; Life Flight Network said approximately 70% of its patients are government-insured. No committee action or vote on the bill was recorded at the hearing; the committee closed the public hearing after testimony and discussion.