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Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules
requirements.44 There are concerns agents or brokers could encourage consumers to enroll in short-term, limited-duration insurance coverage due to their high commission rates.45 In addition, there are concerns that there may be deceptive practices surrounding the sale of short-term, limited duration insurance.46 As described in section III.B of the preamble of this proposed rule, agents and brokers enter into appointment arrangements with health insurance issuers. These arrangements govern compensation provided to agents and brokers for assisting consumers with enrollment in an issuers policies.
The specific compensation arrangement between an issuer and the agent or broker is typically laid out in the commission schedule. Compensation arrangements may also include other types of compensation, such as fees and bonuses. Section 2746 of the PHS Act requires both direct and indirect compensation to be disclosed and taken into account for all requirements herein.
b. Surprise Medical Bills for Air Ambulance Services The issue of surprise medical bills for air ambulance services has drawn increasing attention from the public as the amounts charged by providers of air ambulance services have risen drastically in recent years and because utilization of air ambulance services frequently results in surprise bills. A
study by the GAO analyzed private health insurance claims from 2012 and 2017 to describe the extent to which air ambulance transports are out-ofnetwork.47 That study analyzed claims data from approximately 24,100 air ambulance transports in 2012 and another 33,800 transports in 2017 from all 50 states and the District of 44 See U.S. House of Representatives Committee on Energy and Commerce report Shortchanged:
How the Trump Administrations Expansion of Junk Short-Term Health Insurance Plans is Putting Americans at Risk. Page 43 stating the average commission rate for short-term, limited-duration insurance plans was 23 percent while the average commission rate for ACA-compliant plans was approximately 2 percent in 2018.
45 Id. At 38 stating issuers offering short-term, limited-duration insurance coverage have business practices that incentivize agents and brokers to engage in fraudulent or misleading practices.
46 See Health Care Sabotage Online: A Warning to Consumers, October 2019 https
www.casey.senate.gov/imo/media/doc/
Senator%20Casey%20-%20Health%20Care%20
Sabotage%20Online%20FINAL.pdf.
47 GAO 2019 Report to Congressional Committees. Air Ambulance. Available Data Show Privately-Insured Patients Are at Financial Risk GAO19292 available at: https www.gao.gov/
assets/700/697684.pdf. The data analyzed included claims from over 50 payors in each year including both fullyand self-insured plans and accounted for 110.1 million covered lives in 2012 and 145.0
million covered lives in 2017.

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Columbia. The study found that in 2012, 75 percent of transports were out-ofnetwork and in 2017, 69 percent were out-of-network. The GAO also reported that the median price charged by providers of air ambulance services had increased from a rate of $22,100 for rotary-wing and $24,900 for fixed-wing in 2012 to approximately $36,400 for rotary-wing and $40,600 for a fixedwing transport in 2017. The prices charged in 2017 were an increase of over 60 percent from 2012. A previously published report by the GAO also noted that between 2010 and 2014, the median prices charged by providers of air ambulance services for rotary-wing transports approximately doubled.48
Another study found that for one of the largest providers with a market share of approximately 24 percent the average charge increased from $17,262.23 in 2009 to approximately $50,199.24 by 2016.49
As the costs associated with air ambulance transports have continued to increase, the GAO reported that providers of air ambulance services report entering into more network contracts.50 However, additional analyses found that many providers of air ambulance services, particularly those not affiliated with a hospital, do not participate in issuer networks and have little incentive to do so, further noting that network participation remains low and provider avoidance of insurance network participation combined with aggressive collection practices has been described as a business strategy of some providers of air ambulance services.51
A study using 2014 through 2017 data from three large issuers to evaluate the share of air ambulance claims that are out-of-network and the prevalence and magnitude of potential surprise balance 48 GAO 2017 Report to the Committee on Transportation and Infrastructure, House of Representatives. Air Ambulance. Data Collection and Transparency Needed to Enhance DOT
Oversight. GAO17637 available at: https
www.gao.gov/assets/gao-17-637.pdf.
49 Consumer Union. Up in the Air: Inadequate Regulation for Emergency Air Ambulance Transportation. Health Policy Report, March 2017.
50 GAO 2019 Report to Congressional Committees. Air Ambulance. Available Data Show Privately-Insured Patients Are at Financial Risk GAO19292 available at: https www.gao.gov/
assets/700/697684.pdf.
51 Missouri Department of Insurance, Financial Institutions & Professional Registration. Policy Brief: Health Coverage for Air Ambulance Transportation. January 2019; and New Mexico Office of the Superintendent of Insurance. Air Ambulance Memorial Study Report. January 2017.
Available at: https www.nmlegis.gov/handouts/
ERDT%20083117%20Item%208%20NM
%20Superintendent%20of%20Insurance%20Air %20Ambulance%20Memorial%20Study %20Report.pdf.

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bills found that 77 percent of transports were out-of-network, and approximately 40 percent of transports resulted in potential balance bills. The bills averaged approximately $19,851 in addition to the standard out-of-network cost sharing, which averaged $561. The study also found that for out-of-network rotary-wing claims, issuers paid the providers full billed charges approximately 48 percent of the time, for an average of $35,733 and that for innetwork providers, billed charges were paid in full only 7 percent of the time.
The study noted that self-insured plans paid out-of-network claims in full 50
percent of the time, whereas fullyinsured plans paid claims in full 38
percent of the time,52 indicating that individuals enrolled in self-insured plans were less likely to receive balance bills than individuals enrolled in fullyinsured plans.
As states, the Federal Government, oversight agencies, and advocacy groups have examined the issue of air ambulance services and balance billing, it has become clear that there is a lack of comprehensive, national data on air ambulance costs, transports, and contractual arrangements between providers of air ambulance services and group health plans and health insurance issuers. Two GAO reports 2017 and 2019 and the FAA Reauthorization Act of 2018 indicate that it is necessary to collect data to better inform policymakers and consumers about the air ambulance services market. For example, increased transparency regarding the costs to provide air ambulance services and billed and paid amounts for air ambulance services would be beneficial in assessing obstacles to network inclusion and contract negotiations involving providers of air ambulance services.
Transparency regarding the number and location of air ambulance bases would enable assessment of the availability of services and competition in the air ambulance marketplace. Finally, a publicly-available report regarding air ambulance services would help to improve policymakers and consumers understanding of the air ambulance industry.
c. Enforcement Section 2723 of the PHS Act provides that states are the primary enforcers of the requirements applicable to issuers that issue, sell, renew, or offer health insurance coverage in the state in the 52 Brown, E.C.F. et al., Out-of-Network Air Ambulance Bills: Prevalence, Magnitude, and Policy Solutions. The Milbank Quarterly, Vol. 98, No. 3, 2020 pp. 747774.

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