I have a weird claim on my desk right now involving an Air Ambulance (AA) carrier that is billing a client $750K for a flight from the east coast to the west coast.

It is not uncommon for an AA carrier to argue that their charges are reasonable and even show us some so-called usual, customary, reasonable (UCR) charge data to justify their charges.  We find ourselves commonly reminding them that their calculation of UCR is not relevant to the Plan’s payment – but rather the reimbursement will be based on the terms of the Plan Document.  We also counter with data of our own (because we want do want to be fair), and we end up settling at a rate that everyone can live with.  

…usually

In the case I mentioned above, the AA carrier is sticking to their UCR plastic guns, and they are presenting a 10% discount proudly, as if the employer should be thankful.  To be clear, the AA carrier has a UCR database that is showing their charges are “normal.” $750K! UC-R you kidding me?  

If it were up to me, we would send them a check and tell them where to stick their 10% discount, but our client, as is common, would like an agreement on the claim to protect the member from harassment.  This is a classic ransom scenario; the balance-billing and credit-ruining boogieman is meant to scare the employer into paying more than a reasonable amount for this flight.  Regardless, our directives are to use our legal and claim data expertise to “persuade” the AA carrier to accept a lower reasonable price.  

In this case, to do this, we secured two quotes from other competitive AA carriers for the same flight (distance, resources, etc.) and the quotes came in at $35K and $50K.  Yes, you read that right – basically $700K less than these billed charges.  For good measure, we also consulted another UCR publisher, which quoted UCR at $47K – right in line with the quotes received.  Now, we understand that pre-service quotes are less than post-service charges, but certainly this is enough data to get them “in range.”  

…uh…no

We presented these market-based quotes and other UCR data to the AA carrier as a benchmark of “fair market value.” They scoffed, refusing to budge, and they are now saying they want to take this to court because of their “ironclad” UCR data.  

Here’s the best part.  We managed to secure a quote from the very same AA carrier that billed $750K (everything is the same).  The SAME carrier. The SAME flight.  They offered in writing, $35K (insert nausea).  

Believe it or not, we are still trying to get this matter resolved. Moral of the story? Don’t let anyone else (despite their best intentions) exclusively define and calculate UCR for you, because they may get it wrong, as this case clearly shows.  Instead, make sure your plan documents have a comprehensive definition that is fair to the provider, the member, and the Plan based on objective, real-world, fair market measures. At best, an unreasonable UCR calculation shocks the conscience; at worst, it can obliterate your wallet.